Hertz Energy Inc. (“Hertz” or the “Company”) (CSE: HZ; OTCQB: HZLIF; FSE: QE2) is pleased to provide an update on the Company’s critical minerals projects, including antimony, lithium, and uranium and announces proposed financing.

ANTIMONY

The Company is focused on exploring its two antimony projects aggressively with use of Quebec Critical Minerals Flow thru funds at the Harriman Antimony Project in Quebec and Canadian Flow thru funds at its Lake George Antimony Project in New Brunswick.

LAKE GEORGE ANTIMONY PROJECT: NEW BRUNSWICK, CANADA

The Property is located in the southwestern part of the Province, approximately 30 km southwest of the city of Fredericton.

The Property is comprised of 93 mineral claims within two claim blocks recently staked by the Company for a total area of approximately 2,104.5 hectares. The Property surrounds the past-producing Lake George Antimony Mine (‘Lake George Mine‘) and is considered an exploration-stage Antimony-Gold (Sb-Au) prospect located immediately along strike to the southwest and northeast, as well as downdip to the north of the historical Lake George Mine. The Property benefits from excellent road access, hydroelectric power, and nearby available personnel for field and exploration activities.

The Lake George Mine was formerly the largest antimony producer in North America with a long history of production spanning from 1876 to 1996. The mine closed in 1996 due to falling antimony prices. From 1972 to 1981, 34,417 tonnes of concentrate grading 65% to 66% Sb was produced from the first deposit. Then from 1985 to 1990, approximately 1 Mt grading 4% Sb was extracted from a second deposit (Caron, 1996). The mine also contained molybdenum (Mo), tungsten (W), and Au mineralization. Infrastructure on the Lake George Mine includes 3 shafts, underground development on 10 levels, some remaining surface buildings, and a tailings pond. The deepest level of the mine is approximately 400 m below the surface. The Lake George Sb-Au Mine currently represents one of the Top 3 antimony occurrences in the Province of New Brunswick. More info can be found at: https://hertz-energy.com/lake-george-project/

HARRIMAN ANTIMONY PROJECT:QUEBEC, CANADA

The Harriman Property is an exploration stage antimony project located approximately 17 km northeast of the town of New Richmond in the Gaspé Region of Québec (Figures 1, 2). The Gaspé Region is known for a variety of significant mineral deposits, most notably the Mine Gaspé Copper Mine, currently being developed by Osisko Metals. The Harriman Property benefits from good road access, hydroelectric power, port access, and nearby available manpower.

The Harriman Property is strategically located at the intersection of the major ENE trending Restigouche Fault and Grand Pabos Fault with a second order northeast-trending fault hosting numerous antimony and gold showings (Figure 3).

The Property was developed by compiling and reviewing historical antimony (Sb) and gold (Au) showings from the Québec government geoscientific database known as SIGÉOM. The Property area was defined by a series of four antimony showings, all hosted along a northeast-trending fault structure (Figure 4). Historical results from the nearby showings along the northeast-trending fault include 2.32% Sb, 3.36 g/t Au (Harriman-2), 43.75 Sb, 3.4 g/t Au (New Richmond), 4.8% Sb, 7.89 g/t Au and 15.35% Sb (Harriman-4 Sud) (source: SIGÉOM).

The Harriman Property of Hertz includes the Harriman-4 Sud showing returning 15.35% Sb and 0.07 g/t Au from a historical grab sample of a massive stibnite vein in altered sediments. The nearby Harriman Gold occurrence, located 300 m to the northwest, returned an assay of 22.4 g/t Au from a grab sample. These showings and much of the property have had limited previous exploration and has not had any historical drilling.

Hertz Energy has completed a program of geological mapping and prospecting. The crew’s focus was in the area of favourable geology, particularly surrounding the historical showings as well as stream sediment and prospecting for new antimony and gold showings. Results are expected in the coming weeks. More info can be found at: https://hertz-energy.com/harriman-antimony-project/

LITHIUM PROJECTS

AGASTYA LITHIUM PROJECT:QUEBEC, CANADA

The Agastya Lithium Property is comprised of 209 mineral claims covering approximately 10,650 hectares located in the Province of Québec and consists of three non-contiguous claim blocks along the greenstone belt that hosts the Adina, Trieste, and Galinée properties. These adjacent properties are known for their significant LCT (Lithium-Cesium-Tantalum) pegmatite potential hosted within greenstone/ metasediment packages:

• Loyal Lithium – Trieste Lithium Project: Discovery of six spodumene-bearing pegmatites including a significant drilling result of 31.8 m at 2.2% LiO.
• 50% Azimut Exploration / 50% SOQUEM JV – Galinée Lithium Property:Drilling results include 1.62% LiO over 158.0 m including 3.33% LiO over 29.6 m, and Galinée features a 20 km long lithium-cesium anomaly.
• Rio Tinto/Midland Galinée Project: Spodumene-bearing pegmatite dykes discovered over several hundred metres along a 7 km favourable contact zone. Significant drilling results include 1.38% LiO over 37.86 m including 1.88% LiO over 21.35 m.

