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Share Watch – 18 July 2021

Share Watch –  Auroch Minerals Ltd (AOU:ASX)

AOU has just announced that it has uncovered a very-high priority drill target that it intends to drill test immediately. This decision to instantly drill this new target was based on the target’s size, strength and location.

AOU recently acquired an 80% stake in a historical WA nickel mine, and it’s currently drilling to expand its nickel resource next to and below the existing nickel. It is one of the highest-grade nickel mines in Australia.

The nickel mine stopped producing back in 1987 when the nickel price dropped to below US$4,000/tonne – this is not the case now. Nickel is currently trading at around US$18,500 per tonne, almost doubling since March 2020.

The newly identified target looks very promising because:

  1. It has all the right ingredients for massive nickel sulphides.

  2. Highly conductive – typical of well-developed massive to semi-massive nickel sulphide mineralisation.

  3. 120m wide.

  4.  Shallow – only ~ 60m below surface.

  5. 1.8km south of high-grade Nepean nickel mine – close enough to be related to Nepean and far enough away to be an independent new vein/mine, if it is in fact nickel sulphide.

Also, AOU is also currently awaiting results for the recent RC programme at its Leinster Nickel Project.

What is so good about nickel and AOU:

  1. WA nickel could be highly sought after if BHP and Tesla are seeking nickel in the state.

  2. Nickel is going to play a key part in EV batteries for the coming decades.

  3. AOU is aiming to unlock a much larger nickel resource below/along strike to an old nickel mine. This has happened before in WA – Western Areas is the case study here, and shareholders were hugely rewarded.

  4. AOU continues to deliver impressive drill results, confirming thick, high grade nickel at shallow depths at its historical nickel mine.

  5. AOU has a number of options that exercise at 10c that have been converting into shares over recent months. This is good in that it brings funds into the company without having to tap the broader market, however it is worth noting that this can also soften upward momentum in the share price.

  6. End of Financial year tax loss selling pressure has been lifted.

  7. AOU is aiming to build over 100kt of nickel resources and has multiple nickel exploration projects.

Financial indicators

The VIX fear gauge up by 2.27 points since 11 July to 18.45.

The Dow Jones Industrial Average down 182.31 points or 0.52% since 11 July to 34,870.16, the STOXX 600 down 2.93 points or 0.64% to 454.74 and the Shanghai Composite index down 15.21 points or 0.43% to 3,539.30.

Gold up to 1,812.50. US 10-year Treasury Bonds down to 1.294 and oil down to 71.45. Cryptos Bitcoin down by 1,385 points or 4.10% to 32,404.

ASX 200 up 74.80 points or 1.03% since 11 July to 7,348.10. The Aussie dollar down to 73.99 US cents.

Carbon Market Spot Prices

LGC $34.75                                                                                                     STC $38.85

ESC $33.85                                                                                                     VEEC $62.35

ACCU $20.85                                                                                                  EU ETS €52.97

NZU $NZ47.80                                                                                                UK ETS GBP42.40

Sources: RenewEconomy, demandmanager,  Reuters, SMH, Market Watch, Ieta

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