Impact Minerals Focused on Making a Discovery to Unlock Shareholder Value

• Impact Minerals, led by Dr. Mike Jones, is a multi-commodity explorer in Australia with four major projects in promising exploration and mining districts.
• The company focuses on target generation and drilling, aiming to discover significant deposits rather than small-scale, long-term developments.
• Since their last public interview, the company has experienced challenges in interpretation and slow news flow due to delayed results from labs.
• They have spent $45 million since 2006 with a current market cap of 35 million and a cash position of 2.9 million. Their immediate plans include spending on drilling at Broken Hill and Dunya.
• While Impact Minerals has had setbacks, they are optimistic about upcoming projects and are open to partnerships to progress their exploration efforts.

Impact Minerals is an Australian mineral exploration company that has spent over $45 million exploring four projects targeting gold, silver, copper, nickel and platinum group metals (PGMs). The company uses a "target portfolio" strategy, ranking and prioritizing targets across its projects with the aim of making a major discovery.

After a disappointing start to 2022 at the Commonwealth Project in New South Wales Dr Mike Jones explains the company's renewed focus on its flagship Broken Hill Project and newly acquired Dunia Gold Project in Western Australia.

Disappointing Start Dampens Enthusiasm

The year began with enthusiasm and promotion around drilling copper targets at the Commonwealth Project, located next to the high-profile Boda copper discovery. However, results have been underwhelming so far.

Two primary targets were drilled based on strong geophysics, geochemistry and expert reviews. However assays indicate only low levels of copper and other metals. This suggests the targets are deeper or more complex than initially thought. While future work could enhance the prospects, Commonwealth is now a lower priority for Impact. The focus shifts back to the flagship Broken Hill Project where Impact believes it is close to a PGM discovery.

Refocusing Efforts on Flagship Broken Hill Project

The Broken Hill Project in far western New South Wales is exploring for high-grade nickel-copper-PGM sulphide mineralization. Impact has built up a large tenure position in this historic mining district, but technical challenges have hampered exploration efforts.

Last year, Impact made breakthroughs in understanding how to find PGMs at Broken Hill. For the first time, a model has been developed to explore for these metals based on geology and geochemistry. Impact believes it now knows where to target drilling down-plunge from previous drill results.

A $500,000 drill program is planned to test these targets once COVID restrictions in New South Wales ease. While risky, Impact wants to give shareholders a chance at a major discovery after years of patience and support.

Fast-Track Drilling at Dunia Gold Project

Taking advantage of available drill rigs in Western Australia, Impact has secured a rig for its newly acquired Dunia Gold Project, located close to the recent Burns copper-gold discovery.

Dunia is a walk-up drill target with minimal work required before drilling. Previous work identified gold-in-soil anomalies and mineralization in limited drilling. Impact plans to spend around $300,000 to drill test this prospect by year-end.

While early stage, Dunia offers impact a short-term opportunity to test a quality target and potentially attract a joint venture partner if results are positive.

Portfolio Strategy Maximizes Discovery Potential

Impact's target portfolio model ranks and prioritizes targets across commodities and projects. The aim is to systematically test the highest potential targets while minimizing wasted spending. Due to the risks in exploration, Impact's strategy is to drill targets itself initially. If unsuccessful, projects get downgraded and Impact moves on. This preserves cash rather than continuing to spend unsuccessfully.

But for premium targets like Broken Hill, Impact wants to give shareholders a chance at a discovery first. Joint ventures or project sales only come after drill testing. This portfolio approach maximizes Impact's exposure to potential major discoveries in quality minerals districts. With multiple projects, Impact has several opportunities for success.

Funding Pressures Require Strict Discipline

With around $2.9 million cash at the end of September, Impact faces funding pressures. The company must maintain strict discipline on spending and pivoting between projects when warranted.

If the upcoming drilling at Broken Hill and Dunia is unsuccessful, Impact will likely seek joint venture partners rather than sole fund further work. While this dilutes the upside, it is a prudent strategy given tight capital. Impact's funding situation is not uncommon for junior explorers. Shareholders must recognize the extremely high risks involved. Success depends on Impact finally achieving the major discovery it has spent over $45 million pursuing.

With a rollercoaster year behind it, Impact Minerals is now focused firmly on drilling its highest-ranked targets at Broken Hill and Dunia. After years of patience and support from shareholders, the company hopes lady luck may soon smile on these efforts.

However, shareholders should continue to expect high volatility. Outright exploration success remains elusive for Impact. Unless this changes, the company will likely require external funding or joint ventures to continue its target portfolio strategy over the long term.

Can Impact Minerals be a good investment opportunity for investors?

• Large and prospective landholdings in established mining districts - Impact has assembled significant ground positions in historic mining camps like Broken Hill. This provides exposure to mineralized systems capable of hosting major discoveries.
• Breakthrough exploration techniques for PGMs at Broken Hill - Impact believes it has developed a new geochemical model to effectively explore for high-grade PGMs at Broken Hill. If proven, this could unlock significant value.
• Nearology to recent major discoveries - Projects located next to recent significant discoveries like Boda and Julimar have increased prospectivity. Impact Minerals could benefit from similar nearby mineralization.
• high risk - With projects spanning several commodities and jurisdictions, Impact has multiple chances to achieve exploration success. This diversifies the risk profile.
• Tight capital discipline and project focus - Impact ranks its targets systematically and is prepared to walk away when warranted. This preserves capital for its priority drill targets.
• High leverage to exploration upside - In success, Impact's relatively small market cap provides shareholders with high leverage to potential discoveries. Even modest drilling success could re-rate the stock materially.
• Attractive entry valuation - With a weak share price, Impact's market valuation does not appear to fully reflect the underlying prospectivity of key projects. Investors can access potential upside at a discounted entry point.

However, speculation in small resource explorers is very high risk. Despite its strengths, Impact requires major exploration success to unlock significant upside. This remains elusive so far. Investors should be wary of the potential for further share price underperformance if drilling continues missing the mark.