Penny Stock Experts » Metals + Mining

Itty-bitty Benton’s BIG Bold Move Involves Rio Tinto (one of the world’s largest miners)!

daniel — Wed, 17 Jul 2019 14:26:55 +0000

After being halted most of July, shares of Benton Resources (BEX, TSX-V) started trading again this past Monday morning. Immediately, the stock ran higher, from 6 to 11 cents, on huge volume. A good sign that some speculators are enthusiastic about Benton’s BIG plan to acquire high-grade PGM projects from Rio Tinto and Panoramic Resources. The stock closed the week at 6.5 cents.

This deal, if concluded, will transform Benton from a “boring” project generator into North America’s newest Platinum-Palladium company. More than $100 million has been spent (+500 drill holes) on Escape Lake and Thunder Bay North to date (highly complimentary properties that were part of a JV agreement between Rio Tinto and Panoramic).

Can the Benton team pull this off?

Pay particular attention to point #3 on this slide:

Some of the individual drill holes are quite spectacular – 10.1 g/t Platinum+Palladium+Gold and 1.6% Copper+Nickel over 46.6 m and 2.5 g/t Pt+Pd+Au and 0.86% Cu+Ni over 121 m.

In addition to being strategically located near North American Palladium’s Lac des Lles mine, Escape Lake and Thunder Bay North are only 40 km from Lundin’s Eagle mine via barge.

For a company Benton’s size, with a $5 million market cap, this is clearly a BIG bold move!

Naturally, the question becomes: “How are they going to pay for it?”

From the day the deals were signed (July 2), CEO Stephen Stares and Benton have 90 days to raise $15 million. They had $5 million worth of cash and investments on hand, leaving a difference of about $10 million. Doable, and Stares tells me he’s getting a lot of great feedback and interest from the investment community, but how to do it without diluting BEX to smithereens?

It’s a viable concern. And I’d guess that’s partly why BEX gave back all the gains it made Monday morning.

I’d also guess many people are wondering how the heck Stares worked Benton into this BIG opportunity in the first place (I was!).

The answer to how this all came together boils down to Stares being the first person in line (if Rio Tinto ever wanted to sell he made his interest for buying known!). Benton already had an existing relationship with Rio Tinto via a JV on another project, so they know some of Rio Tinto’s geologists (they had an “in”!). Also, Thunder Bay North is only about 50 km from Benton’s office in Thunder Bay (these projects are in Stares’ backyard, so he has been watching closely!).

Benton and Stares could walk away from the table, of course, but it doesn’t sound like he will. Stares seems adamant about getting this deal done. He wants to own these projects and sees this as a once-in-a-lifetime opportunity. He along with Rio Tinto geologists believe Escape Lake is going to be a mine one day. Much of Stares’ wealth is riding on BEX, so I don’t suspect he’s going to fund the $10 million balance by selling stock at 6 cents per share (even if this deal is GREAT that would be a bad move in my view, way too much dilution). Rather, Stares is keen to do a mixture of equity/JV/project financing.

BEX is an interesting bet under 8 cents (lots of leverage to Platinum and Palladium!). Stares has several levers he can pull and there’s a chance he really surprise people positively by how little dilution is necessary to get this deal done (JV opportunities abound?).

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“Predictive Modeling” Software Identifies Provincial-Scale Copper Gold Project For Montreal-based Explorer

daniel — Sat, 16 Mar 2019 13:45:23 +0000

Good things come to those who wait.

But those who soon buy Azimut (AZM, TSX-V) and Salazar (SRL, TSX-V) shouldn’t have to wait very long to receive good things because these companies have the wind at their backs right now. In my view, this is exactly the right time to establish a new position or add to existing positions. AZM and SRL are relatively low-risk plays – they’ve recently come off all-time lows (clearly having bottomed), and they offer HUGE upside.

AZM has run from the low 20’s to 40 cents since February and wants to keep running toward its 52-week high of 47 cents (then beyond). Volume has been picking up nicely of late, too, for this relatively thinly traded equity.

Worth keeping in mind, once upon a time (2007) this was a $9 stock (and great stocks eventually like to chase their old highs).

While honing his technological skills over the past 16 years, aimed at using big data and “predictive modeling” to identify mineral deposits, CEO Jean-Marc Lulin has maintained an enviable share structure.

Sophisticated speculators have a warm place in their hearts for operators like Lulin, because with only 53 million shares outstanding any economic discovery could send AZM to the moon (again!). He’s been able to get a lot of bang for Azimut’s bucks, too! For every $1 the company has spent exploring since 2003, partners have spent roughly $7, or $70 million worth of expenditures in total.

The AZM rally got going February 25 following a deal Azimut struck with SOQUEM, Quebec’s state sponsored exploration company. As per their strategic alliance agreement, SOQUEM has made a commitment to spend $24 million exploring Azimut’s projects in Nunavik ($4 million per year, minimum).

Now that we’re in a full fledged discovery-driven bull market (mining companies are clamoring for new product), you wouldn’t want to underestimate what’s unfolding here and the implications it could have for AZM. I mean, we hear about “district scale” opportunities all the time. Everyone’s touting their district scale land package – they’re a dime a dozen.

Azimut‘s +100 km Rex Trend is actually quite unique, though, and Nunavik has new mineral province potential!

Geologically speaking, the scale of the lake-bottom sediment anomaly hosted within Azimut’s Rex Trend is phenomenal.