The Agastya Property covers the western extent of the greenstone belt that trends through Trieste, Adina, and Galinée. Greenstone belts are known to host LCT pegmatite mineralization and are commonly targeted by exploration companies as they are favourable hosts for lithium and other valuable metals including gold. Recent discoveries surrounding the Agastya Project have been announced by Azimut Exploration and Soquem at their Galine Project: I am running a few minutes late; my previous meeting is running over.

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AC/DC LITHIUM PROJECT: QUEBEC, CANADA

The AC/DC property encompasses amphibolized mafic volcanics (greenstone) of the Rouget and Corvette Formations and plutons of the Vieux Comptoir Intrusive suite, similar to the geological setting that hosts both the Cancet and Corvette lithium projects. Both Cancet and Corvette are hosted by amphibolite rocks of Guyer Group, which is similar in age to the Rouget formation (Mesoarchean).

The northwest-trending mafic volcanics of Rouget and Corvette Formations and associated Vieux Comptoir suites continue northwest to the adjacent Rio Tino/Exploration Azimut Inc. and Rio Tinto/Exploration Midland Inc. project areas.

These are advanced rocks, typically characterized by a pegmatitic texture, a granitic composition and contain several minerals such as biotite, muscovite, tourmaline, garnet, beryl and spodumene. These rocks are also known to host K-feldspar granite phases in pegmatite form which may host an abundance of spodumene.

Based on the results of the remote sensing data analysis and processing twelve (12) anomalous target areas have been identified across the two properties.

• 5 primary and numerous smaller secondary targets are identified at the AC/DC property.
• 7 primary and numerous smaller secondary targets are identified at the La Fleur property.

Strike lengths of the individual target trends range in length from 1 to 15km in length and are between 100m to 1,000m in width and are generally oriented in a northeasterly trending direction.

Each of the anomalous trends contain numerous dyke-like structures identified from high resolution orthophotography. Individual dyke-like structures range in length between 20 –500m or greater, often occur in clusters and are generally noted to occur in conformant orientation to the target trends.

Hertz is aggressively advancing exploration at the AC/DC Project and will provide updates upon receipt of exploration results.

MAP OF AC/DC LITHIUM PROJECT AND RIO TINTO ADJOING KAANAAYAA PROJECT

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SNAKE LITHIUM PROJECT:

Hertz Energy reports that the Company will not be proceeding further with the Snake Lithium Project and has terminated its Option Agreement on the Snake Lithium Property.

NAMIBIA URANIUM PROJECT

Hertz Energy has submitted applications for two uranium Exclusive Prospecting Licenses (EPLs) in Namibia.

Namibia is a country of diverse geology and has one of the richest uranium mineral reserves in the world. There are currently two large operating mines, the Husab and Rossing mines, in the Erongo Region and five major exploration projects planned to advance to production in the next few years as the country embraces the green energy transition. Uranium mining in Namibia is of considerable importance to the national economy1. In 2023, Namibia produced the 3rd largest quantity of uranium worldwide at 6,382 tonnes, ranked only behind Kazakhstan and Australia2.

Hertz Energy Namibia Uranium Project

The application areas cover an area of 9,627.84 hectares located in Central Namibia in the Erongo Region which hosts numerous primary and secondary uranium deposits. Primary economic uranium is hosted mainly in sheeted D-type alaskites which occur both as cross-cutting dykes and as bedding and/or foliation-parallel sills. The sheets can amalgamate to form larger granite plutons or granite stockworks made up of closely spaced dykes and sills. The mineralized alaskites tend to occur at marked stratigraphic levels, often associated with the Khan-Rössing Formation boundary, or, where the Rössing Formation is missing, the Khan-Chuos/Arandis Formation boundary. Secondary uranium deposits occur in calcretes in the coastal plain of the Namib Desert. The deposits are associated with ancient river systems that flowed westward from the Great Escarpment during the upper Cretaceous and lower Cenozoic periods. Uranium mineralization is typically located in calcretised fluvial channels which tend to be buried with little or no obvious surface expression to identify them.

