Junior Resource Monthly March 2021
PREMIUM CONTENT FOR PAID MEMBERS ONLY
The new wave of speculative assets — think NFTs and cryptos with puppy names — along with a consistent wave of rising real rates continues to keep the gold price in consolidation mode.
Coinbase, the platform that facilitates the buying and selling of cryptos, is set to IPO in April 2021.
The market is assigning a valuation of nearly 53 times 2020 revenue.
Companies on major exchanges like GameStop are trading like a junior with 30%-50% moves now becoming common.
Reddit, the platform that has facilitated the extreme price action on chosen stocks, is also going public.
Stimulus checks are hitting bank accounts, the vaccination rollout continues to pick up steam, and it appears we are as close to a new normal here in the U.S. as we have been in over a year.
Even central banks are wanting in on the action, as calls to regulate cryptos are gaining momentum, which is exactly what happens when the government recognizes capital pivoting into a space it cannot manipulate.
How much of a threat do alternative assets present to governments accustomed to controlling the printing press that creates magic money for corporations and banks?
So much so that billionaire investor Ray Dalio, the founder of the $150 billion hedge fund Bridgewater Associates — the world’s largest — says there’s a good probability Bitcoin could be outlawed.
Think it can’t happen? It has. With gold in 1934. The reasoning then is similar to the case that Dalio makes for the outlawing of Bitcoin.
As Dalio explained, the Gold Reserve Act of 1934 made it illegal for individuals to own gold “because government leaders didn’t want gold to compete with money and credit as a storehold of wealth.”
We are in the midst of one of the most interesting (that’s my nice word) monetary experiments I’ve ever seen. How I feel about the spending, how it’s allocated, etc doesn’t matter.
What matters is that this debt jubilee is extremely bullish for commodities, including gold, so if it takes another month or two before the next rally in the precious metals and the junior resource space then so be it. I’m more focused on making sure the companies I buy are adding value than I am share price.
Value with the drill bit, value via economic studies, value via acquisitions, and on that front the portfolio, has had a heck of a month with discoveries from Gold Bull Resources, Nevada Sunrise Gold, and Mawson among others.
1 in 9 Americans remain unemployed with the economy approximately 70% open.
Despite higher copper, lumber, and oil prices — the things we need to build out our infrastructure — Fed Chair Jerome Powell continues to insist that inflation is transitory and under control. He also insists the Fed isn’t raising rates until at least 2023.
The Biden administration is preparing a $3 trillion infrastructure bill that also aims to address climate change. For those of you keeping track, total U.S. debt is on a clear path towards $30 trillion.
The result has been a rise in rates in government and corporate bonds. The rise in borrowing costs has led to over $740 billion of notes across currencies this year. The most ever.
Like Nick Hodge likes to say, forever is a long time.
That’s also why I continue to write checks and add to my precious metals positions.
When will gold’s consolidation end? I don’t know, but I suspect we are close and I can’t stress enough the importance of using consolidations to your advantage.
The same price movement we’ve seen in the uranium juniors is coming to gold juniors. You’re either going to make money off it or you’re not.
Lots of news to get into so let’s get to it.
Gold Bull Resources (TSX-V: GBRC) (OTC: BLSSF)
When Gold Bull CEO Cherie Leeden told me she planned on taking the resource base from 500,000 gold ounces to 5 million by the end of this year I asked how.
Her answer? Drilling and acquisitions. As ambitious as the plan seems I believe her and it’s why I recommended the company. If the first hole at the Sandman gold project in Nevada is any indication, Gold Bull may turn out to have one of the better 2021s in the gold space.
On March 22, 2021, the company announced assay results for the first hole drilled in 2021 and they were nothing short of spectacular.
- Drill hole SA0001 intersected 144.8 meters at 1.67g/t gold from 65.5 meters including:
- 6.1 meters at 10.75g/t gold from 143.3 meters
- 97.5 meters gold at 2.23g/t gold from 96 meters.
Gold mineralization remains open at depth and, importantly, mineralization appears almost entirely oxidized.
Drilling at Sandman is ongoing and by the time you read this we’ll likely have another batch of assays to look over.
I spoke with Cherie about the excellent start to the program.
You can and should listen to that here.
Gold Bull is just under the buy-up-to price and is a strong buy. I’d get that done.
Mawson Gold (TSX-V: MAW) (OTC: MWSNF)
Mawson is on to another significant discovery — this one in Australia — while it drills away and continues to add ounces in Finland.
