A Golden Path As Central Banksters Are Ready To Make A Lose-Lose Decision That Comes With A Silver Lining From Doctor Copper
Part two of a two part post.
In my previous post I wrote about the calamity ensuing with the banking problems that puts the Fed in a lose-lose proposition. Which makes it wise for investors, small and big to protect themselves with their own Gold Standard that should morph into a Silver and Base Metal Standard.
There are two ways to play this, either buy the metals or buy the stocks in companies with these metals in the ground. I like bargains and the cheapest way to play this trend is with stocks of companies involved in gold, silver, copper, lithium and other metals. Mining stocks from the smallest to the biggest are currently trading close to all time lows in valuations.
Let’s get into some of the reasons to be bullish on the metals and the mining stocks from juniors, to developers and small high growth miners.
I started working in the mining business in 1993, but even before I started there wasn’t enough money being spent on exploration for new mines, or for new mines being built to replace the old mines. To this day, that really hasn’t changed, sure there has been periods of higher investment, but the success of finding new mines and building new mines has not been enough to replace the old mines.
During the gold and metals bull run from 2001 to 2011, there was a lot of consolidation in the mining sector. With the big miners buying out smaller miners and explorers. The market was on fire and they threw money around like drunken sailors and often didn’t buy wisely.
The bottom line is they basically moved reserves and resources from one entity to a bigger entity. But, bigger doesn’t mean better.
Head grades in mines have been in decline for many years, miners high-graded their mines and depleted their reserves, they are going deeper and deeper for lower grades. To make matters worse, they have gone into riskier jurisdictions.
The supply chains of gold, silver, copper and other base metals are very weak. Yet, demand for gold as central banksters and other investors are buying is very strong. Silver is no different, in fact, in addition to being a monetary metal it also has many industrial uses and is a good metal for investors to own.
To meet the demands for electic vehicles and alternative energy sources will require a lot of metals. Yet, the metals crucial for these products also have weak supply chains and ever growing demand.
Not long ago I heard Robert Friedland, make the case that we are in an era that he calls “Revenge of the miners.” Another famous mining tycoon, Ross Beaty, recently made the point that almost every metal has remarkable supply and demand fundamentals and that he has never seen that before in his career.
The big picture for me is that precious and base metals have many reasons to be bullish and that it won’t be long before big crowds of investors will come to the metals market. When they do, they will come to the mining sector and find the stocks have very cheap valuations that will create phenominal moves in many mining stocks.
A great graphic for investors in mining stocks is the Lassonde Curve which was developed by Pierre Lassonde, a true legend in the mining space. It shows a lifecycle of a mining company. Understanding where a company is on the curve is crucial to understand and a key to investors making money in the mining sector.
As you can see there are two big moves when a discovery is made, one is the discovery phase, followed by the orphan phase which is also called the development discount window and then the mining phase.
The bulk of my picks are in the pre-discovery and early in the discovery phase. I also have some that are in the transition from development to start-up phases. These are the sweet spots.
You can also make money in the development discount window, when companies are very under valued relative to the quality of their assets. But, it is harder, made easier when in the early days of a bull market for metals like the one we are in now. I prefer to spend most of my time researching and reporting on companies in the sweet spots.
Before getting into my picks I wanted to also provide the gold chart as I think it is important to understand where we are in the trend. The bulk of my bullish argument for gold and other metals is based on fundamentals of supply and demand, but following the trends helps with timing.
I follow gold so closely as it is a sentiment leader for investors in precious and base metals. Where gold goes, so goes the metals prices, and by extension so goes the metals stocks.
As you can see, in March, 2022, gold peaked then corrected down to a triple bottom in September, October and November. The main cause was strength in the USD which was driven by the Fed raising interest rates. When the Fed is raising rates it is bullish for the USD as investors buy USD to then put that into rising rates in bonds.
In early 2022, the USD started to gain strength on the anticipation the Fed would raise rates to combat inflation. As they entered into their interest rate hiking campaign the USD blasted off and at the same time gold was under pressure.
