It's been an interesting year for investing as economies reopen for business. Renewable growth has driven demand for high-impact minerals, and there looks to be a revived interest in precious metals for 2022. We've reviewed our interviews through 2021 and present a roundup of our favourites. These range from cannabis to uranium, and nascent to serious value propositions.
Cobalt Blue Holdings (ASX: COB)
Automotive manufacturers are trying to secure their supply chain of ethical cobalt. Prices look set to rise. Cobalt Blue Holdings is a cobalt exploration and development company with headquarters in Sydney, Australia.
Cobalt Blue's Broken Hill Cobalt Project in New South Wales consists of a large and rare cobalt deposit in pyrite. Focused on advancing the mining and refining of the ore, the company has also developed an on-site pilot plant to extract the cobalt and manufacture a commercial, battery-ready product.
The company is focused on becoming the world's premier producer of ethical cobalt to service the strong demand for cobalt products for new generation batteries. The company raised $15m cash in June and has the potential for a further $11m in warrants coming due.
With cobalt prices up, we consider investors could be looking at returns of two to three times their investment. We're excited by this company and will be watching it through 2022 before deciding our next investment decision.
Become an expert in all things Cobalt
Marimaca Copper (TSX: MARI)
There hasn’t been any large copper discoveries in a couple of decades. Yet the demand for copper for the infrastructure investments in China, Europe and North America is driving prices multi-decade highs.
Marimaca Copper's flagship project is the Marimaca Copper Project in Chile's Antofagasta region. In five years, the open-pit project is the sole new copper-oxide discovery and Chile's most significant discovery in ten. They continue to increase the scale.
The project has a low capital cost to production and operates in the bottom quartile of all-in-sustaining cash costs. It also offers the potential of large scale sulphide extensions below the open pit. A recent report jointly issued with Wood MacKenzie shows the project operates at a low carbon intensity per ton of copper produced.
Hayden Locke rounds up 2021 for Marimaca,
"Our team has achieved a remarkable amount in 2021... We drill tested four targets making four new discoveries, including the potentially significant extension to our resource, directly below the Marimaca Oxide Deposit. We remain very excited about the potential to grow our resource base and are drilling as we speak.
...an updated Mineral Resource Estimate in Q2 2022 ... will be the catalyst for us to commence Feasibility Study engineering, complete it towards the end of 2022, and move rapidly into developing the Marimaca Oxide Copper Project. We believe Marimaca will be one of a very small number of construction-ready copper projects in early 2023."
The issuance of the recent report positions the company well for access to lower-cost finance, from institutions seeking low carbon investments. It also makes Marimaca an interesting takeover target for larger companies seeking to dilute their carbon footprint. An exciting company and one to consider for 2022.
Chakana Copper (CVE: PERU)
Chakana Copper is an exploration company that acquires and explores mineral properties. It owns three contiguous mineral claims in the Iskut River District of British Columbia. It also owns the Soledad Copper Project near Aija, in the Ancash region of Peru. Soledad comprises several deep high-grade quartz-tourmaline-sulfide breccia pipes.
Chakana Copper has a $30m market capitalisation with 20% of the company owned by Goldfields. With a strong President & CEO, David Kelley, and senior team, the company is working to a resource estimate for Soledad by year-end. Drill results to date show particularly high-grade ore.
David Kelley, President & CEO:
“2021 was a pivotal year for Chakana Copper in completing a 30,000m exploration and resource drilling program that resulted in several new discoveries and put us in position to release our Initial Resource estimate for the Soledad high grade Cu-Ag-Au project. Our Initial Resource estimated is expected to be followed by an aggressive exploration drilling program testing up to twenty new targets which are expected to add to the overall Resource estimate.”
We like this company, they're well funded, have a good social license through local Peruvian recruitment, and their results are super high grade. However, we feel they need to do more in communicating to retail investors, particularly those concerned about the size of Goldfield's investment. They need to sell themselves to the market, but it's a good story.
Increasing demand & diminishing supply... high prices ahead.
There's still time to pick your copper winners.