Yes, it’s remote, but it’s Canada remote which is arguably preferable to most remote places across the world. And the government has a long-term plan in place (the Plan Nord) to help the region become more accessible. They really want exploration and economic activity to work its way north – Azimut couldn’t be more prepared for this outcome.

Way south of Nunavik, in the James Bay region, one of Canada’s youngest Gold camps, Azimut is also a big claim holder. Lulin’s predictive modeling software identified the James Bay region even before Eleonore was discovered (a $2 billion mine). I say that to say this…since Azimut was a first mover in James Bay their ground is likely some of the best available. Yet, Mr. Market still sees little to no value in Azimut being one of the largest claim holders in Canada’s youngest Gold camp.

I suspect that low to no valuation will change rather dramatically before long (again, mining companies are clamoring for new product and they’re signing JVs like crazy).

Azimut’s projects within James Bay, all 21 of them, are pinned within the red box below.

Presently, AZM seems to be getting some love from the work Midland (MD, TSX-V) is doing on its Mythril project (Azimut has a project adjoining it). An IP geophysical survey has outlined a well-defined chargeability anomaly forming a continuous zone measuring +2 km long by hundreds of metres wide. According to Midland‘s press release, the zone of chargeability/resistivity anomalies is remarkably coincident with known Cu-Au-Mo-Ag showings and locally sourced mineralized float fields found in 2018, as well as with strong Cu-Mo soil anomalies.

Midland’s going to start drilling its best IP anomalies in mid-March.

Success at Mythril could spark a land rush in James Bay, according to John Kaiser or Kaiser Research. He recently recommended AZM as the way to play it.

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Dishing The Sizzle And Steak On 1 Australian Gold Miner And 1 Silver Pure Play In Mexico.

daniel — Fri, 01 Mar 2019 13:34:25 +0000

Sizzle And Steak!

Ideally, we want some combination of both.

We want sizzling steak!

That’s the winning ticket.

Superior Gold Inc. (SGI, TSX)

Here’s the sizzle:

Australian-listed Gold mining stocks have been performing better, on average, than Canadian-listed companies. Their share price outperformance has been such that many are shopping for North American assets, leveraging relatively lofty valuations to make deals. I say that to say this: If Superior were listed in Australia, or even had a dual listing, as opposed to being traded solely on the Venture, the stock would be valued at least 100% higher.

Instead of 100% I initially was going to say 50%, for concern of making too strong a statement. But screw it! Shares of SGI should be fetching $1.50 or more!

You don’t have to take my word for it either. Of 9 analysts covering SGI, not one has a price target below $1.50 (and BMO is calling for $2 per share!), yet Friday’s closing price was 77 cents.

Normally I’d be inclined to be a bit skeptical when EVERYBODY has a “BUY” rating on a stock, but in the case of SGI I think we all can be right eventually.

However, until SGI turns upward convincingly, it seems Mr. Market will remain skeptical because the deal has a “too good to be true” err about it.

Looking at the chart below I want you to notice two things in particular.

First, the big volume bar of nearly 6 million shares in October. Record breaking volume on a down day is often indicative of a low.

Doesn’t always prove to be the all-time low, but volume spikes tell you you’re getting close. Secondly, following the volume spike in October there are 3 tails (they don’t show up as clearly on the long-term chart) downward on light volume but SGI never closed below 70 cents on those occasions. Technical analysts could argue a triple bottom is in place.

Here’s the steak:

Lots of meat on the bone with Superior and I’ve been coming at this story from various angles for several months now. Where to start?

One of my favorite features is “excess mill capacity”. Building mines is expensive, really expensive. Superior and its shareholders are the beneficiaries of a bear market because they purchased $150 million worth of mills and operational facilities for $34 million. On top of that they inherited 450 km of underground development and 7,000 km of drill core (so they’ve got data out the wazoo!). Doing all this work from scratch would cost upwards of $2 billion!

Superior likes to say they acquired this asset for 1 penny on the dollar.

Getting back to the point of excess mill capacity, Superior’s producing at a runrate of 100,000 ounces Gold per year via a 1.8 Mtpa conventional CIL mill. All good. Even better is the 1.2 Mtpa (a second mill!) sitting on the sidelines. Once they’ve got the tonnage, perhaps following a new discovery, Superior can bring its second mill into the game rather quickly and inexpensively. In other words, they’ve got great organic growth potential.

Bottom line: “Valuation” is what I like best about Superior!

However you want to break it down on metrics, SGI is stinking cheap. Almost too cheap, which leads me to believe there’s a “too good to be true” feeling about the stock (that feeling of slight concern will change quickly, though, when SGI starts heading higher). On a price-per-ounce of production, after subtracting its $22 million cash from the $73 million market cap, savvy speculators are paying roughly $500. Given the backdrop – Gold’s in a bull market – I’d argue each ounce of production should be valued at $1,000 or more (which brings SGI to the $1.50+ share price many analysts are calling for).

After shopping around you’ll find most junior Gold miners are priced anywhere between $1,500 and $3,000 per ounce of production. Therefore, SGI has a legitimate shot of trading north of $1.50 per share. Yet simultaneously, given the valuation, it’s hard to see how SGI could spend much time below 70 cents. So the risk-reward from a buyer’s standpoint doesn’t get much better, call it 10% downside and +100% upside.

*Daniel’s Rating = 10% Sizzle and 90% Steak

GoGold Resources Inc. (GGD, TSX)

Here’s the sizzle:

Tick tock, tick tock, the clock’s counting down and I think GoGold will announce a strategic acquisition before April (that’s what insiders are hoping for, anyway). They’re sitting on about $16 million worth of cash and shares of Metalla Royalty (MTA, TSX-V), a position that’s increased 25% in the month of January, and CEO Brad Langille isn’t in the business of accumulating money.