Then in September, 2022, the USD topped out and went into a steep correction that lasted until February, 2023. Gold went onto an impressive run from early November, 2022, until February, 2023. What happened in February is employment numbers came out that had traders believing that the Fed would keep aggresively raising rates.
March rolled around and everything has changed with the banking problems. I made the case in part one of this two part post of why I think the Fed is going to stop raising rates and send a message in their March 22 meeting that they are monitoring the banking sector problems very closely.
Mentioning their concerns for the banking sector in the upcoming meeting will be the catalyst for the resumption of the USD bear market that started in September and the bull market in gold that started in November.
The greatest bull market in history for gold, metals and the stocks in metals companies was from 2001 until 2011. The precursor to that was the late 1990s and the year 2000.
Back then the USD was very strong, gold and other metals were very weak and the mining stocks were trading at all-time lows in valuations. History doesn’t always repeat exactly the same but often follows a similar path. Here we are again, sentiment is low for gold and other metals, with the gold and metals stocks back at record low valuations.
The decade long bull market from 2001 until 2011 made investors tremendous gains, and we are on the verge of another multiple year bull market starting with valuations and sentiment dismal. I would argue that this time, it could be even more powerful, due to out of control debt and money printing combined with the energy transition and electric vehicle revolution, especially for the mining stocks.
Stock Picks
I’ve been putting out a lot of content for several months because I think it is a fantastic opportunity for investors that follow my work.
During this period, I’ve seen a lot of my peers pulling in their horns and not putting out a lot of content because they were feeling the pain of the poor sentiment.
I felt we were seeing opportunities with extreme low valuations that wouldn’t be around for long. I wanted to build up my sponsors and picks to be prepared for the new bull market in gold, other metals, and most importantly the stocks of companies in the metals sector.
I believe I’ve accomplished that goal and will now present my roster of picks, broken down into various themes.
Gold And Silver Miners
This group of companies are well positioned and mostly in the late stages of the development discount window and transitioning into mining startups.
i-80 Gold (IAU.T and IAUX.NYSE)
Sponsor of Rocks And Stocks News reports
i-80 Gold is a young company, only a couple years old, it is a product of the spinout of Nevada gold projects when Premier Gold was taken over. In a short period of time they have transformed the projects they had, added mining infrastructure and are in the midst of building a big mining company. They have had remarkable success at their Granite Creek project and their Ruby Hill project. At Granite Creek, they have a world-class gold deposit which is wide open, is high-grade with excellent continuity, it is open to the north and at depth. To the north is a 25 million ounce gold mine which is in the same structural corridor and in the same rocks. They started 2022 with Granite Creek as their number one project, and ended the year with Ruby Hill as their number one project. No small feet as it looks like Granite Creek is on its way to being a world-class mine. They started at Ruby Hill finding the Ruby Deeps discovery, then added the 426 Zone and other gold zones that are shaping up to be a world-class gold mine heading into late stage development. Having Granite Creek and Ruby Deeps is remarkable on their own, but in the latter part of 2022 they had tremendous success finding a bonanza-grade CRD on the Ruby Hill project. The CRD discovery has some of the highest in situ metals values of rocks being found anywhere in the world for any metals. Granite Creek, Ruby Deeps and the bonanza-grade CRD, plus their processing facilities have i-80 Gold on a growth path that looks to take them into a multiple billion dollar valuation company.
McEwen Mining (MUX on the TSE and NYSE)
The first three quarters of 2022 were a tough time for McEwen Mining, as they were having issues at their gold mines. Right near the bottom of their yearly stock chart I invited Rob McEwen on a show for an interview. I saw they had a path to turning around their gold mines by bringing down costs and having better grade control. But, I also saw their McEwen Copper subsidiary made them very undervalued. The timing was excellent because since that interview, they have been on a tremendous run. The recognition of the unlocked value of McEwen Copper has started to be recognized. It helped that they got a big investment from Nuton, which is a Rio Tinto venture. They have processing technology that has the potential to extract more copper and faster from McEwen Copper’s project. After their initial investment, they started assessing McEwen Copper’s rock and then recently made a second big investment. On the same day their second investment was announced, Stellantis, a big car maker made a huge investment in McEwen Copper. Key catalysts to drive the McEwen Mining valuation are continued improvement in their gold mines and advancing McEwen Copper.