Licence Application EPL-10186

EPL-10186 is located 40 km northeast of the coastal town of Swakopmund. Most of the licence is covered by recent sand, gravel, scree and calcrete, with a few outcrops of mica schist, calc-silicate rock, marble and red granite. There are two prominent sub-surface water conduits/streams which in general, are believed to be geographically similar to where paleo-channels carrying uranium-rich waters would have flowed. Preliminary interpretation of regional airborne radiometric data from the Namibian Ministry of Mines and Energy indicates a strong and consistent radiometric anomaly trending northeast-southwest and coincident with the subsurface streams. The Company is targeting secondary uranium mineralization with potential for primary mineralization to the east of the application area. This is the similar style of mineralization found at ORANO’s Trekkopje Mine 6 kilometres north of EPL-10186 and Elevate Uranium’s Marenica deposit 40km to the north with a resource of 46Mlb U308 at a 93ppm U3O8 cutoff grade.

Licence Application EPL-10185

EPL-10185 is located 22 km east of the coastal town of Swakopmund. Its geology is comprised of units from the Kuiseb, Karibib, Arandis, Chuos and Khan Formations intruded by granodiorites and uranium prospective granites. Most of the western and central parts of the licence is under recent surficial cover made up of sand, gravel, scree, and calcrete. Preliminary interpretation of regional airborne radiometric data from the Namibian Ministry of Mines and Energy indicates radiometric anomalies coinciding with favourable geology for primary alaskite-hosted uranium mineralization. This is the similar style of mineralization found at Bannerman Energy’s Etango deposit located 15 km southeast of EPL-10185 as well as that at the Rossing Mine located 30km to the northeast. The Rossing Mine is one of the largest and longest operating uranium open cast mines in the world producing now for 46 years. In 2022, Rossing produced 2,659t U3O8 and currently has a feasibility study underway to extend the mine life beyond 20265.

Namibia has recently completed its political elections and On 3 December 2024, Netumbo Nandi-Ndaitwah of the ruling SWAPO party was declared the winner of the election. She is set to become Namibia’s first female president. The National Assembly elections saw SWAPO reduced to 51 seats, a bare majority of three. It was SWAPO’s weakest showing since Namibia’s independence in 1990. Incumbent president Nangolo Mbumba had not contested this election. Hertz Energy congratulates President Netumbi Nandi-Ndaithwah.

Hertz Energy EPL-10185 and EPL-10186 have been assessed by the Ministry of Mines and Energy are expected to be issued in Q1 of 2025.

Cautionary Statement: This news release contains scientific and technical information with respect to adjacent properties to the Company’s properties, which the Company has no interest in or rights to explore. Readers are cautioned that information regarding the geology, mineralization, and mineral resources on adjacent properties is not necessarily indicative of the mineralization potential on the Company’s properties.

Qualified Person Statement

All scientific and technical information contained in this news release was reviewed and approved by Paul Teniere, P.Geo., Technical Advisor of Hertz Energy, who is a ‘Qualified Person’ as defined in NI 43-101.

HERTZ ENERGY FINANCING

Hertz Energy is pleased to announce a non-brokered private placement offering of up to 5,000,000 units (the “Units”) at a price of C$0.25 per Unit for gross proceeds of up to $1,250,000 (the “Offering”). Each Unit will consist of one common share in the capital of the Company (a “Common Share”) and one Common Share purchase warrant (a “Warrant”). Each Warrant will entitle the holder thereof to acquire one Common Share at an exercise price of C$0.45 per Common Share for a period of two years from the closing date of the Offering. The Warrants will be subject to an accelerated expiry, whereas anytime after four (4) months following the issue date of the Units that the closing price of the common shares of the Company on the Canadian Securities Exchange (the “CSE”) is equal to or above a price of C$0.55 for fourteen (14) consecutive trading days, the Company may file a notice to accelerate the expiry date of the Warrants to the date that is thirty (30) business days following the date of such notice. This placement is expected to close end of January 2025.

Hertz Energy also announces non-brokered private placement of up to 4,000,000 Quebec and Canadian National flow-through units of the Company (the “FT Units”) at a price of C$0.30 per FT Unit for gross proceeds of up to C$1.200,000 (the “Offering”). Red Cloud Securities Inc. (“Red Cloud”) will be acting as a finder for LaFleur Minerals on a “best efforts” basis under the Offering.

Each FT Unit will consist of one common share of the Company to be issued as a “flow-through share” (each, a “FT Share”) within the meaning of the Income Tax Act (Canada) (the “Income Tax Act”) and the Taxation Act (Québec) (the “Québec Tax Act”) and one common share purchase warrant (each, a “Warrant”). Each Warrant will entitle the holder thereof to purchase one common share of the Company (each, a “Warrant Share”) at a price of C$0.45 at any time on or before that date which is 24 months after the issue date of the FT Unit. The Warrants will be subject to an accelerated expiry, whereas anytime after four (4) months following the issue date of the FT Unit that the closing price of the common shares of the Company on the Canadian Securities Exchange (the “CSE”) is equal to or above a price of C$0.55 for fourteen (14) consecutive trading days, the Company may file a notice to accelerate the expiry date of the Warrants to the date that is thirty (30) business days following the date of such notice.