On March 22, 2021, Mawson announced assay results from two further drill holes (MDDSC011-12) and multi-element data for remaining holes drilled by Mawson from the 100%-owned Sunday Creek project in the Victorian Goldfields of Australia.
Diamond drillhole MDDSC0012, the deepest hole and Mawson's best drill result to date at Sunday Creek, returned 36.4 meters at 2.4g/t gold and 0.4% antimony from 177 meters.
CEO Michael Hudson said:
“Sunday Creek is shaping up as one of the best discoveries to emerge from the new wave of gold exploration in Victoria, with this new drilling delivering our best and deepest result from the project. Impressively, we see a broad zone of mineralization (36.4 metres @ 2.4 g/t Au and 0.4% Sb) that includes multiple high grade sheeted veins including 0.2 metres @ 37.3 g/t Au and 12.0% Sb and 2.2 metres @ 15.8 g/t Au and 3.3% Sb. MDDSC012 is the first drill hole to test beneath old mine workings, and demonstrates that high-grades continue to depth. Drilling continues with the company looking to bring in extra drill capacity. As we continue to extend the system in all directions, the chance to find further high-grade blowouts at Sunday Creek remains an exciting opportunity.”
It is clear that Sunday Creek is emerging into an important project for Mawson and continued success might lead to a spinout of the Australian assets.
Mawson has now drilled strong gold results from multiple sheeted vein structures within a 200-metre by 150-metre area with over 500 metres strike to test between historic mines, before drilling will step out to test the broader 11-kilometer historic mine trend.
I spoke with Mike about the excellent results, drilling in Finland, and why Mawson is a bargain at current levels.
You can and should listen to that here.
As if there wasn’t enough going on with Mawson, the other Michael Hudson-led company, Hannan Metals, is on to a new discovery of its own in Peru.
Hannan Metals (TSX-V:HAN) (OTC PINK: HANNF)
On March 9, 2021, Hannan announced assay results from the first outcrop copper-silver discoveries from the Tabalosos project held within the San Martin JOGMEC JV sediment-hosted copper-silver project in Peru.
Highlights from the release:
- First high grade copper-silver outcrop discoveries from the Tabalosos project held within the San Martin JOGMEC JV sediment-hosted copper-silver project in Peru. Outcrops have been delineated in two areas: Zona Este and Zona Sur that strike over a combined 2.5 kilometres. The discoveries were made by following up mineralized float samples in creeks found in 2019 by Hannan
- Zona Sur consists of twelve channel-sampled outcrops over 500 metres of strike. Additional systematic sampling is required to determine the full width of mineralization. Best channel results include:
- 2.0 metres @ 4.9% copper and 62 g/t silver (partially sampled);
- 6.2 metres @ 0.8% copper and 19 g/t silver (full sample);
- including 1.3 metres @ 3.5% copper and 86 g/t silver;
- 0.4 metres @ 6.3% copper, 152 g/t silver (partially sampled);
- 0.4 metres @ 7.2% copper, 163 g/t silver (partially sampled);
- Zona Este consists of four channel-sampled outcrops within an area of 80 metres by 120 metres. Additional systematic sampling is required to determine the full width of mineralization. Best channel results include (Figure 3):
- 1.0 metre @ 6.3% copper and 101 g/t silver (partially sampled);
- 1.8 metres @ 3.7% copper and 42 g/t silver (partially sampled);
- including 1.2 metres @ 5.4% copper and 62 g/t silver
- 2.2 metres @ 2.4% copper and 29 g/t silver (full sample);
- including 0.7 metres @ 5.9% copper and 70 g/t silver
Michael Hudson commented:
“San Martin continues to deliver high grade copper and silver at scale. These are the first high outcrop discoveries found by our team at Tabalosos, by undertaking good prospecting and geological work. Given the challenges in making surface discoveries with the predominant soil and colluvial cover, teams are now in the field collecting detailed and systematic soil samples to map and infill the mineralized horizon between outcrops over multiple kilometres.”
That news followed news earlier in the month where Hannan outlined assay results from the first outcrop copper-silver discoveries from the Tabalosos project held within the San Martin JOGMEC JV sediment-hosted copper-silver project in Peru.
Hannan is a strong buy at current levels.
I spoke with Mike about the most recent discoveries. I’m confident they won’t be the last.
You can listen to that here and here.
Revival Gold (TSX-V: RVG) (OTCQB: RVLGF)
Revival has a resource base that consists of three million gold ounces, a path towards a production decision in 2022, and a lot of exploration upside it’s looking to unlock.
On March 22, 2021, the company announced plans for a 2021 field program for the past-producing Beartrack-Arnett Gold project.
