I would not classify myself as an investor who is focussed on explorers; taking a punt on digging up buried treasure seems a bit crass. However, as explained in a previous straw (still on Strawman but now two years ‘stale’) a younger me had some history with this stock, so it has been on my radar since it listed. 

I wrote a couple of straws on Antipa Minerals and added it to my Strawman portfolio at 1.5cps in October 2018. Doing a bit of due diligence and taking a fake position that doesn’t punish the hip pocket (but might hurt the ego) is a valuable thing. Articulating the reasons why you think something will have a greater value in the future than it does today is an important discipline.

At the time, my rough thesis was:

• Antipa had lots of land in a province being described as under-explored ‘elephant’ country
• The Paterson province has thrown up some long-life projects (Telfer began mining in 1977)
• Antipa seemed to have first mover advantage in the region and the gorillas, including Rio Tinto and FMG, were securing large tenements of the Paterson in a rush in 2018
• Rio Tinto had enough interest in the Antipa tenements to enter into a JV for the Northern section of their holdings
• The combination of Rio JV and closeness to the depleting Telfer mine was more strategically interesting than your average explorer

In the two and a half years since taking my Strawman position, the rough thesis has to an early degree begun playing out:

• Rio Tinto announced a major exploration find (Winu) on their land adjacent to the JV
• Newcrest announced a JV with Antipa on their tenements to the South that surround Telfer
• IGO announced a JV with Antipa on their tenements to the West
• Some early exploration success at their 100% owned tenements early in 2021 has been likened to the nearby Haverion find (JV between Newcrest and Greatland Gold)

The market wasn’t ignorant to these outcomes and following some positive share prices movements earlier this year the company raised capital leaving it with a cash balance of ~$31 million and an appetite for drilling out their 100% owned tenements. Since taking my initial Strawman position the market cap of Antipa has risen from ~$35 million to more like ~$150 million (although you could arguably subtract $31 million cash from this).

As far as explorers go Antipa is not really a minnow any more. So, what is left for those punters who, unlike me, enjoy the search for buried treasure? I think the following is worth reflecting on:

• While a market cap of ~$150 million is not micro, consider it in context; the combined market cap of the three miners that are keen enough in its tenements to free-carry exploration through JV’s is ~$150 billion
• We are likely to see about $50 million in drilling either underway or occur in the coming 12 months with Rio budgeting $24.5 million for drilling in the JV ground in 2021, both Newcrest and IGO needing to spend some millions each to maintain JV status and commitments from Antipa to drill out their 100% owned tenements in the second half of 2021
• Newcrest, with the hungry Telfer mill in the South, has been maintaining a strategic ~10% interest in Antipa and Rio, with an announced Winu mill coming online in 2025 will need to ensure its investment has plenty of feed

In 2018 I put a price forecast up of ~12c without a lot of technical analysis. I’m more of a narrative investor! I updated this a year or so later with a price forecast of ~24c, still without any form of technical analysis. The narrative is all important in this one; happy to stick with ~24c and watch how the next 12 months plays out.

There was a lot of excitement generated in 2018 in the Paterson Province of WA. Tongues started to wag when Rio Tinto Exploration bought up significant amounts of land in the province in a very short period of time, then built an airstrip and a 50-man camp. In the period since Rio has announced the finding of what might be a significant gold and copper find they have named ‘Winu’.

In April 2019 Antipa Minerals (who has a JV with Rio) raised $5 million to support drilling at greenfield targets identified through aerial alectromagnetic exploration surveys at the back end of 2018. They are using the same techniques others in the area, such as Rio, have used to identify some of the major recent finds.

In the week just finished Antipa announced they have kicked off 20,000 meters of drilling planned across 26 greenfield targets and 1 target at an existing brownfield opportunity. No timeline for the drilling has been provided by the company except to say that drilling has commenced and samples will be batched and sent for assay on a periodic basis.

There’s probably not much point in talking up the potential for great outcomes here. As an investor in an exploration company you must feel comfortable that your investment will deliver a binary outcome; a successful find that will encourage further investment towards a value creating asset in the years to come…or nothing. Not only is the outcome binary, the odds are very much weighted towards the ‘nothing’ outcome.