About the Company

Hertz Energy (CSE:HZ; OTCQB:HZLIF; FSE:QE2) is a British Columbia-based junior exploration company primarily engaged in the acquisition and exploration of energy and critical minerals properties. The Company’s lithium exploration projects include the AC/DC Lithium Project, and newly acquired Agastya Lithium Property in James Bay, Quebec. Hertz Energy also holds the Harriman Antimony Project in Québec and the Lake George Antimony Project in New Brunswick, Canada. Hertz Energy also has permit applications pending in Namibia for uranium exploration projects.

For further information, please contact Mr. Kal Malhi or view the Company’s filings at www.sedarplus.ca.

On Behalf of the Board of Directors

Neither the Canadian Securities Exchange nor its Regulation Services Provider accepts responsibility for the adequacy or accuracy of this news release.

Cautionary Statement Regarding “Forward-Looking” Information

This news release includes certain statements that may be deemed “forward-looking statements”. All statements in this new release, other than statements of historical facts, that address events or developments that the Company expects to occur, are forward-looking statements. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in the forward-looking statements. Factors that could cause the actual results to differ materially from those in forward-looking statements include market prices, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. Forward-looking statements are based on the beliefs, estimates and opinions of the Company’s management on the date the statements are made. Except as required by applicable securities laws, the Company undertakes no obligation to update these forward-looking statements in the event that management’s beliefs, estimates or opinions, or other factors, should change.

Source

Strategies for the Santa Claus rally

Now that the Santa Claus rally seems to be underway, investors interested in joining in have a variety of options, including domestic markets, international diversification or targeted sector plays such as mega-cap tech stocks.

As always, consulting with a financial advisor and conducting thorough research remains essential. While the Santa Claus rally offers potential rewards, market conditions can shift quickly, making flexibility and prudence key to success.

What trends impacted natural gas in 2024?

Although prices were able to register a late year rally, prices remained under pressure for the majority of 2024. Natural gas prices fell to a year-to-date low of US$1.51 in February, shortly after the Biden administration enacted a moratorium on new liquefied natural gas (LNG) projects in the country.

For Mike O’Leary, partner at Hunton Andrews Kurth, the president’s decision added further strain to the oversupplied market.

He continued: “And with the moratorium imposed by the administration this year on LNG facilities, it’s just exacerbating that, that that glut, for the time being, until at some point that hopefully the moratorium will be lifted, and we’ll see more LNG facilities under construction.”

Hope that the moratorium would be lifted was further dampened in mid-December when the Department of Energy (DoE) released a study on the environmental and economic impacts of LNG exports, assessing their effects on domestic prices, supply, and greenhouse gas emissions.

The DoE analysis highlights a triple cost increase for US consumers from rising LNG exports: higher domestic natural gas prices, increased electricity costs, and higher prices for goods due to manufacturers passing on elevated energy expenses.

‘Special scrutiny needs to be applied toward very large LNG projects. An LNG project exporting 4 billion cubic feet per day – considering its direct life cycle emissions – would yield more annual greenhouse gas emissions by itself than 141 of the world’s countries each did in 2023,” the report read.

This latest development isn’t the only trend impacting US LNG producers.

“A series of warmer-than-expected winters has led to a large supply glut,” explained Ernie Miller, CEO of Verde Clean Fuels (NASDAQ:VGAS). “Natural gas suppliers need to work off those inventories – and see prices return to more rational levels – before they could even think of increasing production.”

After soaring to a 10 year high of US$9.25 in September of 2022 prices have been trending lower, trapped below US$4.00 since early 2023.

“Natural gas is dealing with a severe oversupply problem that has kept a tight lid on prices, and the only sector within natural gas that has held up well is LNG, which is a very small part of the overall gas market,” said Miller.

What trends impacted oil in 2024?

Oil prices exhibited volatility through the year but found support by ongoing production cuts from OPEC+ and steady demand recovery in key economies. US oil production reached a record-high of 13.2 million barrels per day, reflecting resilience despite challenges such as declining rig counts.

Geopolitical tensions, including the Israel-Hamas conflict, added uncertainty to global supply chains.

Meanwhile, Chinese oil demand softened, with lower-than-expected economic performance dampening consumption growth. In contrast, Europe continued its push for renewable energy while navigating supply challenges tied to Russian sanctions.

In the US Trump’s election victory and his repeated campaign exclamations of “Drill, Baby Drill” added optimism to the sector, although as FocusEcnomics Editor and Economist Matthew Cunningham pointed out it could be easier said than done.

“Politicians’ rhetoric often divorces from reality, and in Trump’s case this is no different. He probably will succeed in boosting domestic production of oil and gas, by issuing more leases for drilling on federal land and scrapping environmental regulations. Nonetheless, he is unlikely to boost output by as much as his “drill, baby, drill” comment indicates,’ said Cunningham.

