Goldman Sachs say “Copper is the New Oil” - TG1 Copper Drill Target Announced

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Published 08-JUL-2021 12:00 P.M.

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3 minute read

It’s early stage, but TechGen Metals (ASX: TG1) has just detected some pretty impressive copper drill targets during some recent airborne electromagnetic surveying.

TG1 has a tiny $9.5M market cap and ~ $5M enterprise value, with $4.5M in cash as of 10th June.

We invested in TG1 at the 20c IPO in April. We have not sold any yet as we are waiting for TG1 to deliver on its planned exploration programmes across a few projects first - TG1 has many near term exploration catalysts in a currently hot commodities market.

We like TG1’s tight capital structure, and the fact that the original project vendors are actively managing exploration as Managing Director and Technical Director. Both are also substantial (and escrowed) shareholders of TG1, so are clearly aligned with all shareholders.

TG1 is funded for multiple drilling events in the coming months - so expect plenty of newsflow.

At its copper project, TG1 will now run some ground surveys with the view to pinpoint precise drill hole locations, ahead of drilling later this year.

In the meantime, the copper price is nearing record highs - so it's an excellent time to find a large copper discovery.

Is Copper the new oil? Goldman Sachs think so

Goldman Sachs are calling copper the ‘new oil’ - we aren't entirely sure about that, but a multi year bull market for copper on the back of green CAPEX spending does sound pretty good for our investment in TG1:

What’s next for TG1

  1. Refine copper drill targets: Next step is some ground EM surveys with a view to pinpoint precise drill locations.
  2. Follow up drilling on its gold project: A few weeks ago TG1 made a gold discovery - its currently planning follow up RC and diamond drilling.
  3. Drilling at its other projects: TG1 holds a portfolio of twelve exploration licences strategically located in three highly prospective geological regions of Western Australia; the Yilgarn Craton, Paterson Orogen and Ashburton Basin and intends to drill test across all of its projects.

We expect a number of drill programmes to occur in the last few months of the year - and expect the TG1 share price to climb upwards in anticipation of these drilling events.

Why are invested in TG1

Here is our original article on why we invested in TG1, in summary:

  1. Low Enterprise Value - We like TG1’s current Enterprise Value (~ $5M) - we think this company is leveraged to exploration success over the coming months.
  2. The exploration market is hot at the moment - “commodities supercycle” has been thrown around a lot in the mainstream media lately.
  3. Strong copper price, strong gold price - prices are around record highs
  4. The original owners of TG1’s projects are now directors and substantial shareholders in TG1. The original owners have a significant, escrowed holding in TG1, which means they are aligned to other long term holders. We are comfortable the TG1 board is in this for a large metals discovery.

TG1 is an early stage exploration company, with no guarantee of success, but we do like the upside here for early stage investors. 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.

tags

COPPER


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