Langille’s a proven business builder and wealth creator, which only increases the odds of him being successful again with GoGold.

Langille and his team have been been doing due diligence for a good while now and I’m told they’re deep into the process on one asset in particular. They’re working thru permitting and legal stuff as we speak. If successful in closing the transaction, GoGold shareholders and watchers may be very impressed with both the terms and potential of this project (2 g/t Au open-pit potential?).

Adding a new project with production and/or exploration upside will complement GoGold’s existing Parral Tailings Project nicely, hence the reason any acquisition announcement should provide a boost for GGD.

Looking at a shorter-term chart, GGD has a really nice bent to it. I’m pretty darn sure the bottom is in the rear view mirror and GGD drives higher in the weeks and months ahead.

Here’s the steak:

Pioneers in “agglomerated heap leaching”, GoGold has a few arrows in its back to show for it. Recovery and production rates had been all over the place, mainly lower than expected, but following years of trial and error Langille and GoGold have agglomerated heap leaching figured out (they believe). To my knowledge they exited December with a production rate of approximately 5,000 ounces Silver per day, or 150,000 ounces (using recent Silver prices GoGold’s breakeven should be about 110,000 ounces per month).

Assuming 150,000 ounces per month holds throughout 2019 (although in theory, with a daily stacking rate of 7,500 tpd, production could increase to 200,000 ounces per month) and Silver prices average $18, this stock could easily double from 24 cents.

Here’s how I arrive at a share price of 50 cents for GGD – 1.8 million ounces x $18 per ounce = $32.4 million in revenue.

Silver miners can trade at valuations of at least 3 x revenues during a bull market, therefore GoGold’s market cap appreciates from $42 million to $97 million. And that only accounts for the Parral Tailings Project. As per the sizzle, Langille is keen to make an accretive acquisition during Q1.

p.s. If the past few years weren’t hard enough for most miners, Tocqueville Funds really put a lot of pressure on GGD. Their position was reduced from around 30 million shares to less than 3 million (cut by 90%!).

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3 Project Generators Entering 2019 In A Strong Financial Position (They’re Valued Near “Cash”, Or Below)

daniel — Sun, 27 Jan 2019 13:10:26 +0000

Benton Resources Inc. (BEX, TSX-V)

Market Cap = $4.2 Million | Cash + Investments = $5.9 Million

Prospecting and mining roots run deep in the Stares family, dating back at least 100 years. They’ve even been recognized by PDAC with the “Bill Dennis Prospector Of The Year Award” for their achievements.

In addition to doing his own boots-on-the-ground reconnaissance work, I think it’s fair to say CEO Stephen Stares is well-connected with independent prospectors across Eastern Canada (especially in Newfoundland and Ontario). With roughly $5.9 million in working capital, Benton is ready and able to pull the trigger on properties of merit. The company has around 11 projects available for option (Rio Tinto is working on their Bark and Baril Lake claims as we speak).

Knowing that, a project called “Panama”, located about 50 km northeast and along strike of Great Bear (GBR, TSX-V), is currently Benton’s focus.

The Panama Property hosts one of the highest Gold grain counts (107 grains) in till sampling found to date in the Red Lake District (according to the Ontario Geological Survey).

This morning Benton announced it will be funding a 1,000-m drill program at Panama during the month of January.

BEX is trading at 5 cents, well off its most recent high of 15 cents (4 cents looks to be firm support).

Eagle Plains Resources Ltd. (EPL, TSX-V)

Market Cap = $9 Million | Cash + Investments = $7.6 Million

Exploration is the R&D side of the mining business. It’s a Risky business, with a capital “R”, but the Rewards for economic discoveries are huge (capital “R” there as well).

The world as we know it today wouldn’t function without metals, so somebody’s got to do the searching. Major mining companies aren’t doing grassroots exploration, most junior miners aren’t either, which leaves a ripe opportunity on the plate of experienced prospecting groups like Eagle Plains.

The company hedges the inherent risk of grassroots exploration by using OPM (other people’s money) to do the heavy lifting (drilling). Simply put, Eagle Plains, like other project generators, would rather keep 20% of something rather than 100% of nothing. And “nothing” is what the vast majority of exploration stock shareholders are left with once all is said and done.

CEO Tim Termuende, P. Geo., and his Dad (Bob) founded Eagle Plains over 25 years ago. Impressively, the equity has never been rolled back and if you account for spinoffs EPL has paid roughly 40 cents worth of dividends to its shareholders since inception!

Also unique, and of consequence, Eagle Plains generates revenue via its 3rd party geologic consulting arm (TerraLogic). Not only does this non-dilutive revenue help fund the company during lean years, it helps keep a team of geologists employed and thinking about the next discovery area. The following slide illustrates how much money has been spent on exploration to date (it’s a lot relative to their $1.4 million market cap, ex-cash and investments).

Eagle Plains has a portfolio of 25 projects, plus royalties.

They’ve got large equity stakes in Taiga Gold (TGC, CSE), which has a joint venture with SSR Mining (SSRM, TSX) in Saskatchewan, and they’ll also end up with a big chunk of a new listing called Rockridge (ROCK, TSX-V). Smart speculators will keep an eye on TGC and ROCK as it relates to Eagle Plains‘ investment portfolio.

EPL is trading at 10 cents, way down from its all-time high of nearly $2 (8 cents should be the floor). The stock’s jumped 2,600% on one occasion and 1,600% on another over the past 2 decades. So if history rhymes or repeats, EPL is overdue for another massive move.