He added: “Historically, the power of US presidents to influence oil and gas production has been dwarfed by that of the market: Ultimately, the price of oil and gas will determine if American shale firms will drill. Our Consensus forecast is currently for U.S. crude production to rise by 0.7 million barrels next year, about 3 percent of 2024 output.”

This sentiment was echoed by Miller, whose company Verde Clean Fuels makes low carbon gasoline.

“While President-elect Trump is likely to remove restrictions from oil producers, it doesn’t mean those producers will necessarily be drilling more wells or increasing domestic production. With oil prices hovering around US$70 a barrel – down from US$85 in the spring – oil companies don’t want to create an oversupply scenario driving prices even lower,’ said Miller.

Regardless of Trump’s directive producers will likely remain prudent.

“The major oil companies have learned hard lessons from previous cycles, that they need to maintain discipline and a strong balance between supply and demand so they can protect their margins,” Miller added

O’Leary also thinks Trump’s campaign promises, if followed through, could add more price volatility to the market.

“Even though he said that the energy companies here in the States realize they don’t really want to open the spigots, because that’s going to drive the price down,” said O’Leary.

“If the US did that and overproduced OPEC would say, well, we need to defend our market share, so they might just go ahead and open their spigots up, and that would further drive the price down,” he said, adding that Trump’s pro-energy stance could result in more capital for the sector.

Trump’s tough tariff talk

Shortly after winning the US election the president-elect began touting 25 percent tariffs aimed at ally nations Canada and Mexico.

Over several decades trade between the three nations has become increasingly interconnected adding tariffs to all or some goods and services could weaken continental relations and result in an escalating back and forth.

In 2023, the US imported 8.51 million barrels per day (b/d) of petroleum from 86 countries.

Canada and Mexico topped the list of countries with Canada supplying 52 percent and Mexico 11 percent.

“There’s a lot of concern that if the oil and gas sector is not exempt, and he has said nothing about exempting it, that that could drive the prices up for the consumers here in the in the country and do just the opposite of what I think Trump really wants to do, which is to fight inflation,” said O’Leary.

As FocusEconomics editor and economist Cunningham pointed out we could see a repeat of the 2018 trade war if the tariffs are enacted, which would ultimately hurt the US oil and gas sector.

“During the 2018 trade war with China, Chinese buyers of oil and gas erred away from purchasing U.S. supplies of the fuel. US oil prices fell relative to European ones, and US liquified natural gas exports to China fell to zero after Beijing hiked tariffs on the fuel to 25 percent,” said Cunningham.

In October, FocusEconomics surveyed 15 economists on whether Trump would implement a 10 percent –20 percent blanket tariff on imports and two-thirds responded that he will, he added.

Geopolitical uncertainty

Looking to the year ahead our experts see geopolitics as a major trend to watch.

“As in recent years, wars in the Middle East and Eastern Europe will continue to support oil and gas prices by unsettling trade flows and raising the risk of supply disruptions. That said, it seems likely that conflicts in both regions will come closer to winding down in 2025 than at the start of 2024,” said Cunningham.

Israel has largely dismantled Hamas’ leadership, while Ukraine faces potential negotiations with Russia following recent military setbacks and Donald Trump’s re-election, given his focus on brokering a deal. These developments could exert downward pressure on oil and gas prices in the coming year, he went on to explain.

Due to these factors FocusEconomics panelists have cut their forecast for average Brent prices in 2025 by 7.6 percent.

Miller expects some volatility, but moreover resilience in the energy sector.

“The largest spikes in volatility we’ve seen are directly related to the war in the Middle East. However, interestingly, those spikes have been very short-lived, and prices settled back and have been drifting lower for months,’ he said. “I think it’s fair to say that, by and large, global energy markets have been remarkably resilient, considering there are two wars going on. That stability has worked as a bit of a tailwind for economies because oil is among the largest expenses for many industries, including air travel and trucking.”

For O’Leary, this year’s geopolitical shifts, notably the Ukraine war, have reshaped global energy dynamics. Europe, aiming to reduce reliance on Russian energy, has turned to the global market, securing LNG supplies from the U.S. and Australia. This has increased LNG demand but hasn’t significantly lifted natural gas prices, which remain low.

Meanwhile, companies pursuing greener energy strategies are reassessing due to high costs, with some shifting focus from green hydrogen, produced via electrolysis, to blue hydrogen derived from natural gas, which is more cost-effective.

Oil and natural gas trends to watch in 2025

Oil and gas market watchers should be on the lookout for more uncertainty as we enter 2025.