Highlights include 5,000 meters of exploration, infill, and engineering drilling. Drilling will start in May on the Joss high-grade target. A second rig is expected to start drilling in June on the Haidee oxide target.
In addition to the drilling, Revival has also commissioned multiple firms to carry out studies designed to bring Revival closer to a production decision in 2022. A point that CEO Hugh Agro made several times in the release.
I spoke with CEO Hugh Agro about the multi-pronged approach, the value at Beartrack-Arnett, and the importance of the flexibility that a heap leach production scenario offers.
You can listen to that here.
Revival has an excellent technical team and has added significant value by the recognition of a high-grade core of gold mineralization at
Beartrack-Arnett. I spoke with Hugh earlier in the month on the development.
You can listen to that here.
Revival Gold is a buy at current levels.
Uranium Energy Corp. (NYSE: UEC)
Uranium Energy Corp just raised US$30.5 million and announced its plans to establish a physical uranium inventory.
UEC's physical uranium initiative is fully funded with cash on hand and now includes 1.4 million pounds of U.S.-warehoused uranium with one million pounds delivered by May 2021 and another 400,000 pounds delivered by March 2022.
The strategy is one several uranium companies are employing while the utilities make up their mind on when they want to step back into the market and secure future supply.
UEC is now in the enviable position of having a robust balance sheet of $65.8 million in cash and equity holdings.
Its 19.5% equity stake in Uranium Royalty Corp. (URC: TSX-V) increased to $34.3 million following URC's announced acquisition of royalties on the world-class MacArthur River and Cigar Lake uranium mines.
CEO Amir Adnani has done a brilliant job executing and with the bull market in uranium just getting going I suspect there are several catalysts in the works that along with improved market sentiment should send shares higher.
Skyharbour Resources Ltd. (TSX-V: SYH) (OTCQB: SYHBF)
Skyharbour has also surged higher but also has a lot of runway.
On March 17, 2021, the company announced that mobilization has begun for its 2021 geophysical and diamond drilling programs at its flagship 35,705-hectare Moore Uranium Project.
The company has planned a 9km Small Moving Loop EM (SML-EM) geophysical program to refine additional drill targets and has begun mobilization of drilling equipment for a subsequent 3,000-metre diamond drilling program consisting of 10 to 12 drill holes.
The fully-funded and permitted programs will focus on following up on existing unconformity and basement-hosted targets along the high-grade Maverick structural corridor as well as identifying new targets at the Grid Nineteen area.
Jordan Trimble, president and CEO of Skyharbour Resources, echoed the bullish sentiment in the uranium space:
“We have been very pleased with the results to date at the Maverick East Zone, and we will continue to focus on the expansion of this high grade mineralized zone. The uranium mineralization identified during previous drill programs illustrates the strong discovery potential at Moore and recent geophysical programs and new geological modeling have encouraged the Company to develop new regional drill targets in areas such as Grid Nineteen. Outside of our Moore Project, Skyharbour’s partner companies have been advancing some of our other projects. Azincourt is currently conducting a minimum 2,000 metre diamond drilling program at the East Preston Project and at our Hook Lake Project (previously called North Falcon Point), Valor Resources has begun planning for their upcoming exploration programs including airborne geophysics and ground-based exploration in the summer. The uranium market has shown notable signs of recovery with increasing equity valuations and improving sentiment, and this recovery appears to be accelerating.”
I caught up with Jordan about the recent surge in share price, the exploration program, and the improved outlook in the uranium space.
You can listen to that here.
Probe Metals (TSX-V: PRB) (OTCQB: PROBF)
As with Mawson, Chakana, and Gold Bull among others, Probe continues to hit with the drill bit.
On March 9, 2021, Probe announced additional results from the 2020 drill program on its 100%-owned Val-d’Or East Pascalis property located near Val-d’Or, Quebec.
Results from seventy-one (71) drill holes have been successful in confirming continuity of gold zones with infill drilling and expanding near-surface gold mineralisation at both the New Beliveau and North deposits.
Highlights from the release:
- Infill drilling continues to show good continuity in mineralisation with results grading up to 11 g/t gold over 7.2 meters and 136 g/t gold over 1 meter.
- Near-surface expansion drilling at New Beliveau returned 56.1 g/t gold over 1.1 meters, 8.2 g/t Au over 3 meters and 7.8 g/t Au over 3 meters.
- Near-surface expansion drilling at North Zone returned 96.6 g/t gold over 0.5 meter, 15.5 g/t gold over 1 meter and 1.5 g/t gold over 13 meters.
