Cauldron Energy (ASX:CXU) - portfolio of assets supporting the clean energy transition




Cauldron Energy Limited (ASX:CXU) CEO Jonathan Fisher discusses the company's progress with its portfolio of assets, including the Melrose nickel-copper project in WA.

Paul Sanger: We're talking today with Cauldron Energy (ASX:CXU). CXU has a market cap of around $7m. Cauldron Energy is a mineral exploration and resource development company focused on minerals supporting the clean energy transition. Cauldron is in the process of building a new portfolio of assets through a combination of M&A and exploration activity, in addition to generating value for shareholders from its legacy asset portfolio. The company's current projects include the Yanrey uranium project in WA, the recently-acquired Melrose nickel project in the West Yilgarn region of WA, the Blackwood gold project in historic Victorian gold fields and three silica projects in WA. We welcome back Cauldron CEO Jonathan Fisher.

Jonathan Fisher: Thanks, Paul.

Paul Sanger: Jono, welcome back.

Jonathan Fisher: Thank you.

Paul Sanger: So, Jono, there are basically three exciting aspects of Cauldron at the moment. Let's kick off by talking about the Melrose nickel and copper project.

Jonathan Fisher: Yeah, sure. Look, I will say to investors that, as you mentioned, Cauldron is a bit of a turnaround story. We've got a new strategy, new team, new chairman, new CEO, new exploration manager, actually, new branding. So, just a word to any investors out there, if you haven't looked at Cauldron for a while, I'd recommend that you have another look.

Look, Melrose, very exciting project. We picked this up four months ago and exercised an option maybe one month ago in the West Yilgarn region, super hot region for exploration with a lot of juniors and even majors and Chalice (ASX:CHM) doing a lot of work there. We're targeting Julimar-style mineralisation, so nickel, copper, PGEs, and are very excited with the historical information that we've inherited and how we've been able to reinterpret that and then actually, we're just starting site works imminently.

Paul Sanger: So, Jono, with the Melrose nickel-copper project, some of your neighbours have got projects where there's pegmatite, some of them lithium. Have you noticed any pegmatites on your tenement, your property?

Jonathan Fisher: Good question, Paul. Yeah. Look, one of our neighbours, Tambourah (ASX:TMB), they recently signed a lithium exploration JV with a major looking for pegmatites on their land. Like many areas of WA, yeah, we've got pegmatites, we mapped a lot of them on our land. We haven't made a big deal of the market of that yet. We are focusing on the nickel, but absolutely lithium is something that we can have a crack at in the future.

Paul Sanger: So, Johnny, with the Melrose nickel-copper project, what caught your eye with this project and what is currently happening with the project?

Jonathan Fisher: The thing that caught our eye was some really good historic data from Independence Group (ASX:IGO) that was drilled in 2007 and we started off with some aeromag data, which was a two-dimensional dataset, yet we've been able to reinterpret that and put it into 3D. And what we've found is that there is an anomaly that sits about a hundred metres below ground, and that's really important. It's important because we have shallow drill holes straight above that, down to 50m. And even at 50m, so not into the anomaly, we're hitting some really good grades of nickel. And so the expectation is that if we drill a bit deeper and get actually into that anomaly, we're hopeful that there's some pretty good nickel sulphides there.

The next stage of this is to do an EM survey, which is imminent, and by the time this comes out may well have been done, where we're looking for conductive plates in the ground. So, if we have a moderate level of aeromag combined with EM, that's highly indicative of nickel sulphides.

Paul Sanger: With regards to determining what you're looking at, how long does that EM survey take to complete?

Jonathan Fisher: Yeah. So, it's basically an airborne survey with a chopper, basically a chopper with a whacking great hula-hoop underneath it. It takes about five days of flying time. There's mob and demob at each end. And then you're just into data crunching. So, it depends how busy the data crunchers are, but we hope to get results back pretty soon. And that's the final step before we go drill.

Paul Sanger: And does the EM survey potentially just give you so much more data on what is potentially underground?

Jonathan Fisher: Look, it is the third of the three green lights that we need. We've got historic results, we've got aeromag. If we get those conductive plates, it is an extremely exciting position to be in.

Paul Sanger: Jono, let's talk about your legacy WA uranium opportunity and the key issue with regards to WA's current position in uranium development.

Jonathan Fisher: Yeah. So, many investors may know that, in 2017, WA government, for all their wisdom, changed the policy to ban uranium mining or new uranium mining in the state. They grandfathered in four projects into the regime, and unfortunately we were the fifth, so we just missed out, and that has led to a decline in the value of our uranium project.

That said, though, there's a lot of momentum now going on in Australia with regards to nuclear more broadly and also the uranium opportunity and a possibility of changing that policy. When we look at a comparable project, which is the Boss Energy project in South Australia, and Duncan [Craib] is a great MD. Boss is a fantastic representative of our industry. He's doing very well, restarting the honeymoon project.

The assets are quite similar. They're both ISL-leachable assets, which means you can do a low capex, low opex development. He's capped at $20 per pound of uranium in ground because he is in a jurisdiction where he can progress his project. We've got a similar-sized resource. We capped at 20 cents per pound.

Now, that's just really interesting for us. It shows where we can get to in a short period of time. I mean, we won't go to $20 per pound overnight, but geez, we can be $2, $5, $10 a pound overnight. There's a lot of upside in the share price on that.

Paul Sanger: And nuclear sort of globally now is seen as more accepted in the global energy transition in places particularly like… France, in particular, people recognise that it's key for that transition. Hopefully, that may influence the powers that be in WA.

Jonathan Fisher: Yeah. Look, Paul, I've got a bit of a background in European nuclear, and when I was last there, there was still this balance between low-carbon versus end-of-life considerations. And 10, 15 years ago in Europe, yeah, end-of-life things were still very much top of mind.

Now that's completely changed. Even the green parties in Europe realise that the greater devil is the carbon. And there's a global nuclear renaissance underway to deliver zero carbon base load megawatt hours. And Australia will get there. It's just a matter of time.

Paul Sanger: Jono, so this is very much a Cauldron 2.0. Are you still on the hunt for new assets to bring into the portfolio?

Jonathan Fisher: Yeah. Look, absolutely. I mean, I'm very lucky as a CEO. My chairman, new chairman Ian Mulholland is an extremely well-respected geologist, and we've hired in a new exploration manager, Angelo Socio as well, who's got a significant experience in discovery, including in lithium actually. So I've got a really, really strong technical team. And then myself and our CFO, Mike Fry, have very strong commercial acumen.

So, we've got a really good team, we are pumping through opportunities. There is a lot of opportunity being presented. A lot of it's not good, and you need to be disciplined to make sure you make those right acquisitions. But, yeah, we feel that there's still room for one more asset in the portfolio, and that'll be important as we actually look to sell off a couple of the assets from the legacy portfolio as well.

Paul Sanger: Jono, it's been an absolute pleasure having you in the studio today, and we'll be getting you back in the near future as the projects develop?

Jonathan Fisher: Absolutely. Look forward to keeping you guys in touch.

Paul Sanger: Thanks for your time.

Jonathan Fisher: Cheers.



Name Paul Sanger