Mike Fagan's Precious Portfolio: Special Alert No. 10: Tier-3 Portfolio Addition

Mike Fagan's Precious Portfolio


Alert No. 10
February 2, 2021

Special Alert: Tier-3 Portfolio Addition

Dear Precious Portfolio subscriber,

In today’s alert, we’re announcing a new portfolio addition from Tier-3 (Juniors) — Loncor Resources Inc.

Loncor provides speculators with exposure to gold via a highly experienced management team with over 100 years of combined experience in metals exploration in Africa; an active joint venture with Barrick Gold (NYSE: GOLD); and an established resource of around 3.3 million ounces grading 2.8 grams per tonne gold.


Precious Portfolio Alert #10:

 Tier-3: Loncor Resources Inc. (OTC: LONCF)(TSX: LN)


pyramid-chakana-copper


 Tier-3: Loncor Resources Inc. (OTC: LONCF)(TSX: LN))

chakana-copper-logo

Loncor Resources Inc. is a Canadian-based gold exploration company focused on projects within the emerging Ngayu Greenstone Belt in the Democratic Republic of the Congo (“DRC”).

peter-cowley

The company is led by president and geologist, Mr. Peter N. Cowley, who boasts a distinguished track record of major exploration successes in Africa. Previously, as president & CEO of Banro Corporation, he led the exploration that delineated major gold resources at Twangiza and Namoya in the DRC.

The Ngayu Greenstone Belt is an emerging area play that’s situated 220 km from Barrick’s Kibali Gold Mine in the Kibali Mineralized Trend.

Kibali is one of the world’s great new gold mines, producing a record-breaking 814,027 ounces of gold in 2019 at all-in sustaining costs (AISC) of US$693/oz.

ngayu_general_location

Barrick is now searching for “Kibali II” via its JV with Loncor in the Ngayu Greenstone Belt. Already, Barrick has commenced scout drilling on a selection of carefully defined Tier-1 targets with news beginning to filter out.

The JV is beneficial to Loncor as it provides the company with a minority 35% exposure to any assets chosen by Barrick under the agreement with any projects not fitting Barrick's criteria returning to Loncor at no cost.

To that end, Barrick has already advanced several targets to the drilling stage for 2021, including Yambenda (below), which means speculators can expect continuous news flow out of the JV over the next 6-12 months.

yambenda

Outside the Barrick JV, Loncor has systematically built resources at Makapela (100%) and Adumbi/Imbo (84.68%); both project areas are denoted in the above map.

At Adumbi/Imbo alone, Loncor has delineated ~3.3 million attributable ounces grading 2.8 grams per tonne gold (g/t Au) with less than 20% in the Indicated category.

adumbi-potential-growth

Loncor has commenced a 7,000-meter drill program at Adumbi (Imbo Project Area) with a primary aim of expanding the known resource, which currently sits at 2.5 million ounces Inferred grading 2.54 g/t Au.

IMBO PROJECT AREA
ADUMBI DEPOSIT - SIGNIFICANT POTENTIAL TO INCREASE 2.2.M OZ RESOURCE

84.68% Loncor
Imbo Resource surges to 2.5M ozs

  • Gold hosted in 100m+ thick Banded Iron Formation with smaller high grade resources close by

  • Key project is Adumbi - drilled extensively along 900m strike, 450m downdip/plunge. Also resources at Manzako + Kitenge

  • By utilizing 2017 drilling and other factors, Adumbi’s inferred resource recently increased by 61% to 2.19Moz

  • 7,000m drill program has now commenced at Adumbi to further increase the resource. First results released.

Target – drill, increase size and certainty

    Current grades indicate excellent open pit potential with higher grades at depth amenable for underground extraction. Further drilling should add ounces and certainty to the current 2.19Moz (29.0Mt @ 2.35g/t Au) contained at Adumbi and outline additional potential underground resources.


adumbi-deposit

High-grade intercepts announced to-date from Imbo include 28 metres grading 3.26 g/t Au and 20 metres grading 2.83 g/t Au.

Commenting on these latest drilling results, Loncor president, Peter Cowley, stated on 5 January 2021:

"We are very encouraged by the results of the first three core holes of our 7,000-metre drilling program at Adumbi. All these boreholes have intersected significant widths and grades and should increase the current inferred mineral resource of 2.19 million ounces (28.97 million tonnes grading 2.35 g/t gold) at Adumbi, both within the current open pit and at depth below the pit."

adumbi-drilling-program

Once the current drill program at Imbo Project Area warps up, Loncor will look to incorporate any additional ounces from that drilling into a Preliminary Economic Assessment for the Adumbi Project.