African Gold Group (TSX-V:AGG)
African Gold Group is a gold exploration and development company focused on properties in Southern Mali, West Africa. It's currently developing the Kobada Gold Project, located 126 kilometres south of Mali's capital city, Bamako. The project is well sited with transportation links to the capital and logistics to West African ports.
We're impressed with the company and its leadership by President & CEO Danny Callow. They've delivered well in recent years despite some difficult issues. They delivered their study on time and budget and have grown their resource base. Production is imminent with aims to produce 150,000 ounces per annum versus the original plan of 100,000. Despite this solid work, the market seems not to be noticing.
Danny Callow says,
"We're moving into 2022 with everything in place to develop this asset into an operating mine. Despite global uncertainty in 2021, the gold price has remained at levels where Kobada would be a significant free cash flow producer. We believe the fundamentals for gold in 2022 will see an increased price which will only increase our project's NPV of (currently) more than US$500 million, to even higher levels."
With the outlook for Gold in 2022, we feel that African Gold Group is trading at a significant discount to where it should be. A rerate of the company would put them 10 to 20 times their current EV. A great opportunity for a contrarian investor.
Anaconda Mining (TSX: ANX)
Anaconda Mining is a gold exploration, development, and mining company. Focused in Atlantic Canada, the company operates mining and milling operations in the Newfoundland mining district of Baie-Verte.
Management's previous track record is impressive. Operations include the Tilt Cove Gold Project comprising circa. 11,000 hectares of highly prospective mineral lands, the Pine Cove Mill, tailings facility, and deep water port. Anaconda is also developing the Goldboro Gold Project in Nova Scotia, comprising a high-grade resource. A feasibility study is ongoing for Goldboro.
Anaconda is splitting their feasibility study, planning to do a feasibility on the open-pit expansion first. The open-pit exploitation will generate cash flow and fund the underground development two to three years later. This company is generating cash flow and offers great value as it builds scale.
Bonterra Resources (TSX-V: BTR)
Bonterra Resources is a Canadian gold explorer located in Quebec. The company has a large mining and exploration assets portfolio, including the Moroy, Barry, and Gladiator deposits, the Urban-Barry Mill, and many high potential exploration prospects. Bonterra controls the only permitted gold mill in the area, holding over 38,000 hectares of land in the Urban Barry Camp.
The company raised $10m, largely funding their drilling program. The program shows high-grade results, and PEA was to be Q4 2021; this may be delayed, allowing new drill results to be incorporated. Measured and indicated resources are currently 1.25M ounces, but recent results may raise this figure above 2M ounces.
No orders have been placed for the long lead-time 2,400 tpd mill required for operation. However, we might see upgrades to the existing mill capacity to allow production to ramp up before incurring CapEx.
We like the approach taken by Bonterra Resources. They have solid projects, high grades, and a good team. At $105m market capitalisation, they're currently undervalued by the market.
Cabral Gold (TSX-V: CBR)
Cabral Gold is a Canadian-owned company that identifies, explores, and develops mineral properties in South America. With a focus on gold properties, the company's flagship project is the 100%-owned Cuiú Cuiú project, located in the northern Tapajós area of Brazil. The Cuiú Cuiú project covers 15 x 10 km with two discovered gold deposits and 43 mostly high-grade targets.
An aggressive drilling program had an inauspicious start with no results from the first three holes. Since then, however, drill results have been good, identifying seven high-grade veins among their low-grade deposits. The selloff of shares by one company director when stock prices peaked on the back of drilling results raised questions in the market. However, CEO Alan Carter holds over $1.5m of his shares in the company and continues to hold them.
Carter is upbeat about the future,
"This year has been very successful. We've made two new gold discoveries on the site, and we have a district within the Tapajos region, and we are finding new deposits. We have an aggressive drill program in progress right now with plans to continue in 2022, so it will be an exciting year. We truly believe that the district will have multiple deposits, so we will be aggressively pushing those forward."
There's great potential here, with high-grade ore now appearing and multi-drill programs continuing. The challenge for Carter is to manage the market and get investors interested again after its meteoric share price rise in 2020. He needs to demonstrate scale and show a route to revenue. However, we like the company and the CEO. Cabral is worth watching through 2022.
