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Future Metals (LSE:FME)

Future Metals boasts Australia’s second largest PGM deposit with significant exploration potential and recent drilling confirming the presence of what could be a large Nickel/Copper sulphide system.

15 Nov, 2022

Market Cap: £23M / 7p @ 14 Nov 2022

Last Update: 15 Nov 2022

Current Share Price

Key Highlights 

  • Targeting Australia’s first PGM Producer
  • Large 6.9Moz PdEq JORC Resource (5Moz PGM)
  • Tier 1 Project in Tier 1 Location (Australia’s second largest PGM deposit)
  • Significant PGM and Base Metals valuation uplift since acquisition
  • Significant ‘game-changing’ base metals exploration potential
  • Multiple valuation catalysts, PGM development & exploration programme
  • Nano-Cap valuation for tier 1 project/jurisdiction compared to peers

World-class mining projects in the spotlight?

yellow excavator

It’s been a tough time for junior resource stocks over the last couple of years given they are at the higher end of the risk ladder when it comes to investing.

What with the global pandemic, the war in Ukraine and the energy crisis leading to high inflation, we’ve seen a strengthening dollar and that certainly doesn’t help commodities whether that be PGM’s, base metals or fossil fuels.

How long inflationary pressures last, we don’t know, but as we start to see growth impacted there is hope these will subside. Commodities could be set for a super-cycle yet given the continued lack of investment in resource projects that was already evident before the likes of the pandemic struck. That was largely due to historically depressed commodity prices which have now started to recover but been stubbornly pegged by a strong dollar.

If inflation is indeed topping then one would expect the dollar to top too and perhaps start reversing. This will be good for commodities especially those where inventories are rapidly falling and there are not enough mining projects to plug the impending supply deficits.

This is where, as a junior resources investor, spotting companies with world-class or tier 1 projects in top jurisdictions could offer significant returns given current depressed valuations.

So let me introduce Future Metals

About Future Metals

Future Metals are an AIM and ASX listed resources company. The company acquired their flag-ship Panton project in western Australia in June 2021 and have since announced an updated JORC Mineral resource of 6.9Moz PdEq of which 5Moz consists of Palladium, Platinum and Gold.

The project is on granted mining leases and prior environmental and heritage surveys did not raise any red flags.

The company have an experienced management team lead by CEO Jardee Kininmonth, You can read more about the team on their website but a noteworthy member of the team is the renowned Jon Hronsky who is the Senior Exploration Advisor with over 35 years exploration experience where his targeting work led to the discovery of the West Musgrave nickel sulphide province in Western Australia.  This is particularly relevant given what looks like to be the uncovering of a large sulphide system at Panton, more on that in a bit…

Panton Project 

The Panton project is Australia’s second largest PGM deposit with a huge 6.9Moz PdEq JORC resource. With a suite of different metals making up the resource, the project will be suited to multiple end use cases. As per the companies presentation the resource can be visualised as follows:

The majority of PGM supply currently comes from South Africa and Russia. That supply has potential headwinds given increasing costs in Africa and sanctions on Russia. PGM projects like Panton’s in a tier 1 jurisdiction could become increasingly important.


Panton sits within a well established mining region which means it will have access to all local infrastructure and services required such as hydro-power (increasingly important to meet ESG requirements), port facilities and transportation.

Australia is of course a major mining jurisdiction which is another significant de-risking consideration and in fact the Government have recently awarded funding to Future Metals for a deep exploration drill hole at Panton that will be drilled this year!

Optionality provides, well optionality!

What’s interesting about the Panton PGM project is it offers a variety of development options that can be mapped to associated Capex requirements. For any junior mining company to actually ‘get off the ground’, financing is a key consideration.

Given Panton has high-grade zones, the project could start-up with a higher grade lower tonnage operation to reduce initial Capex. that said given the size of the project which may be of interest to a major, a lower grade bulk tonnage operation at a higher Capex could also be achievable with asset/project level investment.

A ‘middle ground’ option could also be found with a staging process expanding tonnage. Basically, the project can be modelled at various Capex end economic levels to suit the company and potential financing/partners.

A forthcoming scoping study due for release shortly will provide some numbers and colour around these options but you only need to look at the price charts for the likes of Palladium and other PGM’s over the last 5 years to see that the numbers should be compelling!

In any case, from the research I have done, this appears to be a world-class development opportunity and of strategic importance to Australia.


Now in this section I’m not going to go into the full detail of the Panton Geology, one because you would have to be an expert to understand it and two it would be too much information to include in this research note.

Instead I’ll briefly highlight the key points of interest and that support the investment case which is what we are all interested in right!

There is a superb video the company have put together where Senior Geologist Jon Hronsky provides a technical overview of the project geology and why they believe the Panton lower keel zone and additional intrusion target could host massive Ni-Cu-PGE sulphides! This is the potential game-changer part not to detract of course from the fact the Panton PGM existing resource is in itself a significant deposit.