Further, at its 100%-owned Makapela Project, Loncor is targeting high-grade gold mineralization where 65 core holes (drilled down to a maximum vertical depth of 500 meters) have produced an Indicated mineral resource of 600,000 ounces and an Inferred mineral resource of 550,000 ounces — both at a cut-off grade of 2.75 g/t Au.

Hence, speculators can expect a steady stream of news flow, as well, outside the Barrick JV.

With current drilling to expand the 3.3 million oz/Au resource, the high gold grades intercepted to-date, and the active JV partnership with Barrick — the potential exists for a significant re-rating to the upside.

Naturally, there are concerns for any foreign company operating in the DRC. Yet, according to Loncor’s management team, the tribal conflicts that are prevalent in the eastern provinces are not present in the districts in and around the company’s primary project areas and, thus, no issues were reported during the company’s 2020 field season.

The Loncor team is steadfastly committed to maintaining a symbiotic relationship with the local communities and has already constructed a school and health clinic as part of those ongoing efforts.

1year-loncor-resources

Loncor Resources has approximately 112.2 million shares outstanding for a current market cap of around C$60 million. And the company is well funded with approximately C$5.0 million in cash.

Current price: US$0.42 per LONCF share: Buy up to US$0.45

Establish your Loncor Resources (OTC: LONCF)(TSX: LN) position incrementally and look for opportunities to buy additional shares on any intermittent weakness. Learn more about Loncor Resources Inc. at www.Loncor.com.

#SilverSqueeze

A quick note on the Reddit-army-led mania that’s shifting from mass bets on heavily shorted stocks like GameStop, Bed Bath & Beyond, and AMC to putting the short squeeze on the silver bullion market.

At this juncture, it’s unclear as to how long this short squeeze will last and what effect it’ll ultimately have on silver bullion prices and related securities. Yet, the ride has certainly been bumpy thus far with silver futures surging as much as 13% yesterday (touching 8-year highs above $30 per ounce) before reversing course this morning to around $27 per ounce.

The important thing to keep in mind is that – whatever the end game ends up being in this current social media driven mania – the fundamentals for higher silver and gold prices have been in place for a number of years due to the one-two-punch of unlimited money printing and the debasement of the US Dollar and other fiat currencies.

Brien Lundin of Gold Newsletter – whom you’ve heard from many times in past issues of Hard Asset Digest – said it best:

And unlike GameStop or other heavily-shorted equities, the potential supply of silver on the Comex that can be brought in to squelch a short squeeze is functionally unlimited. Given the CFTC’s blind eye toward position limits, new “silver” can be created in practically infinite quantities by mere keystrokes.

The rubber meets the road, however, if/when enough investors on Comex stand for delivery. There’s not nearly enough silver (or gold) in the Comex warehouses to meet the demand if this happens, and the whole farce could come crashing down in that event.

Yes, they can simply move the deliveries to their London-delivery shell game called “exchange for physical” or simply move to settle deliveries in cash. And before that, they’ll raise margin requirements to dampen speculation.

But my view has been that by simply forcing the exchange to take these emergency measures, the entire farce of the paper silver and gold markets — which are merely a speculator’s sandbox and do not reflect the actual supply/demand factors for the metals — would be exposed.

And the prices of gold and silver would soar to levels more closely reflecting their values.

Still, the shenanigans that can be played on Comex and the possibility of similar games in unallocated physical metals repositories means that investors should not focus their attentions on SLV or similar ETFs. Instead, I recommend the Sprott Physical Bullion Trusts or other allocated metals accounts.

These vehicles will impact the physical markets…and in the end the pressures there will finally force the futures markets to follow the physical markets.

Be Careful What You Ask For

If this scenario happens, it will all end well for gold and silver bugs.

But if the buying we’re seeing right now is largely a futures-based speculation, in which the hedgies are actually investing alongside the Reddit mob, then we’ll get a sharp retreat from the fever-induced spike.

So let’s hope the #SilverSqueeze crowd is buying the physical metals, as the wise experts have been counseling.

Hence, as speculators in the precious metals sector, we certainly don’t need this incursion by the Reddit mob as artificially generated spikes almost always end in mass exodus… just like what’s predictably unfolding for shares of GameStop and their ilk. In fact, GameStop is down another 50% as we speak!

Bottom line… we stay the course by continuing to focus on top-quality resource names in what we see as a long-term commodities bull market for the precious and base metals.


Yours In Profits,
mike fagan
Mike Fagan 
Editor, Precious Portfolio 



Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest, Hard Asset Digest, and Mike Fagan's Precious Portfolio readers.


Previous Alerts

Alert No. 1   |   Alert No. 2   |   Alert No. 3   |   Alert No. 4   |   Alert No. 5   |  
Alert No. 6   |   Alert No. 7   |   Alert No. 8   |   Alert No. 9