JRI This Week #34: The Pre-PDAC Push
This week will be a grind, as I try to get some work built up before I travel to Toronto to attend PDAC. Here's a brief run-through of what to expect, plus some news updates.
tl;dr:
I discuss a couple of news updates relevant to articles I have written lately and discuss what I plan to publish over the next week or two into the start of PDAC. After my weekly news round-up, here’s the list of content I hope to get out over the coming 2 weeks:
1: "On-Site” #1 Mini-Series: “The Drill Rig” 2: iTech Minerals Drill Campaign Walkthrough and Review 3: Evaluating Matters: Fireweed Metals With PI Financial 4: Giga Metals “Quick Hits” Update 5: Globex Mining News Flow Update 6: Invictus Energy Update Article
Read on below for a bit more detail.
Intro
If you’re in the industry, you know that March is a bit of challenge for scheduling phone calls or meetings. Not because no one is doing anything - that’s what August is for - but because PDAC is coming and everyone is already busy doing something. Dance cards for the weeks in and around PDAC have a tendency to fill up in a hurry.
With this reality in mind - and hoping to still have room to write up a couple trip reports while I am in The Big Smoke - I will be tackling quite a few articles this week and hopefully build up a couple in reserve to tide me over being at PDAC. But before I run through them quickly, I wanted to touch on some news from the last week that stuck out to me:
1. Weekly News Round-Up
1.1. BC Cancels Proposed Land Acts Amendment
If you read my updates last week, you will know I recently had Chris Taylor on to discuss BC’s new critical minerals strategy. During our chat, Chris hit a note that resonated with me which I turned into a full-fledged article: Don’t rush this. Do it, do it right, and make it better. But above all else, don’t rush it - the potential and the stakes are too big to let arbitrary deadlines dictate the process.
Roughly 25 hours later, the news officially came out that BCGov was cancelled the amendment process for the time being. You will forgive me for a moment of smug self-congratulation on this one (at the very least, my timing was impeccable!).
But more sincerely - good. No one involved - government, industry, or First Nations - wants to ruin BC mining, contrary to what some think. But if the desire is to make things better, then make things better. And give the dippers some credit. Not every government would relent on something like this.
1.2. Libero Copper: The Dead Rises(?)
This is a funny one I have been following for some time. Their Cu+Mo Mocoa project was getting some love a couple years back. However, above-ground concerns (forest reserve over top of part of the deposit, nearby mudslide disasters, election of leftist Petro as president, and a stubbornly-opposed mayor whose signature was needed for further work) scuppered the project.
Fast forward to last November and Libero was tearing up floorboards to heat their home - selling a BC property and letting its claims on another lapse. A rights offering at 2 cents where they were hoping for nearly $2.5 million only returned maybe 1/5 of that. Things looked bleak.
Bleak or not, it struck me as an asymmetrical opportunity for an appropriately-sized (read: small) position. Sentiment and valuation couldn’t get more depressed, and Mocoa was still a world-class deposit. So I bought back in at 2 cents last December as a bit of a degenerate lotto ticket.
And then the volume came. Like 50x-100x average volume every day for weeks on end. I ended selling on a quick double but the volume, rumours, and news, kept coming.
Now - multiple financings closed, post 10:1 rollback, the company is cashed up once more. Frank Giustra is now in. That pesky mayor is gone and the successor looks to be supportive. Petro wants to make copper a Colombian priority, and considerations on avoiding the forest reserve are ongoing.
Point is - my spidey senses are still tingling on this one. I wouldn’t call them a serious investment yet. But if you like buying in the discount aisle, this could be for you. It could simply be retail annihilation-through-dilution once more, but there certainly seems to be something happening behind the scenes. Stay tuned.
2. My Weekly Content - What’s to Come
Hoping to get through all this. Place your bets on how I do. I fly out Friday, so it’s gonna be a busy week by the looks of things.
