Two Shields update – recent developments continued to be ignored by the stock price
By Dr Michael Green
Exploration has really begun to move apace at Two Shields’ lithium permits in both Mali and Niger. The latest exploration update out yesterday provided a lot of encouraging news ref the company’s interests in SW Mali and SW Niger which are held through Two Shields’ 40% and 30% shareholding in Xantus and Nashwan.
In Mali, the third stage of the exploration across four lithium permits has now been pretty well completed. In all, some 5000 metres of auger drilling was carried out by a truck-mounted rig, drilling holes 10-15 metres deep to test for greater concentrations of Li2O below the extensively weathered surface. This drilling programme was focused on six pegmatite outcrop clusters where elevated levels of Li2O had already been identified. Basically, the field work is expected to be completed in the next seven days, that will be followed by sample preparation, transporting of the samples to the laboratory in South Africa and assaying. It is expected that the results will be available in Q3 2018.
Meanwhile in Niger, the planned work programme has begun. This includes 5,000 metres of auger geochemical drilling and geological logging focused on the high-grade targets at Diblio and Dibilo East. These targets have been already identified in the Dingoaba Permit where grades as high as 3.22% Li2O have been found. Importantly, this work programme has been designed based on information provided by a reassessment of historical data, and which revealed that the permit is highly prospective for lithium.
Both the Mali and Niger lithium exploration permits are located in close proximity to and also show a similar geology to the significant lithium discoveries made by ASX-listed Birmain’s Bougouni Lithium Project with its world class Goulamina lithium deposit and AIM-listed Kodal Minerals which has been announcing some impressive lithium grades and widths. Importantly, previous results from both Mali and Niger have been indicative of a similar potential for high grade Li2O mineralisation. In these permits, the company and its partners have contracted the work out to Sahara Mining which is basically replicating the exploration programme and refining the targets just as Birimian and Kodal Minerals have done.
Two Shields looks to us to be well placed as the geology in Mali and Niger are highly prospective and lay within a rapidly emerging global lithium province. Moving ahead, in such an important lithium play there is, in our opinion, only likely to be one player in the future as existing interests get consolidated. Two Shields, through its investment in this region, is hoping to be able to identify a continuation of the lithium mineralisation system and which could become part of a wider consolidation of interests scheme. The real compelling economics of lithium mining in this area come with fully beneficiating the product and so the ultimate project is all about scale.
Lithium is set to become ever more important in providing power for the greener world over the coming years. Lithium-ion batteries are now set to be the main choice for a host of uses, particularly in batteries for EVs, demand management, decentralised power and consumer electronics. The demand for lithium is expected to continue to increase rapidly ushering in higher prices on the back of a critical supply-demand gap. Indeed, such is the demand for lithium that commentators have suggested that battery and auto manufacturers might also start investing in lithium miners to guarantee supply.
Lithium represents just one facet of Two Shields however as the company also holds an investment in another technology metal – cobalt, through the company’s investment in Cobalt Blue Holdings (25% interest) along with an 8.95% stake in the international cyber-security company BrandShield. The last development at Cobalt Blue was the granting of the fourth exploration licence (N’Golia Est) over the 460km² which, like the other three licences, is located in a region that is highly prospective for cobalt and associated minerals. These four licences are contiguous to the Nkamouna and Mada deposits in the Haut-Nyong divisions, and where previous studies indicated a total 59.8 million tonnes grading at an average of 0.24% cobalt, 0.68% nickel and 1.37% manganese. CBH, through its subsidiary, has an application for a further exploration licence in the region which, together with the four granted licences, cover an area of some 2,837km².
Meanwhile, BrandShield has recently launched the world’s first decentralised online anti-scam platform based on blockchain technology and now seems to be making traction. BrandShield has been a global roadshow in recent months and no doubt has arrived onto the radar of the serious players in the crypto world. These are well-financed vehicles which have corporate strategies based on the long game in this fast-developing industry and the use of such a centralised system across a number of large sectors including the banking, insurance and medical arenas – industries which could really benefit from BrandShield’s decentralised online anti-scam platform based on blockchain technology.
Recent developments with the company’s interests, possible tangible future resource valuations and the rapidly improving news flow that is being created seems to be currently ignored by the share price. At the current price of 0.32p the shares remain a long way from our derived fundamental target of 1.47p per HERE. Accordingly we remain buyers.
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