O’Leary is keeping an eye on the growing energy demands of data centers and AI are straining power grids, spurring interest in solutions like hydrogen, nuclear power, and co-located facilities. However, delays in permitting new energy infrastructure, such as LNG facilities and pipelines, remain a significant hurdle.

Geopolitically, he sees the Ukraine war’s resolution stabilizing oil and gas markets, though Europe is unlikely to fully trust Russia as an energy supplier again.

Miller will be watching OPEC+ decisions and actions, as they continue to influence global oil supply dynamics.

Additionally, the performance of major economies across the US, Europe, and Asia will also play a critical role in shaping demand. Seasonal weather conditions could have a significant impact, particularly if the US and Europe experience a colder or warmer-than-usual winter. Lastly, any major geopolitical developments involving oil-producing nations could cause unexpected shifts in the market.

Economist Cunningham pointed to several trends that investors should be mindful of.

“Black swan events—those that are rare and difficult to predict, like the wars in Gaza and Ukraine—are, by their unforeseen nature, some of the primary movers of volatility in oil and gas markets,” said Cunningham. “Donald Trump, who styles himself as a master dealmaker, is the main wild card. Trump likes to cloak himself in the guise of a black swan—a “madman” à la Nixon—that is hard to read and will push his interlocutors to the brink in order to force them to accept his terms.”

He warns that trade wars would send energy prices plunging, while tighter sanctions on oil-producing Iran and Venezuela—two of Trump’s bugbears—could send them higher.

The oil market faces uncertainty on both supply and demand fronts in 2025, he explained.

OPEC+ cohesion is under pressure as competition from non-member producers rises, with the group planning to increase production starting in April. On the demand side, emerging Asia is expected to drive crude consumption, though China’s economic performance remains a key variable. Additionally, the potential global economic impact of Donald Trump’s re-election looms.

Analysts predict a slight slowdown in global GDP growth in 2025, with both China and the US set to decelerate.

Overview

Metals Australia (ASX:MLS) is a mineral exploration company with a high-quality portfolio of advanced battery minerals and metals projects in Tier 1 mining jurisdictions of Western Australia and Canada. The portfolio comprises two critical minerals projects in Quebec, Canada — the Lac Carheil flake graphite project and the Corvette River lithium (and gold) project. The Australian portfolio comprises four projects: Tennant Creek (copper-gold) in the Northern Territory and Warrambie (lithium, nickel-copper, gold), Murchison (gold) and Manindi (lithium, vanadium-titanium, zinc) – all in Western Australia.

The push for net zero targets and the call from policymakers to transition to cleaner energy has intensified the focus on electric vehicles (EVs) and battery storage. The EV automakers and battery manufacturers, rely on essential materials such as graphite and metals, including lithium, nickel, copper and cobalt, to manufacture the batteries that are used in these vehicles and storage batteries generally. This has driven carmakers and battery manufacturers to partner with battery material suppliers under direct off-take agreements. Further, some automakers/battery manufacturers are buying equity stakes in miners, involving them directly in financing decisions for the development of mining projects. This is encouraging for companies such as Metals Australia as it actively advances its projects towards development.

Figure 2 – Graphite is a Critical Mineral required for the mass electrification of auto transportation.

Metals Australia is focused on progressing its flagship Lac Carheil flake graphite project in Quebec, Canada. The project is well-positioned to supply high quality graphite products, including battery-grade graphite to the North American market – including for lithium-ion and EV battery production in the future. The company announced positive sampling results across a 36-km strike length of identified graphite trends at Lac Carheil, including many values over 20% Cg and an exceptionally high-grade sample containing over 63% Cg. The company has planned a drilling program to test new high-grade zones identified from the sampling program, which will form the basis for upgrading the existing Lac Carheil Mineral Resource. An application for the drilling program is progressing with the Quebec regulator. Additionally, the company has recently commenced a Flake Graphite concentrate prefeasibility study with Lycopodium in Ontario and a downstream battery anode plant design with ANZAPLAN in Germany.

Metals Australia is also advancing its lithium, gold and silver exploration project at Corvette River, which is adjacent to Patriot Battery Metals’ world-class lithium project. Further, the company carries out aggressive exploration programs at its other projects, including Manindi, Warrambie & the Murchison in Western Australia and Tennant Creek in the Northern Territory region of Australia.

Metals Australia is well-funded to complete all its planned exploration and project studies. The cash position at the end of Q1 2024 was AU$17.86 million, which we note was higher than the company’s market capital at current share price. Metals Australia benefits from a team of professionals boasting extensive expertise in geology and mining. The appointment of experienced mining executive Paul Ferguson as the CEO is positive for the company. Since joining in January 2024, he has significantly advanced planning and preparation for the exploration, metallurgical test work programs, and design studies required to move its flagship Lac Carheil high-grade graphite project towards development. The Corvette Project has also completed exploration planning and is now fully permitted for drilling and trenching work during the northern hemisphere summer.