- All of these results will be included in the upcoming resource estimate expected in Q2-2021 which along with drill results is the next major catalyst.
David Palmer, president and CEO of Probe, said:
“The results of the 2020 drill program along the Pascalis Trend have improved our understanding of these deposits greatly as they advance into the preliminary economic assessment. It is very encouraging to see the continued success of both the infill and the expansion programs along the original gold trend of the Val-d’Or East project. Although it has grown significantly, we continue to be impressed with the potential for further expansion and exploration remains a fundamental part of the story as we advance into economic studies.”
The pullback in Probe the past few months provides an excellent entry point. Do not be surprised if the company is taken out at much higher prices.
Nevada Sunrise Gold (TSX-V: NEV) (OTC: NVSGF)
You all know how bullish I am on Nevada Sunrise and the Kinsley Mountain gold project, which Nevada Sunrise owns a 20% interest in.
I not only like the potential for extensions at the Western Flank Zone but I also believe there is a very good chance at new oxide and high-grade sulfide discoveries elsewhere on the property.
The recent set of results — which are finally coming in — hit 15.1 g/t gold over 7.6 meters and 9.8 g/t gold over 6.1 meters.
Two areas failed to yield significant results but that is to be expected as the program was essentially blind drilling due to delays in the lab.
“The latest round of drill results continues to support the potential growth of gold resources at Kinsley Mountain,” said Warren Stanyer, president and CEO of Nevada Sunrise. “With many more holes to be released, we are very pleased with the outcomes to date as this exploration story unfolds.”
I anticipate by the time you read this there will be another round or two of results.
I spoke with New Placer Dome Gold — who has a right to earn-into 80% of Kinsley — about the results.
It’s a worthwhile listen on Kinsley. You can listen to that here.
While Kinsley is where the bulk of the newsflow will come from there are several other catalysts that could have a significant impact to the share price.
Nevada Sunrise has very strategic water rights in Nevada. Water rights that I believe are worth millions and that several companies in the basin need if they are to ever successfully mine the lithium that’s been discovered there.
Nevada Sunrise is a strong buy at these levels.
Ethos Gold (TSX-V: ECC)(OTC: ETHOF)
Short and to the point. Ethos Gold will have one of the better 2021s of any junior company in the space. Shares are an absolute gift at these levels.
I spoke with President Alex Heath about upcoming drilling at the Perk-Rocky Copper project and the multiple district-scale land packages Ethos has managed to put together.
You can listen to that here.
Ethos is a strong buy at current levels.
Leading Edge Materials (TSX-V: LEM) (OTC: LEMIF)
Leading Edge is close — weeks I believe — to releasing long awaited results from economic studies on its Woxna graphite mine and Norra Karr heavy rare earth project, both in Sweden.
Leading Edge is one of my favorite ways to play the critical metals space as it relates to the juniors.
CEO Filip Kozlowski does an excellent job of explaining the many catalysts for the company and why it has a significant edge (pun intended) over its junior competitors.
You can read that here.
K2 Gold Corporation (TSX-V: KTO) (OTCQB: KTGDF)
K2 Gold recently announced that its wholly-owned subsidiary, Mojave Precious Metals, has received a positive decision letter from the United States Department of the Interior, Bureau of Land Management ("BLM") at its 100%-owned Mojave project.
The market received the news well. What the market really wants — and I believe we will get — is the final permit to drill the very prospective and exciting gold project.
John Robins, chairman, stated:
“We are extremely pleased to have achieved this important permitting milestone for Mojave's second phase drilling program. We look forward to methodically advancing this highly prospective project and building upon last year's successful program.”
K2 is proposing the establishment of 30 drill pads for up to 120 holes to support exploration in three key mineral zones.
The stock has pulled back after flirting with the C$1.00 level earlier this year and is a strong buy at these levels.
Chakana Copper (TSX-V: PERU) (OTCQB: CHKKF)
If you like copper and you like gold and you like silver you have to like and own Chakana Copper.
The most recent bit of news from Chakana came on March 24, 2021 when it announced the discovery of a second high-grade breccia pipe within the Huancarama Breccia Complex at the Soledad Project in Ancash, Peru.
This new high-grade breccia pipe (Huancarama West) is located approximately 75m west of the previously announced Huancarama East discovery. Results included an 11-meter intercept of 6.29g/t gold and 92.8g/t silver (7.66 gold equivalent). Mineralization starts at 14 meters below surface.