SilverCrest Metals (SIL.T)
SilverCrest’s Las Chispas mine went into commercial production in November, 2022. In the economic evaluation of this project, which was done a couple years prior to commercial production, showed very low costs and high grades. In the early days of a new mine, they go through optimization of the mine and it takes a couple quarters of production to show the economics of the new mine. As they do that, more institutional investors will see the numbers and it creates an opportunity for retail investors to get in before the institutional investors come in. Since their economic evaluation there has been inflation, so their costs of production will likely go up, but it is starting from such a low base, even an increase of a couple dollars an ounce on their silver production will still make them one of the lowest cost producers in the sector. Inflation doesn’t affect the silver and gold grades, they are mining at a very high grade and will show in their next few quarters how lucrative their mining is at spinning out exceptional free cash flow. These are the kinds of situation that makes for peer leading performance and a stock that trades at a healthy premium compared to their peers.
Orla Mining (OLA.T)
They turned on their Camino Rojo mine in Zacatecas State, Mexico in 2022. It is an open pit oxide gold mine. They are a low cost producer of gold that generates a lot of free cash flow. In addition to expanding the mine life at Camino Rojo they also have other projects that will be future mines in their pipeline. As gold has been improving since November, 2022, their stock has been moving up in a very bullish trend. As a low cost producer with healthy margins they have the potential of outperforming their peers. Production numbers will be a primary driver of their valuation as will a stronger market for the gold price and more investors looking for low risk ways to have exposure to gold stocks. Things are shaping up for the company to have exceptional performance in 2023.
MAG Silver (MAG.T)
In the early days of production at their project just outside the city of Fresnillo, in Zacatecas, Mexico, they are showing how remarkable their mine is at generating free cash flow. Their mine is a joint venture with Fresnillo PLC., and as they were ramping up to full commercial production in 2022, MAG Silver didn’t have to send any money to the joint venture. It was generating so much free cash flow from ramp up that it paid for itself to move toward full commercial production. In early 2023, they plugged the mine into the national power grid that will have them finish ramping up to full nameplate production. As they do that, MAG Silver will become one of the lowest costs miners of silver in the entire sector. This is another story that will attract big institutions to take progresively larger positions in the stock, but it allows retail investors to get in before the big waves of institutional investors join the party.
Junior Mining Stocks
The exploration part of the mining sector is the most underloved segment of the mining industry. I would argue it is the most important as the sector needs more new discoveries that turn into future mines that replace the old mines that in some cases are ancient and in their dying days.
To meet the demands for precious and base metals, new supply is crucial and really not well understood by the investing community outside of mining stock investors. I would even add that it is not overly well understood in the mining stock investor community.
I’ve been working in the mining sector for 30 years, during my career when major mining companies came into form joint ventures with juniors the juniors would often be subject to abusive deals. The majors had the money the juniors needed and they would often get punished in joint venture deals.
The times they are a changing. Lately, I’ve seen several joint ventures formed between majors and juniors that are very junior friendly. The major mining companies are well aware of how badly they need new discoveries that have the potential to become future mines.
We are also seeing end users of metals joining the party with attractive offtake and related type deals. There is a new wave coming with majors making junior friendly deals and end users putting up money. They see the reality of how badly the mining sector needs new discoveries that turn into new mines.
As gold and other metals get stronger, I believe we are on the verge of seeing generalist investors finding their way to junior miners. When they do, they will find very cheap valuations and with their powerful buying will drive many juniors through the roof.