If Antipa finds the goods in the JV area then they have one of the world’s largest miners backing them. If they find the goods outside the JV area then they will have an asset in a region that has the potential to become a major global copper producing area. That means there will likely be multiple partners to help with the massive capital investment required in converting dirt and rock into cash.

Put it all on black...

Interview with Chairman of Antipa, Stephen Power, from approximately 3 weeks ago. Take it with a grain of salt - Chairmen who talk up how many 'baggers' the share price could see in coming months should be listened to with some scepticism. 

But, my personal view is that they have a lot of good land in a region that is a bit 'hot' at the moment. They have a JV with one of the world's biggest miners, Rio Tinto, who have just announced a big find on an adjoining tenement. There is a lot of potential upside, but of course big risks with any explorer...and not a huge amount of cash in the bank.

Interview can be listened to here: https://starinvesting.com.au/podcast-antipa-minerals-asxazy-executive-chairman-stephen-power-on-upcoming-exploration-campaign/

Good to see I'm not the only wacko out there who loves a good conspiracy theory. A sleuth-hound who obviously has more time on his hands and a little more pocket money than me appears to have taken a light aircraft over Rio's new digs in the Patterson Province and has snapped some juicy aerial photo's, and sent them to the West Australian for a Saturday morning write-up!

https://thewest.com.au/business/speculation-builds-over-rio-tintos-east-pilbara-copper-find-as-first-images-emerge-ng-b881017433z

The 'nearology' factor has seen Antipa trade up ~60% over the last couple of weeks giving the company a market cap of ~$40 million. Given Rio's size I doubt that they would be under any pressure to release any price sensitive announcements in the short term but there are a couple of reasons why the heat pushing Antipa could keep going:

1) Speculation around the Rio find is starting to solidify (thanks to amateur sleuths), which should push the 'nearology' factor over the next week or two

2) In addition to the fully owned Rio Tinto land, Rio has a JV with Antipa and results from drilling across some of the JV lands should become available over the back end of 2018

3) Antipa also has it's own drilling campaign on 100% owned areas and further results on these should become available over the back end of 2018

Obviously the heat on the Antipa share price could disappear as quickly as it appeared but at a market cap of only ~$40 million, if things go well, then there could be a long way to go.

Whenever I receive a hot tip on a small cap miner my biggest reaction is usually an arched eyebrow...which does leave me with a sense or irony in putting forward an argument for taking a small position in a mining explorer with a market cap under $30 million. So, painfully putting the irony to one side...

I first came across Antipa when it listed back in early 2011 at $0.20 per share. Back in those days my right eyebrow was less inclined to arch at the first hint of a hot tip and I plowed $10k into the IPO of the then very junior explorer and recieved a FREE attached option for each two shares purchased! What a deal I thought!!

In the 6 months that followed I managed to escape at the IPO price, allowed the options to lapse instead of selling them when they were actually worth something (!!), and incurred a bit of brokerage to rub the salt into the wounded ego. In retrospect I did well!

So, very ironically (I thought I put all irony to the side!?), almost seven years later I have (re)purchased a small position and am now the one giving the hot tips and in receipt of arched eyebrows.

Antipa holds a significant amount of land in the Paterson province of WA around Newcrests' Telfer mine. Over the last decade a number of junior explorers have been looking for that big find in the region; Encounter Resources (ENR), Sipa (SRI), and of course Antipa Minerals. In the last 12 months or so things have started to get a lot more interesting. Rio Tinto has entered into a JV with Antipa and Newcrest has entered into a JV with Encounter. In addition both Rio and Fortescue have begun a bit of a land grab, taking big positions in the area. Why all the interest all of the sudden???

Finally, and here is where the rumour mill really gets flying (pun intended), in the last couple of months Rio Tinto has built an airstrip very close to Antipa's holdings....

for those who love a good conspiracy theory Barry Fitzgerald from The Australian has been doing some digging:

- https://www.livewiremarkets.com/wires/rio-airstrip-and-camp-fuel-talk-of-its-biggest-find-in-25-years-2018-10-26

- https://www.livewiremarkets.com/wires/show-us-the-growth-investors-tell-gold-miners

While I do indeed love a good conspiracy, please don't forget that more money has been wasted on junior explorers than has ever been made! My recent investment in AZY is considerably smaller than my original investment back in 2011...