Metals & Mining Research Best Undeveloped Projects 2020 www.argonaut.com Corporate Directory Institutional Sales | PERTH Corporate and Retail Sales | PERTH NAME & TITLE CONTACT INFORMATION NAME & TITLE CONTACT INFORMATION Chris Wippl +61 8 9224 6875 Glen Colgan +61 8 9224 6874 Executive Director, Head of Institutional Sales [email protected] Managing Director, Desk Manager [email protected] Damian Rooney +61 8 9224 6862 Kevin Johnson +61 8 9224 6880 Director, Institutional Research Sales [email protected] Executive Director, Corporate Stockbroking [email protected] John Santul +61 8 9224 6859 James McGlew +61 8 9224 6866 Consultant, Institutional Sales & Research [email protected] Executive Director, Corporate Stockbroking [email protected] Josh Welch +61 8 9224 6868 Geoff Barnesby-Johnson +61 8 9224 6854 Institutional Research Sales [email protected] Senior Dealer, Corporate Stockbroking [email protected] George Ogilvie +61 8 9224 6871 Phil Grant +61 8 9224 6834 Institutional Research Sales [email protected] Senior Dealer, Corporate Stockbroking [email protected] Ben Willoughby +61 8 9224 6876 Institutional Sales | HONG KONG Senior Dealer, Corporate Stockbroking [email protected] NAME & TITLE CONTACT INFORMATION David Keogh +61 8 9224 6852 Damian Rooney +852 3557 4862 Senior Dealer, Corporate Stockbroking [email protected] Director, Institutional Research Sales [email protected] Rob Healy +61 8 9224 6873 Dealer, Private Clients [email protected] Research James Massey +61 8 9224 6849 NAME & TITLE CONTACT INFORMATION Dealer, Private Clients [email protected] Ian Christie +61 8 9224 6872 Cameron Prunster +61 8 9224 6853 Director, Head of Research [email protected] Dealer, Private Clients [email protected] John Macdonald +61 8 9224 6835 Chris Hill +61 8 9224 6830 Director, Metals & Mining Research [email protected] Dealer, Private Clients [email protected] Royce Haese +61 8 9224 6869 Harrison Massey +61 8 9224 6829 Analyst, Metals & Mining Research [email protected] Dealer, Private Clients [email protected] George Ross +61 8 9224 6840 Analyst, Metals & Mining Research [email protected] Corporate Finance | PERTH NAME & TITLE CONTACT INFORMATION Board of Directors Eddie Rigg +61 8 9224 6804 NAME & TITLE CONTACT INFORMATION Chairman & Head of Corporate Finance [email protected] Eddie Rigg +61 8 9224 6804 Nick McDonough +61 8 9224 6816 Chairman [email protected] Executive Director, Debt & Corporate Finance [email protected] Matthew Selby +61 8 9224 6861 Glen Colgan +61 8 9224 6874 Executive Director, Corporate Finance [email protected] Managing Director [email protected] Peter Balsarini +61 8 9224 6826 Greg Southee +852 3557 4808 Director, Corporate Finance [email protected] Executive Director [email protected] Angus Thomson +61 9224 6824 Kevin Johnson +61 8 9224 6880 Director, Corporate Finance [email protected] Executive Director [email protected] Dianmin Chen +61 8 9224 6821 Charles Fear +61 8 9224 6888 Special Consultant, Corporate Finance [email protected] Non-Executive Director Brent Stewart +61 8 9224 6888 Corporate Finance | HONG KONG Non-Executive Director NAME & TITLE CONTACT INFORMATION Michael Price +61 8 9224 6841 Greg Southee +852 3557 4808 Company Secretary & COO [email protected] Executive Director & Head of Asia [email protected] Stanley Wu +852 3557 4807 Perth Office Hong Kong Office Director, Corporate Finance [email protected] Level 30, 77 St Georges Terrace Suite 701, Level 7, Henley Building, Perth, Western Australia, 6000 5 Queen’s Road Central, Hong Kong [email protected] [email protected] Cover Photo P +61 8 9224 6888 F +61 8 9225 5511 P +852 3557 4888 F +852 3557 4889 The cover photo is West African Resources’ Sanbrado Gold Project in Burkina Faso Table of Contents Overview ......................................................................................................................................................... 1 2020 Best Undeveloped Project List ............................................................................................................... 2 2019 Best Undeveloped Project Performance ................................................................................................ 3 Key Themes ..................................................................................................................................................... 5 Reward from the drill bit ................................................................................................................................. 5 Cashed up for discoveries ............................................................................................................................... 