K92 Mining (TSX: KNT)
K92 Mining operates in the Eastern Highlands of Papua New Guinea and owns the Kainantu Gold mine. Kainantu is an underground mine offering high-grade at low costs and sits within an 860 sq km land package in a region renowned for tier 1 deposits.
The company published a stage three expansion PEA study showing tier 1 production at circa. 350,000 ounces gold equivalent per annum by late-2023. This quantity would value the company at CAD$1.6bn; however, the current share price reflects this value.
The company is producing and selling Gold, so no dilution to shareholders; it's carrying no debt and paid $30m tax last year. Their budget for the next two years is unchanged. Their challenge is to get the production to 350,000 ounces and be a true mid-tier producer. K92 is also a frontrunner in ESG mining practices.
John Lewins, President and CEO, had this to say about the past twelve months,
“The Kainantu Gold Mine took a major step forward (with) the second half of the year expected to be the strongest, (and) the fourth quarter potentially a record … the Stage 2A Expansion, planned for commissioning in 3Q (2022 will) increase throughput by another 25%.“
“… exploration (in) 2021 was very active for K92 with … 11 diamond drill rigs operating. … a major focus was on infill drilling at Kora to upgrade resources for the upcoming DFS and updated PEA, the advancement of Judd from an early-stage exploration target to a new major mining front in just over a year is a significant accomplishment. In Q4 2021, we made a major pivot towards resource growth exploration, with the majority of underground drill rigs switched to step-out drilling Judd.
On surface, for the first time, we have commenced drilling Judd South and Kora South, with a second drill rig being added shortly. Porphyry exploration at Blue Lake is progressing with deeper targeted drilling underway…. the company also completed the first major aerial geophysics program undertaken in PNG for a number of years, with over 5,000 line kilometres flown. We are very excited about exploration in 2022.”
K92 seeks a resource extension on the existing Kora vein while beginning a drilling program on the neighbouring Judd vein. As the Judd drill program accelerates, it may support a new valuation. The challenge is to backfill the market valuation; however, we like the measured and cautious approach taken by CEO John Lewins. He feels he can get to the 350k production, and we agree.
ESG is a new way of thinking and operating.
Karora Resources (TSX: KRR)
Karora Resources is a mineral resource company focused on acquiring, exploring, and developing precious metal properties. The company owns the Higginsville Gold Operations and the Beta Hunt Gold Mine in Western Australia. The Higginsville operation includes a low-cost treatment facility currently processing 1.6Mtpa, with plans for expansion to 2.5Mtpa by 2024.
Karora had a great turnaround last year in 2020, beginning with a minus $10m balance sheet and ending the year with $80m cash, having met all the promised targets. Production was 20% more this year than predicted.
Their target for next year is 105,000 to 115,000 ounces, and they're allocating $20m for drilling. In the meantime, they're producing Gold consistently, having made a small investment to increase output by 550tonne/day.
Institutional investors are comfortable with Karora, with the share price closing out the year over 20% higher than the start. The company's delivered good results, and there's great promise for 2022 given the investment in drilling and exploration. This will be one of the winners in 2022.
O3 Mining (TSX-V: OIII)
Quebec-based O3 Mining is a gold explorer and mine developer owned by the Osisko Group, with Osisko providing O3 with extensive support, mine-building success, and expertise.
O3 Mining holds a 100% interest in 137,000 hectares in Quebec, controls 61,000 hectares in Val D'Or, and over 50 kilometres of strike length of the Cadillac-Larder Lake Faut. It also has assets in the James Bay and Chibougamau regions of Quebec. Properties operated by the company include The Cadillac Break, Malartic, Gwillim, and Alpha Properties.
This year, we've spoken a lot to Jose Vizquerra, President and CEO of O3 Mining. Our takeaway from those conversations is that Vizquerra has a long-term plan that investors struggle to value. O3 is carefully stepping through the phases to become the next mid-tier miner.
It's a good company with a solid team, great assets, and the right jurisdiction. At $130m market capitalisation, O3 is underpriced, offering this opportunity of low-risk investment.
