Octava Minerals (ASX: OCT) Starts Drilling at Indium Discovery: Buy Before Q1 2026 Results or Wait for Proof?

Octava Minerals (ASX: OCT) has surged 67% over the past month as the company kicks off drilling at its Federation Project in Tasmania for the first time in five decades. The catalyst is timing: China imposed export controls on indium in February 2025, while U.S. tariffs on Chinese critical minerals hit 25%. With historical sampling confirming 860 ppm indium, a notably high grade, we believe the market is betting Octava has stumbled onto something valuable at precisely the right moment.

The question for investors is whether to enter now, ahead of Q1 2026 drilling results, or wait for geological proof. With a $4.35 million market cap, this is a pure speculation play where the difference between discovery and disappointment could be a 200% gain or a 50% loss.

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Why Indium Matters: China Controls 70% of Supply and Just Cut Off Exports

Indium doesn’t get headlines, but it’s critical for touchscreens, solar panels, AI data centres, and 5G infrastructure. What matters for investors is the supply squeeze: China controls roughly 70% of global production and imposed export restrictions in February 2025, cutting off supply to Western markets. The U.S. responded with 25% tariffs on Chinese critical minerals, making non-Chinese sources suddenly valuable.

The implications are significant. Global demand is projected to outpace supply through 2030, creating a structural deficit that’s already pushing prices higher; indium is up 18% year-to-date. For investors, this means any credible non-Chinese indium project now carries a strategic premium. If Octava can prove a viable resource, we believe it will enter a market with strong tailwinds and almost no competition from new Western supply.

The key risk is whether drilling validates the high-grade samples or if this is an isolated occurrence that doesn’t extend across the deposit.

Octava’s Federation Project: Multiple Revenue Streams Reduce Single-Commodity Risk

What makes Federation compelling is its polymetallic nature. Alongside indium, the project contains copper, zinc, silver, and tin, multiple potential revenue streams that reduce dependence on any single commodity price. This diversification matters: if indium prices soften, copper or zinc could still make the project economic.

The 860ppm indium grade is the standout metric, but we should be cautious until systematic drilling proves this extends beyond surface samples. Historical drilling from decades ago showed promise, with intersections like 23 metres grading 1.19% copper, 1.7% zinc, and 121 g/t silver, but that data is old and needs modern validation.

The project’s Tasmanian location provides practical advantages we shouldn’t overlook. It sits near the Renison Bell tin mine, meaning existing infrastructure, skilled labour, and metallurgical facilities are accessible. This suggests that if drilling succeeds, Octava could move quickly towards resource definition without the cost and time burden of building infrastructure from scratch. For a micro-cap explorer, this proximity could be the difference between advancing a project or running out of capital.

The Investor’s Takeaway

Octava is an early-stage speculative play with no revenue, no cash flow, and complete dependence on drilling success in Q1 2026. At a $4.35 million market cap, this is micro-cap territory where small volumes create large price swings.

We believe the investment case rests on three factors:

• Strategic timing: China’s export controls and U.S. tariffs create genuine demand for non-Chinese indium sources

• Location advantage: Tasmania’s infrastructure reduces development risk if the discovery is proven

• 50-year exploration gap: Suggests potential for overlooked value

But investors must understand the specific risks:

• Exploration risk: High-grade samples don’t guarantee an economic deposit. Q1 2026 drilling will determine if grades are consistent and scalable across the system

• Funding risk: Limited cash means capital raises are virtually certain, creating dilution for current shareholders

• Metallurgical uncertainty: Extracting indium economically from polymetallic ore hasn’t been tested; even a good discovery needs proven recovery methods

•Extreme volatility: At this market cap, bad drilling results could trigger 40-50% drawdowns

Our view: For risk-tolerant investors seeking critical minerals exposure, the combination of geopolitical timing, location advantages, and high-grade potential creates speculative appeal before drilling results. However, conservative investors should wait for Q1 2026 results. The difference between a discovery and a duster will determine whether this becomes a multi-bagger or a capital loss.