Strategic Metals Ltd. (SMD, TSX-V)

Market Cap = $30 Million | Cash + Investments = $22 Million

Arguably, nobody knows the Yukon better than Archo Cathro and Strategic Metals. The two exploration groups fit together almost like hand and glove. Combined, they’ve been involved with almost every major discovery in Yukon – period.

Strategic is a project generator’s project generator! They’ve got more than 100 properties, of which 10 or 15 are getting boots-on-the-ground advancement each summer (in-house work). When the exploration cycle turns for the better, more than half of Strategic’s portfolio will get attention via JV, in-house, and/or spinoff exposure.

If there’s a knock against Strategic, having too much land could be it! They’ve got claims staked in and around every known belt and prospective rock package in the province.

While Strategic also has a large investment portfolio, with hefty stakes in companies like Precipitate (PRG, TSX-V), ATAC Resources (ATC, TSX-V), Silver Range (SNG, TSX-V), and a little-known diamond play called GGL Resources (GGL, TSX-V), smart speculators interested in SMD should keep an especially close eye on RK.

Over the past few weeks Rockhaven (RK, TSX-V) has moved up from 8.5 cents to 17 cents, and Strategic owns 66 million shares! It’s not unreasonable to think RK could continue its advance as this bull market moves forward. Assuming it hit 40 cents per share, a little more than a double from here, Strategic’s entire market cap, almost, would be covered by Rockhaven shares.

Once nearly a $4 stock, SMD seems a shell of its former self at 33 cents. But in reality, they’re a stronger project generator today than they were then. I guess the stock could temporarily drop back to 25 cents, anything’s possible, though I highly doubt it.

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3 Strong Reasons GoGold (GGD, TSX) Is A “BUY” Right Now

daniel — Mon, 21 Jan 2019 13:03:16 +0000

GoGold Resources Inc. (GGD, TSX-V)

Having closed yesterday at 27 cents, GGD is up 23% since my initial recommendation less than a month ago (December 18). This morning I’m going to use this opportunity to keep pounding the table on GoGold by providing 3 strong reasons you should accumulate some stock, if you haven’t already.

1. The Bottom Is Firmly In Place!

Building from its strong base of 20 cents, I see GGD trading up to +50 cents by mid-year for a potential gain of +100%.

The last 4 years have been a one-way street for GGD (down!). From a high of $1.75 the stock didn’t find its ultimate low until very recently at 19 cents. I’m sure we can all sympathize with the longs who’ve been holding the whole way. Ouch! They’ve lost 85% on paper. But we also know how this industry works. It can be incredibly volatile. So when mining stocks finally change direction they can more than make up for years of losses in a matter of months (remember H1 of 2016?).

After years of pain relating to Silver prices and getting past the agglomerated heap leach learning curve, GoGold finally has its 100%-owned Parral Tailings Project figured out. Plus, Silver prices should be helping them rather than hurting them.

Sure looks and feels like GAINS going forward for owners of GGD!

2. Finally, They Figured It Out!

Often times you can recognize pioneers because they’re the ones with the arrows in their backs.

It’s taken longer than everyone would have liked but GoGold’s finally got this whole “agglomerated heap leach” thing figured out.

Their learning curve brought pain, headache, and expenses along with it but they’re confident the worst is in the rear view mirror.

Production for the quarter ending September was GoGold’s worst for 2018, which they attribute to testing associated with second lift irrigation, but CEO Brad Langille’s guidance for the quarter ending December is between 325,000 and 355,000 ounces of Silver equivalent (35% higher, at least).

The company’s near-term goal is making sure a fleet of 40 ton trucks is getting filled 125 times per day, equating to a 5,000 tpd stacking rate. Assuming recovery rates stay consistent, GoGold will produce approximately 425,000 ounces per quarter by stacking 5,000 tpd onto the leach pad (a nice bump UP from current levels). However, their ultimate goal is achieving a stack rate of 7,500 tpd.

7,500 tpd is an achievable goal and GoGold would become a +2 million ounce producer.

To my understanding, GoGold’s break-even rate is approximately 110,000 ounces of Silver per month using current prices. They exited December averaging 5,000 ounces per day, so GoGold’s on track for a strong Q1 2019. We should be getting an update sometime in January with the encouraging news.

3. They’re Going To Make An Acquisition!

“GoGold is in a very strong financial position and actively looking at opportunities to add quality undervalued assets,” said Langille on December 21.

What does an ideal acquisition target look like?

GoGold is looking at single asset producers, both public and private, that are priced favorably. Such a deal, perhaps a merger of equals, could benefit by bringing down overall G&A and mining costs. With that said, Langille has also been evaluating non-producers. The company isn’t opposed to buying a highly prospective, dare I say “proven”, exploration stage property.

In my view, either scenario will ultimately pay off for shareholders.

GoGold grows its production considerably, while simultaneously adding discovery optionality, via a merger of equals near the bottom of the market (therefore paying a fair/great price while gaining cost synergies). Otherwise, GoGold grabs a smaller exploration company and funds it toward production via cash flow from Parral – a strong position to be in.

Either way, shareholders gain discovery optionality at a time Mr. Market is beginning to place a premium on high-quality discoveries and exploration properties. Therein lies an important point – exploration upside! This one factor alone will be a great complement to their Parral Tailing Project, which offers production for another +10 years but no discovery premium.

GoGold needs to introduce a “mystery factor”, and they will.