Rio2 (TSX-V: RIO)
Rio2 is a mining company focusing on strategic acquisition, project development, and mining. They aim to build a multi-asset, multi-jurisdiction, precious metals company.
Their current project is the Fenix Gold Project of 16,050 hectares, located in Chile's Atacama region, Copiapo Province. Located in the Maricunga Mineral Belt, Fenix is one of the largest undeveloped pre-feasibility stage gold oxide projects in South America.
With funding secured, long-lead items are being ordered to construct a producing plant in 2022. With production ramping up through 2003, the project will be cash flow positive. Rio2 is currently valued at $150m, while +100,000 ounce production suggests potential future valuations of +$500m.
The team is a proven team for whom 2022 holds great promise. Undervalued at the current share price, this is a stock for your portfolio.
Rupert Resources (TSX-V:RUP)
Canadian based Rupert Resources is a gold exploration and development company based in Ontario. The company owns the Pahtavaara gold mine, mill, and exploration permits and concessions located in the Central Lapland Greenstone Belt in Northern Finland. They also have 100% interest in the mineral claims of the Gold Centre property in Balmer Township, Red Lake Mining Division of Ontario.
Despite major M&A activity in the market, Rupert is keen to continue to grow value at this stage for capture in the future. The company is focused on pursuing a three-pronged strategy, developing their Ikkari discovery, growing the business, and preparing for a PEA for the main resource. They're currently picking up land packages for exploration and looking at generative exploration satellite targets near Ikkari.
CEO James Withall reflects on the past year,
"... 2021 went about as well as expected as we moved from zero to a 4M ounce high-quality gold resource at Ikkari. It's still early days for commercial exploration in Central Lapland, and with our largest drilling program to date now underway, we're confident of making further new discoveries of scale on our expanding land package, as well as adding to our resource inventory at Ikkari, and the permitted Pahtavaara mine."
The company is steady, well run, and had a good year through 2021. We can expect more of the same in 2022 as they set higher targets. A large company but it still has a clear growth strategy and a tight share structure.
Serabi Gold (LSE: SRB, TSX: SBI)
UK Headquartered Serabi Gold is a mining and exploration company focused on evaluating and developing gold projects in Brazil. Serabi owns three gold projects. Two of the projects, Palito, and Sao Chico, are currently in production. Their third project, Coringa Gold, is undergoing permitting and the construction of a process plant. The company reports total group resources of over 910k oz and reserves exceeding 340k oz.
Serabi has been impacted by the pandemic through 2021, with a struggle to get drillers and a disrupted supply chain. With limited cash reserves, the company needs a larger partner to free up exploration while using their current cash to bring Coringa into operation.
Sitting on a great resource and run by a good team, Serabi Gold is a prime M&A target whilst it looks to accelerate its own production.
Superior Gold (TSX-V:SGI)
Superior Gold is a Toronto based business that acquires, explores, develops, and operates gold resource properties. The company's flagship project is the 100% owned Plutonic Gold operations, located in Western Australia.
Assets include the Plutonic Gold underground mine with a central mill, the Hermes open pit projects, and an 80% interest in the Byrah Basin joint venture. The company holds interests in circa. 64,374 hectares.
We spoke with recently appointed President and CEO Chris Jordaan, originally from Newcrest Mining. Current revenues are from their underground operations, with great future potential from their open pit. Their focus in 2022 will be steadying the project, with considerable cash required for upgrading inherited infrastructure.
“2021 was a successful year for Superior Gold, the team continues to execute on our optimization and expansion plan. As we enter 2022, our focus remains firmly on achieving three goals namely to deliver a safe, stable and predictable operation; increase production delivering an operation with scale at reduced cost and improved cash flow strengthening the balance sheet; and invest smartly in exploration of known high potential targeted areas.”
Look for more clarity around their intent for the orebody late 2021, early 2022. At 77k ounces this year and valued at $80m, there is potential to take the project to 100k ounces per annum which should value the company around $500m, far from its current valuation of c.$90M.
Early days but with great potential and strong, experienced leadership with a clear plan.
A subtle, but important difference.
