Overview: GTI Resources Ltd (“GTR”, “the Company”) is an Australian minerals exploration company focused on uranium, vanadium, and gold exploration. GTR’s flagship assets are located in the prolific Henry Mountains region in Utah, the USA with an initial focus on the Jeffrey Project. The Henry Mountains region contains high-grade uranium & vanadium deposits having produced 17.5 Mt of ore averaging 2,400ppm U3O8 and 1.25% V2O5 (92 mlbs U3O8 and 482 mlbs V2O5) dating back from the early 1900s. GTR also owns the Niagara gold project, located in WA. Since initiating coverage in May 2020, GTR announced the acquisition of adjacent past-producing mineral leases that will more than double the size of its land position and announced a $1.8m placement and partially underwritten Share Purchase Plan to raise up to a further $970k.
Catalysts: Exploration planning for the next phase of drilling in Utah is underway targeting field activity in Q3/Q4 2020 after GTR announced compelling results from the recently completed reconnaissance exploration drill program at the Jeffrey Project. Following the acquisition of two strategically located mineral leases, GTR’s land position has more than doubled to over 5.5km with potentially significant exploration upside in untested areas. In parallel, fieldwork is planned on the Niagara gold project in WA to follow up on anomalous soil sampling results that were announced in May 2020. Major shareholders have supported the $1.8 million placement, and, with the SPP underway closing later this month, GTR plans to use the proceeds to increase the pace and scale of its work programs in both Utah and WA.
Hurdles: While initial drilling results are promising, there remain technical risks as GTR prepares for the next stage of drilling activities. Following the recent placement and upon completion of the SPP, GTR will be sufficiently funded to progress to the next stage of field exploration, however considerable further capital will be required in the long- term to establish the feasibility and economic merit of its projects. While the uranium market is currently attractive following a significant price increase this year, there is no guarantee that conditions will remain favourable as spot prices are subject to price significant volatility.
Investment View: GTR offers speculative exposure to uranium and gold market trends through a portfolio of exploration assets in Utah as well as WA. We continue to be attracted to the magnitude of GTR’s assets, in particular after the acquisition of adjacent mineral leases in Utah that will conjoin the Company’s most prospective projects at Jeffrey and Rats Nest. While early drilling results yielded promising results and untested areas provide potential exploration upside, upcoming exploration drilling activities in Utah offer numerous value drivers. The Company’s Niagara gold project has not received much attention to date and is being developed simultaneously. With the SPP underway and $1.8m placement completed – strongly supported by major shareholder Tolga Kumova – the capital raising provides sufficient funding to advance and further de-risk its projects. While key risks surrounding uranium markets and project development remain present, GTR’s management team has to date demonstrated its ability to advance the Company’s projects on time and on budget. As uranium and gold market conditions remain favourable, we resume coverage to monitor project development activities after the well-supported capital raising.
THE BULLS SAY
THE BEARS SAY
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