Azimut (AZM, TSX-V) Is Just The Latest Example Of Why We Play This Game (And Why You Read PSE))

Jan 17

Azimut (AZM, TSX-V) Is Just The Latest Example Of Why We Play This Game (And Why You Read PSE))


It’s sad to hear about people that bought stocks at some point in their life, lost money and then quit.

I’ll never forget about the time I lost all my money, 100% of it, on my top 2 stocks.  Golden Band and Connacher Oil were my favorites (I believe this was 2012), small Gold and petroleum producers.  Believe me, I’d done my homework.  These were big important investments for me.  It was money I could “afford” to lose, but I didn’t plan on losing it.

I really-really didn’t want to lose this money!

Nobody likes losing money.

We’re talking $10,000 – $20,000, and that was a LOT for me at the time.

But lose it I did.

Despite my best efforts, hopes, and all the homework and research, Golden Band and Connacher Oil wound up being complete busts.

Painful, it was a body blow for sure, but I didn’t quit.  It was an expensive lesson but I learned a lot from it.

By this point in my investing life I’d already taken a few hits, but I’d also tasted success.  My experience and education as a speculator, investor, money manager, newsletter writer, whatever you want to call me, mainly came from the school of hard knocks.  Sure I was a voracious reader and wanted to know everything there was to know about stocks, but this was learning by doing – a “learning by losing” kind of education.

Until someone’s risked their own hard-earned money, they really aren’t in the game.  You’ve got to feel and experience it first-hand.  The emotional side, psychological side, and everything that goes with it.  You can’t get that from “paper trading”.

So nobody likes to lose but you can’t avoid losing.  We’re all going to “take some hits” from time to time while we’re waiting on the BIG HITS.  This is publicly traded venture capital, it’s risky, you’re going to be down, you’re going to lose money.  But you can’t quit.  You can’t give up because all the patience, hard work, and effort eventually pays off.  And at the end of the day you only have to be right, right in a big way, on 1 of or 2 of 10 stocks to really grow your bankroll and become wealthy (and stay wealthy).

Azimut (AZM, TSX-V) got halted yesterday afternoon while it was trading around 50 cents.  By this morning, when AZM reopened, it was $1.  By the end of the day it was $1.50.  That’s a triple in 24 hours!

Of course, for me and many subscribers this wasn’t an overnight success story.  I’m not sure when I first started covering AZM, but I’m sure it was more than a year ago and I’ve written about it frequently (BMR provided boots-on-ground coverage from Azimut’s HQ in Montreal last summer, we had an exclusive 1-on-1 meeting with CEO Jean-Marc Lulin where he showed us “before and afters” of the AZtechMine  expert system/technology, and how Azimut came to own large swaths of ground in the James Bay district).  Since then the stock’s pretty much been sideways, maybe down some at times, but I consistently reported on AZM and wrote about it and now our patience is being rewarded, so congratulations for all of you that followed me into this trade and stuck with it (for the record, I sold about 1/3 of my position today and Jon sold half of his position).

Now then, the results!

What’s got Mr. Market all hot and bothered about AZM? 

Before we even address this grassroots discovery, 3.15 g/t Au over 102 m, including 10.1 g/t Au over 20.5 m, let’s keep the bigger picture in mind.  Elmer, shown as #12, is merely one of many projects throughout James Bay and Quebec that were identified by Azimut’s AZtechMine expert system/technology (their secret sauce).

Even at $1.50 per share Azimut is still a sub $100 million company.  They’ve basically proven their AZtechMine system is “predictive” and it can be used anywhere (worldwide) where enough data exists, but Quebec has been Jean-Marc and Azimut’s focus for over a decade.  Simultaneously now, with Elmer, several projects are being advanced and fully-funded by SOQUEM.

SOQUEM will be spending up to $40 million via the “Nunavik Exploration Alliance” (to earn 60%).  Who knows what’ll eventually turn up on this Rex Trend (which is just massive!).  It, the Rex Trend, like Elmer, was identified by Azimut’s AZtechMine system with help from lake bottom sediment anomalies.

The Exploration Alliance will be drilling at Rex during H2 2020.

For a project generator, like Azimut, they couldn’t have picked a better project to make a discovery on because they still own 100%.  Just a wild guess here, but given Azimut’s lengthy history, respect within the industry, and project portfolio – what’s all that worth? – I don’t think a sub $100 million valuation is anywhere near outrageous and AZM could keep pushing higher based on excitement surrounding Elmer.

Only 7 holes have been drilled at Elmer, ever, and all hit, so excitement and intrigue could continue to ratchet this thing higher in the days and months to come.

Jean-Marc Lulin has a history of leaning toward conservatism.  Yet, in today’s press release Azimut made the following bold statement: Azimut’s management considers these results to be among the most significant Gold exploration results in the James Bay region since the 2004 discovery of the Éléonore deposit by Virginia Gold Mines. The Éléonore mine is currently owned and operated by Newmont.

This is a really bold statement. Jean-Marc would not have published a line like this lightly. Eleonore sold for north of $400 million.

AZM is just the latest example of why we play this game, and why you read BMR.

AZM Long-Term Chart

Note the confirmed breakout above the 3-year downtrend line in late 2019.  When something like this happens, odds are high a stock is going to go for a big run – not necessarily immediately, but sooner rather than later.

AZM closed today exactly at long-term resistance at $1.50 (2011 high).  Next Fib. level is $2.20, so don’t be surprised if that’s a price we see in the not-too-distant future.  We’ll have a short-term chart in tomorrow’s BMR Morning Alert.