Troilus Gold (TSX: TLG/OTC: CHXMF)
Troilus Gold is located in Quebec, Canada and holds a strategic land position of 1,42sq km in the Frôtet-Evans Greenstone Belt. Having acquired the previously-producing Troilus Project, the focus has been on advancing and de-risking the project.
Ongoing exploration has scaled the properties gold potential with a 142% increase to estimated Indicated mineral resources and a 350% increase to estimated Inferred resources.
The company completed a robust PEA in 2021 and is advancing engineering studies. A capable team is now on board to get the project into production, looking to exploit the open-pit to get cashflow.
Justin Reid, President and CEO of Troilus Gold, sums up Troilus' future,
"Our project, our team, and the Company as a whole, has never been in a better position. 2021 was marked by major technical advancements resulting from +90,000 metres drilled, which significantly increased the scale and robustness of our mineral deposit.
We look forward to these positive developments feeding into a new mineral resource estimate and Pre-Feasibility Study in the coming months. We're entering 2022 in a strong financial position, with several de-risking milestones ahead and a strong team as focused as ever to deliver one of the best projects in the North American mining landscape. We're certainly very optimistic about Troilus' future."
We like the Troilus story, with major cheap funding possibly available from the Quebec government. There's a step-by-step plan, with grades steadily improving. We wouldn't be surprised to see the share price quickly return to its peak of $1.30 to $1.40. If you plan to be in Gold (with strong exposure to Copper) next year, you should seriously consider Troilus.
Treasury Metals Inc. (TSX:TML)
Treasury Metals Inc. is a gold exploration and development company holding assets in Ontario and British Columbia. The new management team is here to build a mine. They have done it before and aren’t here to just promote a story. The Ontario-based Goliath Gold Complex is 100% owned by Treasury and has completed its environmental approval process with permission to proceed on final authorisations and permits. Treasury also holds 100% interest in mineral claims constituting the Lara Project on Vancouver Island in British Columbia.
Jeremy Wyeth, President and CEO of Treasury Metals, looked back at 2021,
"2021 has been a busy and successful year for TML. We ... (released) a PEA that combined the Goliath and Goldlund properties which showed solid economics ... raised capital to embark on the largest drill program in the company's history ... built an experienced team ... that will take us through 2022, where we expect to update our resource, complete a PFS and start the FS while continuing with the permitting... We are very happy with the progress made in 2021, and ... we look forward to the new opportunities and challenges in 2022 as we progress the Goliath Gold Complex to a construction decision in 2023."
With a new team in place, following years of share price decline, the company is seeking to return to the market in Q1 to confirm resource figures. With a team of mine builders, this company has become interesting again. Two-thirds of the way through drilling programs, this is a credible investment story. Watch for the resource confirmation and a production plan end-Q1.
6 Companies to Watch Out For in 2021
American Lithium (TSX.V: LI) (US OTC: LIACF) (Frankfurt: 5LA1)
American Lithium Corp. is a Canadian based company developing world-class lithium projects in the Americas while owning one of the largest undeveloped uranium projects globally. The company owns the TLC claystone lithium deposit in Nevada, close to the Tesla giga-factory. Having acquired Plateau Energy Metals, they are advancing the Falchani hard rock lithium deposit and the Macusani uranium deposit in Peru.
The Macusani deposit is a well-timed acquisition with many options available to American Lithium, with a sale tempting in the current climate. The company may lead operations with the Falchani deposit, with technical extraction decisions pending on roasting versus acid leach. The company has cash but needs a further $25m to $30m to fund the next three years.
Simon Clarke, CEO of American Lithium Corp, was upbeat about the company’s past 12-months,
“2021 was a transformational year for American Lithium: we (made) big strides in the development of our large-scale TLC project in Nevada, … our strong corporate performance … resulted in a strong stock price which provided us with the ability to make the well-timed, highly strategic acquisition of Plateau Energy Metals (bringing) us the high grade, world-class Falchani lithium deposit as well as the world’s 5th largest undeveloped uranium project at Macusani, both in Peru.
2022 will build on this progress with a maiden PEA planned for TLC, updated PEAs for both Falchani and Macusani and significant drilling at all Projects. It is also the year that we will look to move Falcahni into the feasibility phase of development.”