Nevada Exploration Picks
Paycore Minerals (CORE.V)
Sponsor of Rocks And Stocks News reports
Around 2000 metres from where i-80 Gold has a CRD with high-grade zinc, lead and silver, with an overprint of high-grade to bonanza grade gold, Paycore has found the same kind of CRD. The same corridor of structures and rocks come through Paycore’s ground for 2500 metres. Recently, i-80 Gold made an all stock deal takeover offer to Paycore Minerals to consolidate the bonanza-grade CRDs on i-80 Gold and Paycore Minerals ground near Eureka, Nevada. This CRD mining camp was an important CRD mining camp from the 1860s through to the 1960s. Then it kind of went dorment until i-80 Gold and Paycore Minerals had exceptional success and are bringing the camp back to life. Earlier, I wrote about the spectacular group of assets that i-80 Gold has, if the takeover goes through they will add another fantastic asset in Paycore Minerals’ CRD. The shareholders of Paycore Minerals will become shareholders of i-80 Gold and get exposure to a company on a tremendous growth path.
Golden Lake Exploration (GLM.CSE)
Sponsor of Rocks And Stocks News reports, and Allan Barry Laboucan is an advisor to the company
Golden Lake is right beside Paycore Minerals, and they have also drilled into a CRD with high-grade zinc, lead, silver and an overprint of high-grade to bonanza-grade gold. There is multiple historical CRD mines on their ground. In January, 2023 they announced extensive surface sampling news with impressive grades of CRD metals and gold mineralization showing the realistic potential to find additional CRD’s with high-grade zinc, lead, silver and overprinting high-grade to bonanza-grade gold. They are a few months away from drilling, they have an extremely low valuation and catalysts to change that dramatically as they get drilling to expand on the known bonanza-grade CRD they have and look for more.
Timberline Resources (TBR.V)
Sponsor of Rocks And Stocks News reports
Timberline Resources has the largest land package in the Eureka mining camp. They have a growing gold resource at their Lookout Mountain project. To the immediate east of the gold resource is a very large geophysical anomaly. The rocks, structures and gold mineralization are pointing toward that geophysical anomaly being the source of where the gold resource comes from. In February, 2023, Timberline reported excellent surface sampling results from their project in close proximity to Paycore and i-80 Gold’s CRDs. It is called New York Canyon, this project was a location of significant historical CRD mining. Considering the surface sampling results, and the historical CRD mining, I think there is an outstanding potential that Timberline can make important CRD discoveries near i-80 Gold and Paycore Minerals. I’m very much looking forward to their drilling at New York Canyon and at the geophysical anomaly near their expanding gold resource. They are gearing up for drilling at their key projects in Eureka, Nevada and have a very cheap valuation with the catalysts to unlock substantial shareholder value.
Walker River Resources (WRR.V)
Sponsor of Rocks And Stocks News reports
Walker River Resources is in the Walker Lane Trend of western Nevada. At their Lapon Canyon project they have found an area of widespread high-grade gold distribution. It covers an area of approximately 600 metres wide on the Lapon Mountain from side to side and over 800 metres from top to bottom. There is a network of faults and large areas of alteration associated with the widespread high-grade gold mineralization that suggests they have a very big and powerful gold mineralizing system. Based on the drilling at the Lapon Canyon project, the historical mining, the network of structures, large alteration areas and widespread gold mineralization it is easy for me to see that they have a 2-5 million ounce gold target on their hands in Nevada. Those are not easy to find.
Blackrock Silver (BRC.V)
Sponsor of Rocks And Stocks News reports
Blackrock Silver has a great group of assets to drive them forward to a much higher valuation. At Tonopah, Nevada, they have reported a maiden resource of high-grade silver and gold that is similar in size and grade to the maiden resource of SilverCrest’s Las Chispas mine. They have basically doubled the resource footprint since the maiden resource. At the end of the day, it looks like they could have as important a mine of the future as SilverCrest’s Las Chispas mine. In addition, at their Silver Cloud project, in late 2022, they announced hitting a bonanza-grade gold and silver discovery in an epithermal vein. This is a major milestone of the exploration of an epithermal vein because they have tagged the boiling zone. Now they know where to go to expand and grow the discovery. This gives them a second project to drill for high-grade to bonanza-grade silver and gold. In addition to precious metals they are also involved with an impressive new discovery of lithium in Nevada near a very big lithium project which also shows the potential to be big as well. Collectively, the company has plenty of catalysts to unlock shareholder value.
