“Garimpeiro” columnist Barry FitzGerald has covered the resources industry for 35 years. Now he’s sharing the benefits of his experience with Stockhead readers.

Maybe it was the Steve Jobs-like way he delivered his presentation to investors. Or it could have been his under-valued argument. Then again, it could have been investor fascination with the by-product strontium potential of the project.

Whatever it was, Matt Healy’s presentation late on the first day of the Resources Rising Stars’ conference on the Gold Coast last week was time well spent by the geologist come company CEO of Venari Minerals (ASX:VMS).

Trading at 8.1c before Healy took to the stage, Venari subsequently took off. It was last trading at 15c for a gain since the conference presentation of 85% – prompting a speeding ticket from the ASX.

Without referencing the RRS conference presentation, Venari said it had nothing new to report that could explain the price spurt and that it was in compliance with listing rules. No doubt it was too.

But there is little doubt that investors in the room at the RRS conference were taken by what Healy had to say on the company’s Red Mountain lithium project in Nevada.

Big lithium resource

It is a virgin discovery by the company that now has a clay-hosted mineral resource estimate of 3.03Mt of lithium carbonate equivalent (inferred), with a compliant exploration target of 10.7-18.6Mt of LCE. 

So it is a big resource as it stands and Venari thinks it will get bigger still with more drilling.

Healy argued that the scale of the resource and its upside was not being reflected in Venari’s market cap. At its current price Venari has a market cap of $19.5 million and it is holding cash of about $7m, making for an enterprise value of $12.5m.

Compared with the market caps of the myriad of other lithium companies in Nevada whose market caps are measured in hundreds of millions of dollars, and billions, Venari’s market cap does look to be on the skinny side of things, even after its 85% share price gain.

“There’s a lot of value to be had on an investment in Venari, and the upside is fantastic,” Healy said.

“We’ve got a lot of news flow coming.

“We’ve got infill drilling happening as we speak and in the next month, we’re adding strontium and magnesium to our mineral resource estimate.

“Then for the rest of the year, we expect all the drill assays to be flowing in so we can update our mineral resource estimate in the new year. Then we’ll finish off the first quarter of next year with a scoping study,” Healy said. 

And there’s strontium

And then there is the potential for a handy by-product revenue contribution from strontium.

“If you haven’t heard of strontium, that’s okay,’” Healy said, warming up the investor crowd on the speciality metal.

“Strontium is a pyrotechnic metal.

“When it burns with a brilliant red, it finds application in defence, tracer munitions and in flares.

“The US currently imports 100% of its strontium. There are no domestic strontium mineral resources.

“But we’re looking to change that.

“So within the next month, Venari will be adding strontium to its lithium resource.

“At that point in time, the company will have the only strontium resource, not only in the US but actually in all of North America,” Healy said.

“So if you want to talk scarcity, you can’t get much scarcer than that.

“This is where it starts to get a little bit exciting.

“We’ve talked about a lithium project so far, but this project has some really fantastic byproduct upside,” Healy said.

He then showed an image of a counter rocket artillery and mortar system.

“These are positioned at US military bases all across the Middle East.

“They’re designed to take out enemy mortars and drones trying to attack these bases.

“And as you can imagine, they’ve been pretty busy as of late.

“But what I want to bring your attention to is that red light. That red light is from tracer munitions. That’s a strontium compound that’s burning to produce that trace.” 

Venari it seems is about to be plugged in to the hotter-than-hot investment thematic of the US government spending billions to build out its defence supply chain, with a clear focus on domestic supplies.

Read the original article here: https://stockhead.com.au/resources/barry-fitzgerald-investors-warm-to-venaris-hot-red-mountain-strontium-and-lithium/