The company has good leadership and a rising share price, thanks largely to the uranium project. A feasibility study for the lithium deposits is now needed to inform the market better, and we need to see a decision on the uranium. With plenty of fundraising options available, this company is one to watch.
Neometals (ASX: NMT)
Neometals is an innovative company developing opportunities in minerals and advanced materials needed for a sustainable future. Their current focus is on the energy storage industry, with a strategy of working with strong partners to develop and de-risk long-life projects while integrating down the value chain to unlock value. The company has three projects at the advanced evaluation stage and a mineral exploration portfolio.
Neometals’ most advanced project is a lithium-ion battery recycling project, recovering cobalt, nickel and other materials from spent or damaged lithium batteries. They have a pilot plant and are signing with partners to exploit the technology. These partners are bringing in cash, infrastructure, and established networks.
Their lithium refinery project plans to supply lithium hydroxide to the battery cathode industry, with a life-of-mine option for 57,000 tonnes per annum of 6% spodumene concentrate from Mt Marion. An MOU is in place with an Indian partner.
The company has the Barrambie titanium and vanadium project, one of the world's largest high-grade hard-rock titanium-vanadium assets.
Chris Reed, Managing Director of Neometals, commented on how the company had fared in 2021,
“Neometals went into 2021 advancing multiple opportunities across the battery and electric vehicle supply chains. The Company tackled the challenges of 2021, and came away with a more focused strategy, more cash at bank, more creation of shareholder wealth, more commercial partnerships and greater project certainty. Neometals goes into 2022 poised, with commercial recycling operations in Q1 and all 3 core projects achieving decision points in the calendar year.”
Neometals is a smart business model that is currently making money, with highly technical management who knows how to help the market understand what they do. Their operations will produce high-purity vanadium while operating in the lower 10% of the cost curve, while their share price is closing the year four times higher than it's open in January. Neometals is a company to pay attention to.
These experts believe that investing in vanadium is worth another look.
Canada Nickel (TSX-V: CNC)
Canada Nickel is a Toronto based company advancing the new Crawford nickel-cobalt sulphide discovery. This project has large-scale potential and is located in the established Timmins mining camp adjacent to major infrastructure. They've also launched the wholly-owned NetZero Metals Inc to develop the zero-carbon production of nickel, cobalt, and iron. They aim to advance the next generation of high-quality, high-potential nickel-cobalt projects to support the electric vehicle revolution and feed the stainless steel market.
Canada Nickel has recently reported closing 18 transactions consolidating 11 properties in the Timmins area. This deal is a significant opportunity with potentially ten projects within the new area. Crawford is already in the top-ten largest projects globally, and this announcement suggests they are positioning the company to interest mining majors.
CEO Mark Selby is upbeat about 2022,
"Canada Nickel continued its aggressive advance in 2021 with a strong PEA in May and kickoff of a feasibility study expected to be completed late next year. Following up on the PEA, they've put out a whole series of great releases highlighting a 50-100% increase in resource, significant recovery improvements, and most importantly, demonstrated potential for carbon capture, which could make the mine a truly zero-carbon producer which sets the stage for a massive increase in the NPV of the Crawford project in the feasibility study.
As 2022 unfolds, expect a strong combination of more demonstrated value uplift as the company completes its feasibility study and exploration results as they start to demonstrate the district-scale potential of their land package!"
With considerable cash, a large strategic investor due to invest soon, and they plan a feasibility study in 2022. Couple the NetZero low carbon initiative with access to nickel and cobalt, and this is a very attractive investment
The share price is already up to $3.40 on the announcement of the strategic partner, and we can expect more to come. Five dollars would not be surprising. A first-class opportunity.
Elemental Royalties (TSX-V: ELE)
Elemental Royalties is a Canadian-based royalties company that operated privately for three years before listing in July 2020. They had six royalties at the time of listing but have recently signed a deal with Australian-based mining and metals company, South32. The new deal adds three substantial royalties at an excellent price of $55m. While initial money raised was expensive, significant cash flow started in 2021 and will quickly grow, allowing a refinance.
