This Stock Just IPO'd - Why we Invested
We recently took a large position in WA copper/gold explorer Techgen Metals (ASX:TG1) - in fact it is one of our biggest holdings.
Here is why we took such a large position:
Lots of near terms news - We are expecting a continuous stream of catalysts to come from this company, after it just raised $6M in its IPO.
Low Enterprise Value - We like TG1’s current Enterprise Value of $4.5M on ASX listing - with a strong copper price and buoyant commodities pricing overall, we think this company is leveraged to exploration success over the coming months.
The exploration market is hot at the moment - “commodities supercycle” has been thrown around a lot in the mainstream media lately.
As we have seen with other exploration companies, share prices can rise in the lead up to drilling results on speculation. TG1 has plenty of drilling planned in the near term.
TG1 will be deploying the funds it raised on high impact exploration campaigns in the near term, with the aim to increase its valuation significantly.
The original owners of TG1’s projects are now directors and substantial shareholders in TG1.
Given their stock is escrowed for 2 years we are comfortable they are in this for a large metals discovery.
TG1 is early stage exploration, with no guarantee of success, but we do like the upside here for early stage investors like us. Remember exploration investing is speculative investing, so only invest what you can afford to lose.
TG1 has so many upcoming drilling campaigns across multiple projects we think that the market will respond well to the rapid stream of newsflow, especially if TG1 hits on something substantial.
Upcoming Price Catalysts
TG1 has a number of exploration projects in WA across three world class minerals provinces.
Based on the company’s IPO prospectus and work plan:
- Yilgarn Craton - bedrock gold targets drill ready - We expect drilling commencement news in the coming weeks.
- Ashburton Basin - host to significant copper, gold and silver grades TG1 plans to run Airborne EM and magnetic surveys coming months, and we are hoping this can deliver some solid drill targets for the company to go after.
- Paterson - world class mineral province, TG1 has some prime geophysical targets at its Paterson Projects, which it is looking to develop for drill testing in Q4 of 2021.
Following the company’s successful IPO today and with $6M in the bank, we are looking forward to TG1 delivering a number of potentially share price moving catalysts in a buoyant market for exploration (especially in copper).
We will be providing updates as each TG1 price catalyst evolves - Stay tuned for more.
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S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
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