The Hottest Companies This Conference Season

Written by Gerardo Del Real
Posted September 25, 2017

With the summer doldrums behind us, conference season is upon us.

I spent four days at the Beaver Creek Precious Metals Summit meeting with companies, talking with analysts, and exchanging ideas with some of the best minds in the business.

There were several noteworthy takeaways from the conference.

The first being a much more active deal-making environment.

Last year it was juniors approaching the mid-tiers and majors, this year there were multiple examples of the juniors being courted for equity stakes.

The reason is a simple one: mid-tiers and majors simply are not exploring and few are replacing reserves in-house. The next logical move is to take equity stakes in explorers operating in stable jurisdictions and, if exploration proves successful, buy them out.

For a complete list of the presentations at Beaver Creek please click here.

One company that didn’t present but was the subject of chatter was K2 Gold (TSX-V: KTO).

gold market cap comparison

I had the opportunity to chat briefly with Chairman John Robins — who was there on unrelated business — and asked about the whispers of a potential merger or addition of new assets to allow K2 Gold year-round exploration.

The rumors make sense considering the low market cap — approximately C$10 million — the market has assigned the company.

While Mr. Robins didn’t comment on whether a merger of some sort or acquisition was imminent, he didn’t deny either rumor when I asked if he believed that’s why the stock was unusually range bound despite early success from the limited first-pass drill program at its Yukon Wels property.

I believe the company is an absolute bargain at these levels. The track record and network that John Robins and the K2 Gold team brings merits a much higher market cap.

K2 gold should be on everyone’s list of companies to keep an eye on.

Another company that was not presenting but was the subject of a lot of chatter — all positive — was Revival Gold (TSX-V: RVG).

Revival recently announced a game-changing transaction that has brought renewed attention to Idaho.

Revival acquired the past-producing Beartrack Mine from Meridian (a subsidiary of Yamana Gold).

The project encompasses 3,496 acres (1,415 hectares) and hosts five known mineralized areas within a five-kilometer strike length along the Panther Creek Fault. Mineralization is open to the southwest and at depth.

The Beartrack open pit heap leach mine was operated by Meridian Beartrack from 1994 until 2000 and produced approximately 600,000 ounces of gold. The mine achieved a life-of-mine recovery of 87% based on the cyanide-soluble grade from oxide material during heap leaching operations. Beartrack was closed at a time when the gold price was below US$300 per ounce.

Gold is no longer $300 an ounce.

Did I mention that the project already boasts a historic resource of 26.6 million tonnes at an average grade of 1.51 g/t gold containing approximately 1,299,000 ounces of gold?

The potential at depth is significant. An example of that potential is highlighted in drill hole BT-12-180D, which returned 28.28 meters of 23.78 g/t AuEq. Another intercept — BT12-175 — returned 9.75 meters of 71 g/t Au.

The company is undertaking a C$10 million financing, which will leave the company with approximately 41.7 million shares outstanding and a market cap near C$30 million.

Shares are cheap and after speaking with CEO Hugh Agro at the conference I’m convinced the team in place at Revival has a clear path to near-term production as well as clear exploration upside.

One analyst I spoke with was not even aware of the Beartrack transaction and couldn’t believe the valuation given the near-surface ounces, exploration upside, team in place, and the jurisdiction.

I don’t believe he will be the last to be surprised once smarter people than me catch on to the story.

I also don’t believe this low valuation will last.

One more name. I was able to sit in on a presentation given by Brendan Cahill, Excellon Resource’s (TSX-V: EXN) CEO. You can watch that here.

The short version is if you believe that silver will go higher in the near-mid term, Excellon presents great leverage to the upside.

If you believe silver is going lower in the near term (as I do and have for a while) then wait and put the company on your list.

Excellon’s 100%-owned Platosa Mine in Durango has been Mexico’s highest-grade silver mine since production commenced in 2005.

The company is focused on optimizing the Platosa Mine’s cost and production profile — which has been challenged due to flooding and technical challenges — and discovering further high-grade silver and CRD mineralization on the Platosa project.

I believe the exploration potential is excellent. I believe the challenges the company faced in regards to the flooding issues are behind it and I will be keeping a very close eye on Excellon.

Speaking of conference season, Nick Hodge and I will be presenting at the precious metals panel at the 43rd annual New Orleans Investment Conference during the last weekend of October.

Click here for more details.

To your wealth,

gerardo-sig

Gerardo Del Real
Editor, Junior Mining Monthly and Junior Mining Trader.

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 Outsider Club, Junior Mining Monthly, and Junior Mining Trader. For more about Gerardo, check out his editor page.

*Follow Outsider Club on Facebook and Twitter.

Comments

Investing in Marijuana Without Getting Burned

JMM_copper_superplay_banner_ad