We like this company, they've been quick to focus on revenue, doubled the company's size, and we feel a refinance will be the next step. The Managing Director is young but intelligent and has made some shrewed moves. There'll be more to come in 2022.
EMX Royalty (TSX-V, NYSE: EMX)
EMX Royalty Corp. organically generates royalties through low-cost acquisition and early-stage exploration to build value. They then partner with companies to advance the projects, with EMX retaining a royalty interest and receiving pre-production payments. The company also purchases royalties from other parties and makes strategic investments to fund operating capital for their business.
The company recently announced the purchase of the royalty portfolio from SSR Mining. The portfolio consists of 18 geographically diverse royalties, with four assets at advanced stages of project development. This deal is a game-changer for EMX, potentially bringing in considerable revenue.
It's a smart acquisition, aligning with EMX's strategy of leveraging its in-region expertise to identify opportunities. While the exposure to Turkey has left some investors nervous, EMX has good experience in the region. The advanced projects will begin to flow revenue for EMX in Q2 2022, and Q3/4 should see good revenues. A cleverly structured and layered company with a great leadership team, EMX is worth consideration.
Maverix Metals (TSX, NYSE: MMX)
Maverix Metals is a mining royalty and streaming company headquartered in Vancouver, Canada. Founded in 2016, they acquired a package of 13 mining royalties and precious metal streams from Pan American Silver and were listed on the TSX Venture Exchange shortly after.
The 2021 Q3 results for Maverix were good at $14m, with circa. $55m for the year. 2022 should show revenue growth, as the company has been deploying capital recently, having done some deals. Following a 1% dividend, Maverix is more of a growth investment but lacks a narrative to the market outlining that strategy. The overriding issue is share liquidity, with 75 to 80% of the shares held by financial partners and institutional investors.
Valerie Burns, Maverix Metal's Manager of Investor Relations, had this to say on the company’s year:,
"Maverix had another successful year in 2021, expecting to achieve 31,000 GEOs, marking the 5th consecutive year of record GEOs for us. We look forward to continued growth in 2022 as we enter the year with over $160 million available for future transactions and several upcoming catalysts in our portfolio driving significant organic growth for the company."
Maverix Metals is a good company, well-led, and investing conservatively.
Vox Royalty (TSX-V: VOX)
Vox Royalty is a precious metals royalty and streaming company. It has a portfolio of over 50 royalties and streams spanning eight jurisdictions. The company was established in 2014 and has since built unique intellectual property, a technically focused transactional team and a global sourcing network. Since the beginning of 2019, Vox has announced over 20 separate transactions, acquiring over 45 royalties.
Additional to precious metals' royalties, the company has underlying exposure to various commodities, including base, battery, and certain bulk commodities. Its portfolio spans four continents, but with 80% in Australian and North American assets. The company has a record of buying assets with significant near-term growth and development catalysts.
Vox is a very efficient company, disciplined, and building for the future. They buy well, but not large deals, and they have a steady growth. Vox is one of the better royalty companies. It would also be good to see a big and meaningful deal or two to drive interest in the the share price, particularly given their strong fundamentals. Expect a lot of M&A activity in the royalty space in 2022.
Bannerman Energy (ASX: BMN, OTCQB: BNNLF)
Bannerman Energy is an Australian-based uranium development company. Their flagship asset is the Etango Project, located in the Erongo Region of Namibia, 30 kilometres southeast of Swakopmund. The Etango tenements hold a large-scale uranium mineral resource and ore reserve. Etango was the subject of a detailed feasibility study (DFS) for 20 Mtpa in 2012 and an optimization study in 2015.
The study estimated the project capital cost at US$793m, a figure disproportionate to Bannnermans market capitalization and unsuited to prevailing market conditions at the time. The company is now pursuing a streamlined and accelerated 8Mtpa development called Etango-8. A pre-feasibility study (PFS) was completed in August 2021, with a DFS planned for completion in September 2022. With scaled-down production on a near-surface ore-body, capital costs have reduced to US$274m, with lower operating costs from reduced stripping ratios. The smaller project will still deliver large volumes of 3.5Mlbs per annum to market.