Company Highlights

• Metals Australia is rapidly advancing its flag ship Lac Carheil Graphite Project in Quebec, Canada. In addition, the company has a suite of high-quality exploration projects – including Lithium, Gold and Silver in Quebec, Canada and Lithium, Gold, Copper & Vanadium in Western Australia (WA) and the Northern Territory (NT).
• All projects are in Tier-1 mining jurisdictions (Canada and Australia) with world-class prospectivity and stable geo-politically.
• The company has six key exploration and development projects:

• two in Canada: the Lac Carheil high-grade flake graphite project and the Corvette River lithium and gold-silver-copper exploration project, and,
• four in Australia: Warrambie (lithium, nickel-copper, gold), Murchison (gold) and Manindi (lithium, vanadium-titanium, zinc-silver) in WA, and Tennant Creek (Warrego East copper-gold) in the NT.

• The focus is to rapidly advance its flagship Lac Carheil Graphite Project towards development. A drilling program is already contracted to substantially increase the existing JORC 2012 Mineral Resource of 13.3 Mt @ 11.5 percent graphitic carbon (Cg) and test the potential of the many other identified high-grade graphite trends.
• The 2020 Scoping Study on Lac Carheil based on the existing resource, representing only 1km of drilling out of the total 36kms of identified graphite trends, indicates a 14-year mine life with a production of 100,000 tons per annum and a pre-tax NPV @ 8 percent of US$123 million (~AUD$190 million).
• Furthermore, other projects in Canada including the Corvette River lithium and gold targets, and exploration in Australia at Manindi, Warrambie, Murchison and Warrego – are all seeing active progress.
• The company is well-funded to complete all its planned exploration and project studies. The cash position at the end of Q1 2024 was AU$17.86 million.
• Metals Australia is led by a seasoned board and management team possessing extensive mining sector experience and a proven track record of successful discoveries and project developments. With funding in place, the company is well-positioned to capitalise on growth prospects.

Figure 1 – Location of Metals Australia’s projects in the Tier 1 Mining Jurisdictions in Quebec, Canada and Australia’s Western Australia and the Northern Territory.

Key Projects

Canada

Lac Carheil Flake Graphite Project (MLS 100%)

Conceptual 3D Mining layout from February 2021 Scoping Study (Lac Carheil Project formerly named Lac Rainy Project)

The Lac Carheil Graphite Project is located in eastern Quebec, Canada, a tier 1 mining jurisdiction with access to excellent infrastructure, including hydroelectric power facilities. The project hosts an existing JORC 2012 mineral resource of 13.3 million tons (Mt) @ 11.5 percent graphitic carbon, which was announced in 2020 and a scoping study was completed and reported on in early 2021. Battery test work followed, in Germany, and this demonstrated the Lac Carheil Graphite concentrate could be shaped, purified, coated and used in battery applications with excellent results. Given the above work, the company carried out further field work, recently announcing exceptionally high-grade sampling results from 80 samples on 10 identified graphitic trends across the property. This included a sample containing 63 percent graphitic carbon, and 10 samples containing over 20% Cg. The average grade of the sampling was 11% Cg, which is comparable to the current high-grade resource. The combined strike length of the identified high-grade graphitic zones is over 36 kms. This compares to just 1 km of drilling on 1.6 kms of graphite trend that was utilised to obtain the existing resource. The potential for expanding and upgrading the existing resource remains enormous.

Figure 4 –Lac Carheil Graphite Project – Electromagnetic imagery outlining graphite trends and the resource

Additional drilling and development studies are either planned or are already underway, including a pre-feasibility study for a high grade Flake graphite concentrate product – which has commenced and a downstream purification options assessment and a scoping study for a battery anode facility in North America, which has been contracted. The company also announced it is contract ready for its planned drilling program and will fast-track the program as soon as permits are received from the Quebec regulator.

Corvette River Lithium Project (MLS 100%)

Corvette River Lithium, gold and silver Project is located in Quebec’s James Bay region Metals Australia recently announced that it is fully permitted to advance an extensive field exploration program across its holdings which include the wholly owned East Pontois, Felicie and West Pontois projects, situated within Patriot Battery Metals’ (ASX:PMT) CV Lithium Trend, as well as tenements at West and East Eade in the company’s parallel Corvette River South Trend. A field mapping and sampling program concluded last year and identified large, potentially lithium-bearing pegmatites immediately along strike from Patriot Battery Metals’ world-class lithium pegmatite discoveries. Additionally, the company has flagged significant gold and silver samples from its review of work previously completed across the field as is illustrated in the diagram below.