I’ll argue one thing’s for sure, Langille is going to make another good deal for GoGold (like he’s done in the past).

To my understanding, given the due diligence done to date (plus the possibility this awesome window of opportunity could be closing given action in the metals market), Langille could be close to making a deal. By the sounds of it GoGold would like to have one finalized by the end of Q1.

If I had to guess, reading between the lines, GoGold’s going to acquire an asset that’s privately owned by a Mexican family. This particular property, to be named later, is pre-production. Speaking to its exploration upside and production potential, historical drilling has outlined the makings of what could become a 2 g/t Au open-pit mine!

Langille and his team have been busy working through some permitting and legal matters concerning that property.

Insiders are thinking and hoping this property, owned by a Mexican family, could be the next Santa Gertrudis. Langille recognized Santa Gertrudis as an undervalued opportunity, paid $11 million and ultimately got $92 million out of it (netting about $50 million for GoGold in the process).

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Cuckoo Or Convinced? Robert Hinchcliffe Has Been Buying Galway Metals (GWM, TSX-V) The Whole Way Down!

daniel — Wed, 16 Jan 2019 12:59:32 +0000

From nearly an all-time high of 53 cents to multi-year lows of 15 cents more recently, Galway’s CEO Robert Hinchcliffe has been buying and buying. According to SEDI filings he’s added more than 4 million shares to his position, which now stands at a total of 11,847,884 shares (or approximately 13% of Galway‘s shares outstanding).

As a sophisticated speculator, you typically only want to be part owner of companies run by management teams with a meaningful amount of skin in the game. You want management’s incentives to be aligned with your own – a higher stock price.

So whenever you see insiders buying and buying, the whole way down (from 53 cents to 15 cents), like Hinchcliffe has (and Michael Sutton to a lesser extent, who previously worked as Chief Geologist for Kirkland Lake), it’s normally a great sign for what’s to come.

Clarence Stream – An Emerging Gold District On Canada’s East Coast?

In Clarence Stream, Galway owns 65 km of strike length along the Sawyer Brook fault.

Sutton postulates that the Sawyer Brook fault is analogous to the Porcupine Destor fault or Larder Lake (if he’s proven right, this would have massive implications for the Clarence Stream land package).

Galway acquired the property several years ago because they believed it was “misunderstood”. Essentially, the previous owner was looking for high-grade Gold vein deposits and didn’t believe multi-million ounce open-pit deposits could exist in Eastern Canada.

Now we know they were wrong and Galway was right.

Marathon (MOZ, TSX), Atlantic Gold (AGB, TSX) and Oceana Gold (OGC, TSX) have all demonstrated that multi-million ounce open-pit deposits, from 2 to +4 million ounces, exist along the east coast.

In Summary: shares of GWM make for a pretty interesting speculation. As per Galway’s financials ending September, they had $5 million cash and completed a $3.3 million raise in December. I wouldn’t have thought the PP was necessary, but they’re definitely cashed up now with a market cap of $22 million. Having looked at many-many other resource deals, this seems a reasonable valuation for Clarence Stream and what could be a new Gold district in friendly eastern Canada.

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4 Fabulous Project Generators! Guess Who…

daniel — Tue, 10 Apr 2018 18:02:41 +0000

Each of these 4 stocks is trading at or near decade lows, but their futures and financials have almost never looked better!

In my mind, these are “staple stocks”. These are some of the blue chips of the exploration business. Assuming you’ve got a year’s worth of patience, I can’t imagine you losing money on any of these stocks (not from these low-low prices). Over a longer time frame, say 2 or 3 years, the odds of losing money with these stocks is very close to zero – but you stand to make a FORTUNE!

…the risk/reward equation has almost never looked better.

Here’s the strategy – as opposed to picking just one or two I’d suggest equally weighting all 4. Make it a basket! If you were to buy the same amount of these 4 stocks and hold them for a year or more I’d be astonished if the basket didn’t trounce the market averages (pick your barometer, this will beat it), while assuming less risk.

On second thought, this basket might not outperform a basket of mining stocks with bad balance sheets (those offer huge leverage!). However, my fabulous 4 are a heck of a lot safer. Unlike the miners with bad balance sheets these prospect generators have like zero chance of going bankrupt (if they survived the last decade they ain’t dying now).

Azimut Exploration (AZM, TSX-V)
Eagle Plains (EPL, TSX-V)
Globex Mining Enterprises (GMX, TSX)
Strategic Metals (SMD, TSX-V)

I don’t want to sound over-confident or cocky. Maybe 1 of 4 will find a way to lose, anything is possible. But as a portfolio strategy, from these low-low prices the odds of this basket returning +25% or more between now and this time next year is extremely good. Extend your holding time and this basket could easily deliver +250% returns (while exposing your capital to a very limited amount of risk).

These companies offer the total package – prospective properties, cash flow, royalties, and management teams that are masters at using OPM (other people’s money) to explore/develop their projects.

Regular readers will already be familiar with these names, so I’ll try to keep this short and sweet. Tremendous bang for the buck with these 4 stocks!

Azimut Exploration Inc. (AZM, TSX-V)

Market Cap = $17 million | Working Capital Est. = $3.3 million

Compared to its project generator peers, Azimut has one of the best leverage ratios in the business (roughly 6 to 1). Since its inception, partners have spent $57.3 million versus Azimut’s $9.6 million.

Azimut and Goldcorp, the key partner, believe they’ve got a discovery underway within a 4 km by 500 m Gold-bearing corridor at Eleonore South (located 10 km from a $2 billion mine and +8 million ounces).