Athena Gold (ATHA.CSE)
Sponsor of Rocks And Stocks News reports
Athena Gold is in the Walker Lane Trend of western Nevada, around 50 miles north of the Bullfrog district. AngloGold Ashanti has planted their flag in the Bullfrog district and one of their key assets is the Silicon project where they have a 4 million ounce resource of oxide gold. Athena has drilled into what looks like an exceptional new discovery of oxide gold in Nevada with three holes. For an oxide gold project it has an exceptionally high-grade with the room based on structures and a large alteration zone to get much bigger.
Masivo Silver (MASS.V)
Sponsor of Rocks And Stocks News reports
Masivo Silver has a Nevada project that saw high-grade mining back around WWII. The company’s geologists felt that the limited drilling since historical mining was at the wrong angle. They drilled under the old mine workings with angled holes to test if the mineralizatios continued underneath. Their first hole showed the mineralization continues at depth and that they have the angle correct. They recently announced the assays from their first hole and it returned excellent grades of copper-gold-silver. They have more holes pending from this early stage exploration project.
Orogenic Gold Explorers
I’m a big fan of orogenic gold discoveries because as can be seen at the Fosterville mine in Austalia when a company finds and mines an orogenic zone like the Swan Zone it has very low costs and extreme high-grade. It was a company maker for an already sizable company, Kirkland Lake, the Swan Zone made them one of the lowest cost gold miners in the sector, that was one of the best performing gold mining stocks before it was bought out and was a huge winner for shareholders.
Sokoman Minerals (SIC.V)
Sponsor of Rocks And Stocks News reports
Sokoman has been drilling into an orogenic gold system with fairly shallow holes for a few years. Then in September, 2022, they announced the results of drilling their deepest hole into the orogenic gold system and hit a spectacular hole that looks like they tagged the top of a Swan Zone. They hit 3 metres of 102 g/t gold that was part of a 10 metres intersection of 42 g/t gold. The company calls it the 463 Zone, it truly is a jewellery box hit like the Swan Zone at Fosterville. Another reason it looks like the Swan Zone is they have the Eastern Trend and the 463 Zones comes up at a different angle and where those two zones meet is where they hit the bonanza-grades. Two zones coming up at different angles is exactly like the Swan Zone. After that they hit the 463 Zone, they have drilled two more holes to further expand the 463 Zone. Things are shaping up for them to have plenty of exceptional drilling results from the 463 Zone. They are at an important juncture for the exploration of an orogenic gold system and it looks like they have a company maker of a zone on their hands. In addition, on another project they have the makings of an outstanding lithium discovery. The combination of drilling at the 463 Zone and more drilling at their lithium discovery, gives them an excellent chance for explosive moves to the upside.
Galantas Gold (GAL.V)
Sponsor of Rocks And Stocks News reports
Galantas Gold has an exciting orogenic gold discovery on their hands in Northern Ireland. They have been drilling the Jashua and Kearney zones which also have other zones in close proximity. The various veins are tightly packed in close proximity, with the potential to come together at the depth with a crustal structure very close to the immediate south. Orogenic gold systems are associated with deep structures that are the deep cracks in the earth that allow the high-grade fluids to make their way closer to surface. They have what looks like the plumbing system and lots of high-grade gold in the zones as well as a network of dilation zones. The zones, high-grade gold and dilations zones are important guides to follow the system deeper. As they do that, it looks like the various zones will come together at depth and the source will be the structure to the immediate south of the high-grade gold zones. They are also at an important juncture for the exploration of an orogenic gold system that looks to have rich rock waiting for them as they drill deeper into the system.