David Kelley, president and CEO, commented:
“The discovery of a second high-grade tourmaline breccia pipe within the Huancarama Breccia Complex is an exciting development for the project. The drill rig was set up 50m north of the H5 breccia in an area with andesitic tuff exposed at surface. High-grade gold and silver mineralization was encountered about 3m below surface, demonstrating the significant potential of near-surface mineralization at Soledad. The precious metal-rich nature of the mineralization may be related to oxidation but also primary zonation. Often breccias at Soledad become strongly mineralized at depth with copper in addition to precious metals.”
I spoke with CEO David Kelley about the exciting discovery, the pace of drilling, and when to expect the maiden resource estimate.
You can listen to that here.
Last but not least, Azucar Minerals (TSX-V: AMZ) (OTCQX: AXDDF).
Azucar has been quiet due to a combination of factors but appears to be back at it doing what it does best: exploring.
On March 18, 2021, the company announced results from drilling at the Porvenir Zone at the El Cobre porphyry copper-gold project in Veracruz State, Mexico.
The El Cobre project covers a large area of porphyry-style alteration with numerous zones of copper-gold mineralization identified by past work.
The headline number was a modest 43.55-meter intercept of 0.37 g/t gold and 0.21% copper.
The now-complete additional drilling carried out at Porvenir helps define the geologic boundaries and distribution of copper and gold in this zone for geologic modelling.
While the Norte Zone alone justified a larger market cap with its Indicated resource containing 748,000 ounces of gold and 221 million pounds of copper (47.2 million tonnes grading 0.49 g/t Au, 0.21% Cu 1.4 g/t Ag) and an inferred resource containing 860,000 ounces of gold and 254 million pounds of copper (64.2 million tonnes grading 0.42 g/t Au, 0.18% Cu and 1.3 g/t Ag), the real prize will be the discovery of the feeder zones at depth.
J. Duane Poliquin, chairman of Azucar, stated:
“We are pleased to report these further results from the Porvenir Zone and to getting the drill turning once again on the excellent targets that we have at El Cobre. We look forward to updating shareholders on this year’s plans and reporting on our progress and results.”
I’m pleased to see the company active once again and look forward to details on upcoming exploration work.
Spring is here, baseball is back, and here in the U.S. the combination of pent-up demand, stimulus after stimulus, and accommodative monetary policy will insure that corporations, banks, and the better off amongst us will continue to thrive.
That 80% stock market crash people are calling for may happen one day but it’s not happening anytime soon.
There are plenty of ways to make money in this environment and though I believe the resource space is going to deliver some spectacular gains in the coming years even I am looking for ways to diversify my stock holdings. When it comes to cannabis stocks, tech stocks, crypto stocks, etc., there is no one I trust more than Nick Hodge.
When Nick and I decided to launch Digest Publishing the goal was, and is, to use the network we’ve been fortunate enough to develop to bring you access to the best deal flow, research, and insight across multiple sectors.
Research and insight that hopefully allows you to make informed decisions about how you want to profit from this irrational experiment central banks have taken us on. We’re still hard at work on the premium site that will allow for easier tracking of positions, updates, etc.
We’re also hard at work developing new services to make sure we are providing you as many opportunities as possible to profit from the current environment and the one we’re headed towards.
The next run higher — where we are making triple-digit gains in weeks, not months or years — in resource stocks is coming. Backtrack to last year when gold made all-time highs and look at how it played out before the peak in August, because it’s about to play out that way again.
Profitable producers will rise first. Gold will make all-time highs again and companies with discoveries of merit will soar. M&A at healthy premiums will accelerate, leading to a rapid re-rating of companies with a resource base of substance.
You already know how I feel about the metals that will allow for the electrification of everything. Copper, lithium, and uranium are already in robust bull markets, but like gold it’s just getting started.
I’m as comfortable with how the portfolio is structured as I have been in quite some time because the bulk of the companies that are exploring are on to significant discoveries that I know are adding value whether or not the market rewards that right now. It will.
I also have some new — and old — ideas to introduce to you in the coming months which will require a sell or two in order to make room.
Stay safe and keep an eye on your inbox.
Let's get it!
Gerardo Del Real
Editor, Junior Resource Monthly
For the past decade, Gerardo Del Real has worked behind-the-scenes providing research, due diligence and advice to large institutional players, fund managers, newsletter writers and some of the most active high net worth investors in the resource space. Now, he is bringing his extensive experience to the public through Resource Stock Digest, Junior Resource Monthly, and Junior Resource Trader. For more about Gerardo, check out his editor page.
*Follow Gerardo on Twitter.