Drilling results to date include 4.9 g/t Au over 45 m and 6.1 g/t Au over 9 m. As of late February a 5,100 m drill program is underway. Targets include a 79 g/t Au channel sample over 5.8 m and nearby a 1,500 g/t boulder (neither area has been drilled previously).

As you can see, Azimut has Goldorp’s Eleonore mine pretty well covered. Any significant discovery in the area would look quite appetizing to the hungry major.

Elsewhere, but also in the James Bay region, Azimut is drilling a “Ring of Fire” look alike called Chromaska. CEO Jean-Marc Lulin is excited about this property so he’s self-funding the program. Simultaneously, Azimut is leveraging its “Big Data Analytics” approach to exploration via an agreement with SOQUEM (the companies are doing early-stage work on up to 11 properties).

With only 48 million shares outstanding, AZM offers explosive upside potential (this thing is a coiled spring!), and I’m not seeing much room to the downside.

Relatively speaking, Azimut doesn’t have many shares outstanding. Plus, AZM is tightly held. Large Quebec-based institutional investors and Insiders control more than 50%.

Eagle Plains Resources Ltd. (EPL, TSX-V)

Market Cap = $22 million | Working Capital Est. = $5.3 million

You usually don’t hear the words “sustainability” and “exploration” used in the same sentence, but Eagle Plains isn’t your usual resource stock. The company has been operating for 25 years and has never done a rollback. Since 2010 EPL has performed spectacularly for shareholders on two separate occasions, gaining 2,600% and 1,700%!

The biggest spike in Eagle Plain’s history came shortly after its spin-out of Copper Canyon. Question being – could EPL have another big spike leading up to and following the spin-out of Taiga Gold?

Scheduled to begin trading later in the month (buy EPL ASAP if you want to the Taiga dividend), Taiga has been prepped and is being readied for an eventual takeover by SSR Mining (SSRM, TSX).

SSR Mining has commenced an 18,000-m drill program on the Fisher Property. Given that amount of drilling, it’s unlikely the program doesn’t turn up some good results. Assuming SSR Mining likes what it sees, Taiga will receive $3 million as a cash payment toward further exploration and/or be acquired outright.

Either way, Taiga is going to be a nice dividend!

Many people might think EPL would be reduced in price accordingly to the spin-out. And it may, but probably not by much because Eagle Plains will shift gears to Iron Range.

It sounds like Eagle Plains will likely self-fund a drilling program (about $500,000 worth) on Iron Range this summer.

Another thing people might not know about Eagle Plains is that it has an exploration/consulting subsidiary called TerraLogic. That company has really helped pay bills, keep geologists employed (they have about 15 people working), and upgrade the property portfolio. In total, Eagle Plains has more than 30 projects and a dozen royalties (located in Western Canada).

Globex Mining Enterprises Inc. (GMX, TSX)

Market Cap = $23 million | Working Capital Est. = $3.1 million

Trader Jack Stoch, also known as Globex’s CEO, started acquiring and vending exploration projects in 1976. Presently, I’d argue Mr. Market is greatly under-appreciating Jack’s 4 decades worth of effort.

Every single one of these properties, which stretch across the Abitibi geological belt for 320 km, have have one or more of the following key attributes:

Historical or NI-43–101 Resource
Drill intersections of economic interest
Past production
Mineralized showing or drill targets
Location on major ore localizing structures or in prolific mining camps

Many companies like to say they have “royalties”, but very few of them have royalties generating cash flow. Globex does!

Globex’s Mid-Tennessee Zinc Royalty, on a mine operated by Nyrstar, is expected to generate nearly $2 million at current Zinc prices. During the month of January it paid $220,180! Think about that. Many exploration stocks, of comparable value to GMX, would have to sell 20 million shares at 10 cents to bring in that kind of money (and for Globex it could keep coming in for years, no effort required).

GMX may be down in price, but it definitely isn’t out!

Tremendous unrecognized value is pact within this $23 million market cap company (selling for roughly 10 x cash flow, a discount to most “royalty” stocks). If someone wants to sell you GMX for less than 50 cents over the coming months, I’d suggest buying it. More than 2 decades in the making Globex only has 51 million shares outstanding (GMX could certainly trade at $2 or $3 again).

Strategic Metals Ltd. (SMD, TSX-V)

Market Cap = $38 million | Working Capital Est. = $33 million

Here’s another company that’s been plugging away for more than a decade, with no “value” to show for it (unless it’s hidden in this +100 property portfolio somewhere). I don’t know, I’m just thinking Strategic must be worth something number far greater than the sum of its cash and marketable securities.

More than a few major and mid-tier mining companies have made substantial investment into the Yukon lately, so it’s a solid jurisdiction to be in. No real problems there, aside from arguments about remoteness and infrastructure (but now a days you’ve got to explore unexplored territories, and the government is addressing the infrastructure challenges).

While not being reflected in the stock price, Strategic would argue its research has kept them ahead of the herd (maybe they should be getting more respect?).

At 43 cents, SMD is just above what looks to be really solid support at 40. The stock has tested that level at least half a dozen times over the past 2 years without breaking below.

We’re getting closer to what should be a very active Yukon exploration season. Companies are starting to announce their plans. Today ATAC said Barrick would be drilling 20,000 m on the Rackla trend (home to Canada’s only known Carlin-style system).

Bottom line, if you want to make a discovery in the Yukon you should probably be talking to Strategic Metals.

This group has been involved with many discoveries and they know the territory very well.