Dynasty Gold (DYG.V)
Sponsor of Rocks And Stocks News reports
They are a brand new player in the orogenic gold discovery arena. Their project is in Dryden, Ontario, near a road to Dryden. In January, 2023, they announced a remarkable series of three holes into an orogenic gold system. One hole hit 1.5m of 246 g/t gold, which was part of a 3 m hit of 151 g/t. Usually in orogenic gold systems you need to go deep to reach the depths close to where the heat is great enough to create these bonanza grade hits. What makes Dynasty Gold’s Thundercloud project impressive is they are hitting the high-grade to bonanza-grade in the first couple hundred metres from the surface. They have 4 holes with the high-grade to bonanza-grade gold lining up for excellent continuity. Below that they have a second zone with one hole into it that returned high-grade gold as well. It clearly looks like they have two high-grade to bonanza-grade gold zones, near surface and wide open at depth. Things are lining up in a very impressive way for this new orogenic gold discovery at Thundercloud.
Amex Exploration (AMX.V)
Amex has a remarkably good orogenic gold system in Quebec. Their High Grade Zone has outstanding high-grade gold continuity that starts at the surface and continues below 1000 metres and remains wide open at depth. At the Red Lake Mine, they had to get down to the 1000 metre level where they started hitting the bonanza-grade rock which continued for another 1000 metres. That bonanza-grade rock at depth made Goldcorp one of the lowest cost gold miners in the business with high margins due to the bonanza-grade gold. In addition to their High Grade Zone, they have found other high-grade zones in close proximity. These various high-grade zones are so tightly packed that it is likely they come together at depth. To the north and south they have key faults and as they go to the east they come together. These deep cracks in the earth are important features in an orogenic gold system as they are the path of least resistance that the high-grade fluids follow from great depths. It looks like the Perron fault to the south of the high-grade zones is the likely source of the gold mineralization, but where the Perron and Normetal faults pinch together to the east is also a high potential source of the high-grade gold mineralization as well. The bottom line is they have an orogenic gold system that looks to have a certain future of becoming a high-grade gold mine owned by a much larger company.
Base Metal Stock
Nine Mile Metals (NINE.CSE)
Sponsor of Rocks And Stocks News reports
Nine Mile Metals is focused on the Bathurst Mining Camp (BMC) in New Brunswick, Canada. This is truly elephant country for volcanogenic massive sulphide (VMS) deposits as it is one of top three VMS camps worldwide. They have found two new massive sulphide occurances with exceptional grades at or near the surface. They are 20 km apart and the sources of the massive sulphide occurances remain open for discovery. At their Nine Mile Brook lense, it is thick and very high-grade and as of February, 2023 they are drilling around it to find the source. Due to the thickness of this lense that comes right to surface, and the grade, it is an indication the source of the system should be big and high-grade. A similar story is emerging at the California Lake discovery, where they found massive sulphides in the near surface drilling and the source remains open for discovery. This is one of those exploration stories where a junior goes into a well known camp that saw its hayday many years ago, applies new exploration tools and finds something special.
Mexico
Advance Lithium (AALI.V)
Sponsor of Rocks And Stocks News reports, Allan Barry Laboucan is the President/CEO of Advance Lithium and a big shareholder
Advance Lithium has 13 salars/salt lakes in central Mexico, that have lithium, potassium and boron. In March, 2023, Advance Lithium announced they have entered into discussion with the Mexican national lithium company, LitioMx, to talk about creating a joint venture. Mexico is getting a lot of attention recently due to announcements by Tesla and BMW to create battery manufacturing plants in Mexico. The BMW plant is in close proximity to Advance Lithium’s salars in the state of San Luis Potosi, Mexico. In addition, the company also has a 100% interest in over 50 square kilometres of ground at its Sarape project near SilverCrest’s new mine Las Chispas. To the south of Las Chispas is First Majestic’s Ermitano mine. Las Chispas and Ermitano are low cost, high-grade silver and gold mines. Las Chispas, Ermitano and Sarape are all epithermal vein projects. At Sarape there are two known epithermal veins, the Sarape vein which is 5 km, and the Chiltepan vein which is 2 km. Both the Sarape vein and Chiltepan vein have seen limited drilling, with the grades encountered