Main Zone

The main zone is predominantly ‘reef-style’ mineralisation and hosts the current mineral resource estimate of 6.9Moz PdEq. The deposit starts at surface and contains high grade zones and as discussed before offers project optionality to commence with a higher-grade lower tonnage initial operation if desired.

Lower Zone

The lower zone unsurprisingly sits below the main zone and is the target area for Ni-Cu-PGE sulphides and the recent modelling shows analogies to other world-class deposits hosting similar sulphide mineralisation.

I’d urge you to come back and listen to this more detailed video from the companies website where Jon explains the geology and why the company believe they could be on the cusp of a major additional discovery!

Exploration Potential could be the game-changer

As you will hear in the video, the keel section sitting below the main reef is of particular interest and the subject of the current drilling campaign which has just started.

You can see the keel section and target area denoted by the bright pink colours sitting below the blue reef zone.

Hole PS053 that was drilled returned 4M @1.18% Ni, 1.05% Cu and 2,18g/t Au. The hole is very important as it shows mineralisation clearly associated with a fault zone and in fact fragments containing 3.7% Ni magmatic sulphide which is very high grade!

In summary, the company believe that Panton has all the ingredients to the support a major Ni-Cu-PGE discovery that if you couple with the existing PGM resource is indeed potentially game-changing.

Forward Plan

The company have now entered a particularly active period and are progressing a number of clear potential valuation catalysts. The company recently raised funds by way of AIM and ASX capital raises that sees them funded well into next year to deliver the current high-impact drill programme and PGM scoping study.

Scoping Study

The scoping study should be complete in the next couple of months, possibly by year end and will provide details on project development scenarios and associated economics, mine and process design.


Running in parallel to the study is the highly anticipated drill programme which is now underway. First drilling reported 3rd November (see RNS) has confirmed a sulphide system at Panton. These drill results were a significant technical break-through (somewhat missed by the market I think!).

Further targets are being drilled including a deep drill hole co-funded by the Australian government which will go deep into the keel zone below the upper reef (all eyes on this one!). Investors can also expect assays to start feeding through into the New Year.

Alongside the scoping study and exploration work, various metallurgy is being performed running into the first quarter off 2023.

PGM’s and Base Metals

As mentioned in my foot-note, historically low metals prices have over the last decade or so somewhat impacted exploration with not enough mines being built or coming on-line to fulfil demand.

This is becoming more and more evident by the rapid depletion in inventories particularly base metals and those required to support the EV revolution.

Future Metals are well placed with a diverse PGM metals mix that can feed into sectors such as automobiles, hydrogen electrolysers, fuel cells and of course battery materials and as mentioned before with further potential supply side constraints out of South Africa and Russia are well placed as an alternative supplier.

There is particular anxiety over key battery metals including copper and nickel so the uncovering of a sulphide system in these key minerals would truly be a significant event especially as nickel sulphide is the preferred feed-stock for nickel in the battery cathode.

An eye on Risk

As with any investment it’s worth noting risks:


The company will require on-going funding to support development of the Panton project, however listings on both the AIM and ASX provide easy access to capital markets equity funding. It’s worth noting however that given the sheer scale of Panton, local government support and the output of exploration drilling, its feasible that a project partner could be found.


I’m listing this as a risk as all exploration carries risk however, I personally don’t believe any exploration outcomes are priced in at the current market capitalisation and would go as far as to say that the Panton project/resource itself is not fully priced in either so I see this as a low risk to current valuation.


So before I highlight all the fluffy bits and why those invested  could be sitting on significant returns we need to be aware that small cap companies in general carry high risk and that macro-events can dramatically change the land-scape for any investment so don’t be throwing the kitchen sink in, manage your risk !

Now back to business…

So hopefully in this brief research note I’ve helped you understand a bit more about the Future Metals proposition.

Back to Future Metals…

I’m particularly excited about the Future Metals story as it offers a sort of hybrid investment thesis. The investment case is under-pinned by a large tier 1 PGM deposit that arguably sits undervalued at the current depressed company valuation.

Then we have the potential ‘game-changer’ drill programme in flight where early indications are that a sulphide system exists beneath the chromite reef that could host a large Ni-Cu-PGE sulphide system.

You can see that companies with tier 1 world-class projects in Australia, even prior to development can achieve market capitalisations of hundreds of £millions if not billions, companies such as Greatland Gold being a good example.

Many investors will also be familiar with companies like Eurasia Mining and Pensana Rare Earths that have also achieved multi-hundred £million valuations. I believe that Future Metals falls into the same category and that the market does not realise it yet.

With the scoping study to come on the existing Panton MRE and a significant exploration drill programme underway that could truly ‘change the game’, a market cap of c.£23M looks a compelling entry level when balancing risk and reward!

I hold!

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Research materials prepared based upon my own analysis and research. Accuracy cannot be guaranteed and research notes should not be taken as investment advice. Please always do your own research.


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