I wouldn’t be selling SMD, not at this low-low price.

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186 g/t Gold And 1,055 g/t Silver Over 2 Metres At Sesmo!

daniel — Tue, 27 Mar 2018 16:11:30 +0000

186 g/t Gold And 1,055 g/t Silver Over 2 Metres At Sesmo!

Fairly exciting news to report – the first drill hole at Sesmo has been completed (now they’re drilling a second!). Next month we’re going to find out what Salazar Resources (SRL, TSX-V) and Adventus (ADZN, TSX-V) intercepted below a trench that yielded 186 g/t Gold and 1,055 g/t Silver (including 39 g/t Gold and 741 g/t Silver over 15 m)!

El Domo (one of the world’s highest grade VMS deposits) and Sesmo Sur (2.5 g/t Gold and 50 g/t Silver over 15 m) are two examples within the 21,537 hectare Curipamba Property where trenching results led to drilling discoveries. So I’m expecting solid numbers from Sesmo, but hoping for blockbuster numbers!

With two rigs on the ground (pending results they’ll be bringing in a third rig), and plans to drill around 20,000 m, these results from Sesmo will be the first in a wave of news flow that continues throughout 2018.

If 20,000 m of drilling, an airborne geophysical survey, bulk sampling, and an updated PEA doesn’t move Salazar Resources to at least 25 cents (a “leap” of $12 million in market cap?), I will be astonished and completely dumbfounded (but I’ll keep buying anyway).

…please show me another exploration stock, sub $15 million market CAP, with such an extensive work program (on a world class deposit).

Only 1 Of 50 Resource Speculators Knows About SRL!

Ask around.

Okay, on the one hand I wish SRL had an aggressive marketing and promotional program in place. But on the other, I’m completely convinced that when PEOPLE WAKE UP to this opportunity (starting in April) it’s going to move very quickly.

The upside of Salazar Resources obscurity is that there are lots of new buyers on the sidelines! If you think purchasing SRL is difficult now, just wait until it breaks above 15 cents on volume. From there the chase will be on because only 30% or so of the shares are in the float (70% is in strong hands, and they’re in this for way more than a double).

SRL has bumped its head against 14 cents at least a dozen times since October. More recently, it doesn’t want to spend much time below 12 cents. As I see it, by purchasing SRL in this range you’re risking a penny or two for reward potential of 30 cents or more (assuming you’re patient). I’ve been adding to my position lately and I’m extremely confident big paydays are coming.

: ) Mr. Market will eventually come around to my way of thinking.

Wrapping up with Salazar Resources, I’d like to remind you that some really smart geologists are digging Curipamba (then provide an introduction to Ruminahui).

According to my sources, Altius’ CEO and Co-Founder Brian Dalton says Curipamba is one of the best exploration projects he’s ever seen;
Lundin Mining’s (LUN, TSX) Senior VP of Exploration, Neil O’Brien, is one of Curipamba’s biggest fans (which explains why the company took a 5% stake in Salazar Resources years ago at much higher prices;
Geologically speaking, there are some “weird” and potentially special things happening there, which normally means GOOD things. While the VMS potential is well recognized, Curipamba could also host a completely different type of system (perhaps hydrothermal).

While Eskay Creek is famous for its very high-grade Gold, many people have forgotten that it was technically a VMS deposit with Copper and Zinc to go along with the exceptional Gold and Silver grades (so comparisons are being made between it and Curipamba).

The Entire Country Is Heating Up, And Big Dollars Are Flowing In!

I’m surprised speculators aren’t tripping over themselves rushing in to place bets on Ecuador.

…the world’s largest mining companies are.

Lundin Gold led the way, but since then (really just last year) BHP has joined the rush, along with Anglo, Vale, First Quantum, Fortescue, and Hancock. Perhaps most notable, Codelco, Chile’s state-run and world’s largest Copper miner, made its first move outside of their home country.

Here’s the deal – Codelco is buying into Llurimagua and partnering up with ENAMI (Ecuador’s state-run miner). Llurimagua happens to be located just 33 km SW of Salazar Resources’ Ruminahui project.

Maybe it’s nothing, but in theory, I could see the market getting excited about Salazar Resources drilling Ruminahui. Who knows, Ruminahui could get a JV partner to bite since it’s located on trend with a pair of +1 billion ton Copper deposits (an emerging/recognized porphyry belt?).

Salazar Resources’ 100% owned Ruminahui concessions cover 2,910 hectares prospective for Au-Cu-Ag targets. The main targets identified to date are the original discovery areas previously worked by artisan miners.

Gold values from rock chip and channel sampling have returned grades of up to 2.7 g/t Gold over 55 m and 3.4 g/t Gold over 8 m.

In Summary: The market has yet to recognize the value in Curipamba and El Domo (a world class VMS deposit and property with +12 untested targets). Salazar Resources, with a sub $15 million market cap, continues to own 100% of that project until Adventus spends $25 million. In addition to Curipamba, Salazar Resources controls 9 more highly-prospective properties (selected by lifelong Ecuadorian geologists). Ruminahui is one, and happens to be located 33 km SW of and on trend with what will become a massive Copper mine jointly owned by the Chilean-Ecuadorian state-run mining companies.

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*Author has a long position in Salazar Resources

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Meloy Property Sports Ball Crushing 7 x 3 km Copper Soil Anomaly! Strategic Metals (SMD, TSX-V)

daniel — Sat, 17 Mar 2018 15:26:47 +0000

We all know the world is hungry for Copper, and it’s got an appetite that’s unlikely to be satisfied. Explorers and geologists are chasing this stuff like crazy, they’re looking in very nook and cranny from New Mexico to No Man’s Land.