in drilling similar to the grades in surface sampling. The gold and silver mineralization at the veins are widespread in many surface outcrops along strike of both veins and the company feels the potential to find the boiling zones of the veins haven’t been encountered in the limited drilling. In March, 2023, Advance Lithium announced a deal to acquire a large land package in the Bathurst Mining Camp (BMC) of New Brunswick, Canada from Wolfden Resources. BMC is one of the most important VMS mining camps in the world, that saw its mining days several decades ago. Like many old mining camps, they are being revived with modern exploration techniques that weren’t available when they were explored many decades ago. This kind of story often leads to important new mine discoveries. In addition to the VMS potential, there is also exceptional epithermal vein potential. Wolfden Resources found the boiling zones of epithermal veins that returned exceptional silver grades at the California Lake claim block, they remain wide open for exploration. Brunswick 6 and Brunswick 12 were exceptional VMS mines, with Brunswick 12 being one of the most important VMS mines worldwide. As part of the deal with Wolfden, Advance Lithium picked up a large land package in close proximity to the Brunswick 6 and Brunswick 12 mines. Tough markets often make for good deals, the past year has been challenging for juniors. Advance Lithium was able to pick up the Sarape gold and silver project and the BMC project to compliment its lithium projects. Collectively this makes for an outstanding group of projects in gold, silver, lithium and VMS, with large land packages, yet the company has a tiny valuation.
Diamonds
Arctic Star Exploration (ADD.V)
Sponsor of Rocks And Stocks News reports
Diamond exploration and mining could be the top contrary play in the mining sector. The prices of diamonds are at all-time highs, yet the stocks in diamond companies are getting no love. In the case of Arctic Star, they have a large land package in close proximity to the Ekati and Diavik diamond mines. They have found new kimberlite occurances with promising diamond distribution curves and diamond indicator minerals that suggest they should find high-quality big diamonds. In a more bullish market for diamond stocks they would have a valuation several multiples of their current valuation. As they do more work to assess the potential of their diamond bearing kimberlites they have the realistic potential to unlock substantial shareholder value.
A High Growth Royalty Company
Orogen Royalties (OGN.V)
In the 1990s, one of the best performing gold stocks was a royalty company, Franco Nevada. Their business model was pretty straight forward, they had a low cost of operating as they let other companies build and operate mines while they sat back and collected royalty payments. Orogen Royalties transitioned in 2022 from a company that had royalties in several potential mines, to having their first cash generating royalty. They hold a 2% royalty on the Ermitano mine in Sonora, Mexico that was optioned to First Majestic that found and built the mine. At Ermitano they are doing the work to increase proven and probable reserves to add to the mine life. Based on that work, it looks like the Ermitano mine will be sending royalties to Orogen for many years into the future. They also have another flagship asset at the Silicon project in Nevada where they have a 1% royalty. That one is being explored and surely will be a development project being advanced by AngloGold Ashanti. The resource is over 4 million ounces of oxide gold that is being aggresively drilled and on its way to having economic studies done on it. In addition to the central Silicon resource, to its south AngloGold Ashanti is drilling aggresively into the Merlin zone which is also part of the project that Orogen holds a 1% royalty. To compliment their flagship royalties at Ermitano and Silicon, they have a pipeline of many other projects with the potential to become future cash generating royalties. They are at a crucial juncture for a royalty company as they now have a cash flowing royalty that is adding to their cash position and plenty of other assets to keep this trend going well into the future.
December, 2022 Tax Loss Selling Season Picks
Every year, at the end of the year, plenty of mining stocks go on sale not for fundamental reasons, instead it is due to investors locking in losses for tax purposes. In 2022, we picked a group of companies that were oversold and had the potential of excellent performance in the first couple months of 2023 and then their fundamentals drive them to having excellent years in 2023.
Blackrock Silver (BRC.V)
Sponsor of the Rocks And Stocks News reports.
Earlier I wrote about Blackrock Silver, please see that to learn more about their outstanding projects.