Figure 5 – The Corvette Projects in the James Bay region of Canada. Prospective for Lithium, Gold & Silver

Australian Projects

Warrambie Project (MLS 80%)

The Warrambie project is located in the Pilbara region of Western Australia. It is 20 kms west of the Andover Lithium discovery (Azure Minerals (ASX:AZS). Metals Australia has completed geophysical surveys across the area and is identifying targets for further field exploration and drilling.

Warrego East Project (MLS 80%)

Metals Australia acquired the tenements as part of a package purchased from Payne Gully Gold in 2022. The company’s tenements include a granted exploration license (E32725) directly along strike to the east of the Warrego copper-gold deposit, which has a production of 1.45 Million Ounces of gold at 8 grams per tonne and over 90,000 tonnes of Copper at 2%. The Warrego mine operated from the late 1950’s through until 1989. It was found under sedimentary cover. The area and this land package is under detailed review utilizing available geophysical surveys. The company aims to identify further targets hidden under shallow sediment cover.

Big Bell North Project (MLS 80%)

The Murchison tenements were also acquired as part of the Payne Gully Gold transaction. Metals Australia owns exploration licenses at the Murchison gold project, which is adjacent to the >5 million ounces (Moz) Big Bell gold deposit. The company plans to conduct detailed magnetics and gravity surveys to test for extensions and repeats of high-grade gold deposits.

Manindi Project (MLS 80%)

The Manindi project is located in the Murchison District, approximately 500 kms northeast of Perth in Western Australia. The project comprises three mining leases and has an established high-grade zinc mineral resource. The metallurgical test work has located spodumene in samples from a high-grade lithium intersection of 12m @ 1.38 percent lithium oxide, including 3m @ 2.12 percent lithium oxide. The company also made a new vanadium-titanium discovery at the Manindi project.

Management Team

Paul Ferguson – Chief Executive Officer

A Mining Engineer, Paul Ferguson has over three decades of experience in the resources and energy sectors across North America, Asia and Australia. He has extensive project development and operational experience working in Canada. He has worked in oil & gas major ExxonMobil across project stages, including feasibility, design, construction, and operation. He has worked in Executive level roles within Australia, including at GMA Garnet and held increasingly more senior roles with BHP (Iron Ore & Coking Coal) and then with Exxon Coal Minerals and Mobil Oil Australia during the early stages of his career.

Tanya Newby – CFO and Joint Company Secretary

Tanya Newby is a finance and governance professional with over 20 years experience in various corporate and commercial roles. She has a strong background in the resources sector and has provided financial advice and assistance to a number of publicly listed entities through exploration, project development through to the production stage. Tanya is a member of the Institute of Chartered Accountants, Member of the Governance Institute of Australia and a Graduate Member of the Institute of Company Directors.

Michael Muhling – Joint Company Secretary

Michael Muhling has over two decades of experience in the resources, including 15 years in senior roles with ASX-listed companies. He is a fellow of CPA Australia, The Chartered Governance Institute, and the Governance Institute of Australia.

John Dugdale – Technical Advisor

John Dugdale is a geologist with over 35 years of experience in the discovery and development of graphite, lithium, gold, nickel and copper projects. His corporate experience includes serving as a director and CEO of several junior resource companies focused on nickel-cobalt, graphite and copper-gold projects. Additionally, he has experience in funds management with Lion Selection Group.

Chris Ramsay – General Manager Geology

Chris Ramsay is a geologist and project manager with over 25 years of experience in the global mining industry. He has been involved in exploration, mine development and operations for mining projects in Australasia, Southeast Asia, and parts of Africa and North America.

Board

Michael Scivolo – Non-executive Chairman

Michael Scivolo has extensive accounting and taxation experience for corporate and non-corporate entities. He was a partner/director at a CPA firm until 2011 and has since been consulting in accounting and taxation. Scivolo is on the boards of several ASX-listed mining companies, including Sabre Resources, Golden Deeps and Tennant Minerals Ltd.

Alexander Biggs – Non-executive Director

Alexander Biggs has over 20 years of experience in the mining and engineering sector. During his career, he has been involved in various activities, including operations, consulting, finance and capital raising. He is currently the managing director of Lightning Minerals (ASX) and was previously the managing director of Critical Resources (ASX:CRR). Biggs is a member of the Australian Institute of Mining and Metallurgy and a graduate of the Western Australian School of Mines.

Rachelle Domansky – Non-executive Director

Rachelle Domansky is an ESG specialist and a consulting psychologist for businesses, governments and educational institutions in the Asia-Pacific region. In addition to Metals Australia, Rachelle holds non-executive board positions at Quebec Lithium and Access Plus WA Deaf.

Basil Conti – Non-executive Director

Basil Conti has been associated with the mining industry for over 25 years. He is a fellow of the Institute of Chartered Accountants Australia & NZ and was a partner/director of a chartered accounting firm in West Perth until 2015.