1. "On-Site” #1 Mini-Series: “The Drill Rig”
Another short clip to continue the “On-Site” series in the build-up to the larger documentary. This video+article combo will look to highlight the heart of the whole operation - the drill rig. A look at daily routines, the process, and the jobs and responsibilities related to it. Fathom Nickel’s Albert Lake Drill Program (ongoing!) was the target. Ticker: FNI.CN.
2. iTech Minerals Drill Campaign Review
This one got teased a week or two back but illness ripped through MD Michael Schwarz’s house causing it to be postponed. But it is back on the menu this week and I am looking forward to it. I remain a believer in iTech. Graphite is beat up badly but with strong future demands and would be a smart contrarian pick. iTech itself has been down-trending for a long time to the point that they now have an awful lot of failure built into the share price at current levels - failure I don’t think is warranted given what iTech is proving out. Lacroma - after some worries 4 or 5 months ago - looks like it is en route to the tonnage needed to make the project viable, and Mike has development plans in pocket. Ticker is ITM.AX.
3. Evaluating Matters: How To Value Fireweed Metals With PI Financial
Fireweed Metals (FWZ.V) is just one of those brain-dead obvious picks in this space. Great team. Great resource. And yet their story shows how even best-in-class companies sometimes trade sideways. But, as the saying goes, though, price is what it costs you, but value is what you’re buying. And by almost any metric there seems to be a disconnect between the implied inherent value of Fireweed’s projects and the “stuck in the mud” share price.
I am excited to get the chance to sit down with analyst Connor Mackay from PI Financial (who cover Fireweed) and pick his brain over company valuation metrics, what he looks for (good and bad) and what he thinks needs to happen for Fireweed to rerate to more closely align share price with project value.
This is a live event, Wednesday Feb. 28 at 1:00 PM EST. Register by clicking here.
4. Giga Metals “Quick Hits” Update
Giga Metals’ (GIGA.V) investors have been in a holding pattern - as the nickel LMEO price slowly imploded - the past few months. CEO Mark Jarvis is pounding pavement trying to bring on another partner for the project to help them advance to the FS stage and there just isn’t much else for Giga’s investors to do but wait for the outcome of that work. I have a new long-form project to announce for Giga that will end up spanning several months. I will do a sneak peek of it this week.
5. Globex Mining News Flow Update
I owe these guys some love. I still have hopes of publishing a response to my own article on the Mont Sorcier iron project. That project massively blew up in size on me and my head is still spinning in 62% price penalties and pelletizing. The rebuttal/valuation deep dive is agonisingly close to being done, but we will see where we get to on the day I sit down to write for Globex. Their news flow never ends, so my quarterly “here’s what Globex’s many partners have been up to” update might be a good PDAC gap-filler. Rumour has it a new Globex website is imminent. Looking forward to it. This might be my favourite commodity “ETF”. Ticker is GMX.TO.
6. Invictus Energy Update Article
Invictus Energy (IVZ.AX). Of all the companies and all the infinite vagaries of the market, this is one that confounds me the most of all my positions. They finally announced a discovery - and a large one at that. Offtake partners already signing up. Massive potential for growth all around. One of those scenarios where blue sky outcomes remain in play after some considerable derisking. And yet, the stock is languishing in a way I would have never guessed it would have 2 years ago when I first started in with them.
And yet, it remains one of my top picks and I remain very overweight in it. Similar to what I wrote about Fireweed, the disconnect I see between the price and valuation here is bordering on absurd. I’m risking the opportunity cost of time staying in but I honestly just don’t see many other companies out there with similar value propositions.
Anyway, look for an update article covering recent Invictus news this week (there has been quite a bit) followed by a written Q and A with MD Scott Macmillan after my return from PDAC.
That’s it from me. Looking forward to a busy week. If anyone is planning to attend PDAC and wants to meet up, let me know!
Thanks for reading.
-Matthew from JRI