HighGold Mining (HIGH.V)
They have a resource of over 1 million ounces of gold with around an average grade of 10 g/t gold at their Johnson Tract project in Alaska. Based on their drilling, it clearly looks like a 2-5 million ounce target. HighGold is a deep value gold play, that is currently in the process of spinning out its non-core assets into a new public company. After the spinout, they will be focused solely on their Alaska project.
Firefox Gold (FFOX.V)
Finland is an exciting gold camp that has had recent success on several fronts with companies making important orogenic gold discoveries. Firefox has a large land package, in close proximity to all the big discoveries being made in this emerging gold mining camp. They have also reported excellent drill results and look like they are onto important new discoveries of their own. Despite being so well positioned, and having outstanding drilling results, they currently have the lowest valuation of all the players in the camp.
Amex Exploration (AME.V)
I wrote about Amex earlier in the report, please see above for more on Amex Exploration.
Bell Copper (BCU.V)
They are in Arizona which is well known for extremely big copper deposits. They are currently drilling for a big one of their own. Past drilling looks to have clipped the edge of a very big target and now they are drilling into the heart of the target. If they hit, and I like their chances, the stock will trade at multiples of its current valuation.
Grande Portage (GPG.V)
They are in Alaska, and have found a 1.5 million ounce gold resource with an average grade over 10 g/t gold. These are not easy to find in the gold exploration sector, and it is open to grow. I’m looking forward to their next drilling campaign which will start in a few months.
New Picks
While gold and metals stocks were going through a tough February, 2023, I was able to find a group of excellent picks to add to the report. Below are the list of companies added.
Faraday Copper (FDY.V) has been reporting excellent copper results from drilling and recently closed a big financing. Now they are cashed up, drilling and look to have excellent news flow upcoming. They have an exceptional copper project in Arizona that looks like it will surely become a future mine. I doubt they will be the ones to mine it and are an excellent takeover candidate.
Relevant Gold (RGC.CSE) has what looks like an impressive new orogenic gold discovery in Wyoming. In their near surface drilling they have tagged bonanza-grade gold which is an important development in these kinds of gold systems.
Golden Ridge Resources (GLDN.V) has a tiny valuation, but have recently completed drilling near New Found Gold’s big discovery. Their first hole recently reported, returned high-grade gold. What I found impressive is that the project has similar gold occurances to what led to New Found Gold’s discovery. I like their chances to grow into a company with a much bigger valuation.
Emergent Metals (EMR.V) has an interesting project in Quebec where they hit visible gold in their recent drilling. Assay results are pending.
Summa Silver (SSVR.V) is hitting very high-grade silver in New Mexico that is shaping up to drive their valuation much higher.
Masivo Silver (MASS.V)
Sponsor of the Rocks And Stocks News reports.
I wrote about them earlier in the report, please see above to learn more.
New Pick
On February 17/2023 we added a new pick to the reports.
Barksdale Resources (BRO.V) has the claims right beside the Hermosa Project that bought out Arizona Mining for CAD $2 billion for the Taylor CRD. That Taylor deposit sits right on the border of the claims and it looks like Barksdale Resources has a good portion of it on their claims. They have been going through the drill permitting which should be completed in the next couple months. If they weren’t awaiting drill permits, I highly doubt investors would have the opportunity to buy it at its current modest valuation. When they start drilling that will all change, as they are beside a worldclass mine with past drilling that shows the Taylor CRD continues onto their ground.
In closing
As always, my reports are for information purposes only, they are not investment advice, it is important for you to speak with your financial advisors to determine if the companies I report on are suitable for you.
I’m also a big promoter of investors doing their homework, I’ve done interviews with management of most of the companies I follow. You can find those interviews on my Youtube Channel, search for Rocks And Stocks News, which is a good place to start your homework. The websites of the companies I follow have plenty of information in their news releases and corporate presentations to do additional homework.
Ultimately, well informed shareholders that understand the companies they invest in, and have reasonable time frames for companies to reach their success, are prone to make logical investment decisions not emotional ones. This is a recipe for success investing in any sector.
All the best,
Allan Barry Laboucan
Serendipitous sense of timing!