7 Trusting the team .......................................................................................................................................... 11 A cost is a cost ............................................................................................................................................... 12 M&A cycle continues..................................................................................................................................... 13 ASX the home of resources ........................................................................................................................... 16 Argonaut’s Commodity and FX Assumptions ................................................................................................ 18 Best Undeveloped Projects – Key picks Adriatic Metals (ADT): Vares Project – Silver linings .................................................................................... 20 Atrum Coal (ATU): Elan Premium HCC Project – Everything in Isolation ..................................................... 24 Bardoc Gold (BDC): Bardoc Gold Project – Goddess of concentration ........................................................ 28 Galena Mining (G1A): Abra Project – On the brink of construction ............................................................. 32 Myanmar Metals (MYL): Bawdwin Project – The big ones just get bigger .................................................. 36 OreCorp (ORR): Nyanzaga Projects – Leverage to Tanzania turnaround ..................................................... 40 Pantoro (PNR): Norseman Gold Project – The last great field ..................................................................... 44 VRX Silica (VRX): Arrowsmith & Muchea Projects– Built on sand ................................................................ 48 Financial Advisers | Stockbroking & Research | Special Situations Financing Special Mention Projects Bellevue Gold (BGL): Bellevue Project – Target or go it alone ..................................................................... 52 Chalice Gold Mines (CHN): Julimar Project – Palladium promise ................................................................ 54 Centaurus Metals (CTM): Jaguar Project – Sweet ride in a Jaguar ............................................................... 56 De Grey Mining (DEG): Mallina Project – A new gold paradigm for the Pilbara .......................................... 58 Mincor Resources (MCR): Kambalda Nickel Operations – Rejuvenated Kambalda Nickel .......................... 60 Musgrave Minerals (MGV): Cue Gold Project – Right on Cue ...................................................................... 62 NexGen Energy (NXE:TSX): Arrow Project – Arrow in flight ......................................................................... 64 Oklo Resources (OKU): Dandoko Project – Cracking the code ..................................................................... 66 Sovereign Metals (SVM): Kasiya Project – Rare Rutile ................................................................................. 68 Stavely Minerals (SVY): Stavely Project – Thursday has arrived .................................................................. 70 Tietto Minerals (TIE): Abujar Project – Got momentum .............................................................................. 72 Disclosures and Disclaimers .......................................................................................................................... 74 Financial Advisers | Stockbroking & Research | Special Situations Financing Metals & Mining Argonaut’s Best Undeveloped Projects (BUPs) Argonaut has completed its 2020 review of the best undeveloped projects (BUPs) in the 2020 metals and mining sector that are majority owned by ASX listed companies. Once again it was a challenge to fill our target list of 10-12 projects, due to a lack of quality, feasibility- stage projects. It is noteworthy that 2019/2020 has seen a number of major discoveries (listed in this book as Special Mentions) which will likely populate future editions of BUPS. While less than 10 projects populate our 2020 BUPs, a number of major Selection criteria: Argonaut’s ‘bottom-up’ fundamental approach is generally commodity discoveries in 2019/2020 will likely and management agnostic. However, we do apply some jurisdictional filters, removing add to future editions projects in the highest geopolitical and sovereign risk countries. As part of our selection process, we assessed >450 companies listed on the ASX with valid studies. Argonaut continues to use the following selection criteria to identify projects considered worthy of inclusion in the BUPs: Our 2019 BUPs list performed very 1. Development stage between scoping study