More of those energies and monies will eventually wind up in the Yukon, where good ol’ Strategic Metals (SMD, TSX-V) is sitting on two very prospective (and massive) porphyry targets.

1) Meloy!

Pretty impressive isn’t it! Western Copper’s Casino deposit is big, like really big, weighing in at 4.5 billion pounds Copper and 8.9 million ounces Gold (and that’s in the “reserve” category).

…and the geochemistry footprint/anomalies on Strategic Metals’ Meloy Property is at least 300% larger.

2) How Much Copper Could Be In The Hopper?

The boys at Strategic Metals seem to like picking on “Casino”, don’t they!

I’m no geologist, but from what I’ve read and heard “geochemistry” and “soil anomalies” are good early-stage indicators (especially in the Yukon). Yes, it’s very early in the discovery process, but here Strategic Metals is sitting on two properties with exceptional exploration potential (Casino-like potential?) and they’re basically worthless.

…Strategic Metals’ market cap is $37 million and they have about that much worth of cash and securities.

With any luck, Strategic Metals’ 40% stake in Rockhaven (RK, TSX-V) could be worth more than its current market cap alone. Its Klaza deposit is currently the highest-grade Gold deposit in the Yukon. With an estimated 1.3 million ounces in the ground, Strategic Metals’ share would equate to roughly 520,000 ounces.

Here’s some opposing ideas on how a prospective investor/shareholder might think about SMD:

Screw these guys, I’ll never buy SMD because they have little or no respect for “marketing” and “promoting” their stock. They have a “build it and they will come” mentality. There’s too many moving parts. Therefore, it will remain undervalued and stuck in the “value bin” collecting dust. CEO Doug Eaton and Co. will never test their theories to the extent they could have, assuming the stock traded above its liquidation value from time to time (I’m sure it will at some point in this cycle, but wanted to be somewhat dramatic).
This is one of the cheapest damn stocks in the entire resource market! Prospect generation is arguably the most reliable and relatively safest ways to participate in a mineral discovery (without losing all your money a couple times first). We’re in the first or second inning of a “discover/exploration driven bull market”, and as the largest claim holder in Yukon (supported by smart people and the best geological database) Strategic will eventually perform.

Here’s a link to Strategic Metals’ most recent presentation if you want to explore it further. I’m a shareholder. I’ve been sitting on SMD for nearly 2 years now. Following my next BIG WIN, it’s definitely a place I’d consider parking more money. In my view the downside from 40-cents is minute.

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*Author has a long position in Strategic Metals

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Aurcana (AUN, TSX): Silver Property, Plant, And Equipment Priced 83% Below Cost

daniel — Mon, 26 Feb 2018 20:00:42 +0000

“Commodities Real Estate” – That’s Where The Value Is!

Residential real estate, commercial real estate – no obvious bargains there. Prices have been booming for years now. In many cities housing prices are actually well above where they were before the bust.

You want to know where you can find tremendous value in the property market?

Commodities real estate – Gold, Copper, Cobalt, Nickel, Oil – you name it. That’s where the deals are!

Where else can you buy property for half, or even 80% less than the money that’s already been put into the ground?

Take Aurcana (AUN, TSX-V), as an example.

Market cap $19 million vs. $120 million invested into property, plant, and equipment (an 83% discount?).

Call me simplistic, but that just feels like a good deal to me (and I’m normally a go with the gut kind of guy). I just can’t see AUN spending much time below 20 cents. It’s 23 cents now and definitely has multi-bagger potential.

Nearly 18,000,000 ounces of Silver in the ground that’s weighing in at +8 ounces a ton!

Given the existing infrastructure, including a mill capable of processing 1,500 tpd, Aurcana’s ounces in-the-ground should be valued higher than $1 (not to mention the desirable location, Texas).

If you wanted to reduce the cut-off grade we could be talking 40 million ounces in-the-ground (or 50 cents each).

This Shafter Property has a lot of exploration upside, too! No doubt about it. The thing is wide open at depth, and we know they’ve cut into some pretty good Gold-Silver (plus Zinc and Lead credits) 1.4 miles west of the existing resource.

Plus Oil and Gas?

Yep.

Real wild card here, get a load of this!

A few years ago Aurcana entered into a term agreement with one of the Permian Basin’s established Oil operators. They optioned 3 contiguous leases and received a cash payment of $374,469. Plus Aurcana would earn 25% of the net revenues if and when that company gets lucky.

Kevin Drover, President and CEO of Aurcana noted that “This Assignment has presented the company with the opportunity to access a potential near-term revenue stream by placing non-core assets with an established operator in the Permian Basin. It is anticipated that this transaction could assist the company financially as it focuses upon the redevelopment of the Shafter Silver Project. We intend to continue our review of SAI’s other Oil and gas holdings and may complete similar transactions if and when opportunities arise.”

The Oil company is moving toward drilling a well, from what I’ve been told. Plus, Aurcana is sitting on another 28 verified Oil and Gas leases (they received more than $100k a piece for the others).

…Oil and Gas leases are icing on the cake (any value/upside there certainly isn’t reflected in the stock price).

AUN sounds like a great deal to me – solid high-grade Silver property with existing infrastructure selling 83% below what’s already been spent on it.

I’m just not seeing opportunities like that in residential or commercial real estate. Commodities real estate is the place to be! And Aurcana provides evidence of that.

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*Author has a long position in Aurcana

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