We’re a big fan of Bannerman Energy, as they offer solid numbers from a world-class resource. If you’re interested in investing in Uranium, you should consider this company.
CanAlaska Uranium (TSX-V: CVV)
CanAlaska is an exploration stage company that buys and explores mineral properties in Canada. The company focuses on the Athabasca basin area of Saskatchewan, exploring uranium and copper/nickel deposits. Of the sixteen projects operated by the company, two are significant. These are the West McArthur Project and Cree East projects in Saskatchewan.
CanAlaska is a conservative company with confidence in its strategy. After many years of a share price moving sideways, the company has a new, capable, young team. They've had a good year in 2021, locking JV partners in place for their nickel and copper projects.
On the past year, Cory Belyk, CEO & Executive Vice President says,
“2021 was one of the most successful years for CanAlaska and its shareholders. We were very busy deploying our hybrid project generator model with new property deals completed, new land acquisitions realized, and new uranium discoveries on three of our Athabasca Basin uranium projects. We stayed focused on advancing our West McArthur ‘42 Zone’ discovery successfully intersecting additional high-grade uranium mineralization and extending the zone.
We made a new polymetallic uranium discovery at our 100%-owned Waterbury South project near Cameco’s Cigar Lake uranium mine. Our new joint venture with Denison Mines intersected multiple zones of uranium mineralization in the very first drilling program at our Moon Lake South project. We are very well funded and we will be advancing each of these projects, and more, in 2022.”
The company's three uranium projects are promising, with one quite significant, so expect to see another JV allowing access to capital to move forward. Having raised $11.5m this year, expect them to start drilling in 2022. We like CanAlaska and feel they're one to watch in 2022.
Energy Fuels (NYSE: UUUU)
Energy Fuels is a producer of uranium and vanadium and is an emerging player in the commercial rare earth business. The company has production capacity, licensed mines and processing facilities, and in-ground uranium resources. It boasts diverse cash flow-generating opportunities, including vanadium production, uranium recycling and rare earth processing.
Energy Fuels has recently valued over CAD$1.7bn and entered into an agreement with Consolidated Uranium Inc. (CUR) in October 2021 to sell a couple of their non-core assets.
The addition of the Consolidated Uranium operations will ensure feedstock availability to Energy Fuels' White Mesa Mill. The mill aims to produce 1.5 - 2 million pounds of U3O8 per year. The company has also engaged with Carester SAS to prepare a scoping study to develop a solvent extraction rare earth element separation circuit at the White Mesa Mill.
The production of value-added rare earth products will be a large contributor to the company's cash flow in the future, with Chalmers believing the high margins show promise.
Mark Chalmers, President and CEO of Energy Fuels, commented on 2021 for the company,
"2021 was an exceptional year for Energy Fuels, as we began commercial production of a high-purity mixed rare earth carbonate – a product more advanced than any other company in the US. Our vision is to become a large-scale producer of advanced rare earth products, including separated oxides and certain rare earth metals and alloys in the next few years while being in the lower cost quartile globally."
A lot is happening for Energy Fuels through 2022, particularly in the rare earth expansion. This business will be of considerable value to the company, offering high margins, with many JV partners lining up to talk with Energy Fuels.
We feel they need to step away from the juniors and sign with a large operator. Even with it’s $1.7bn valuation, there’s still a lot of room for growth, making this an interesting opportunity for investors.
Global Atomic (TSX: GLO)
Global Atomic is a Canadian resource company advancing the large, high-grade Dasa uranium deposit in the Republic of Niger. The company also benefits from the dividend stream generated by its share in Turkey's Befesa Silvermet zinc concentrate production facility.
The Dasa project has a world-class orebody at $2 per lb in the ground and a 50-years supply. Global Atomic has the expertise to develop it into a producing mine, with the process well underway and feasibility numbers to be released by the end of the year. In the meantime, Global Atomic is getting contractors organised to start excavation in February 2022. Camps are being prepared, and offices have been secured.
CEO Stephen Roman has this to say about the future,
"Global Atomic achieved its planned milestones in 2021 and started construction activity at the Dasa Project ahead of schedule. We expect another great year in 2022 as development of this exceptional uranium asset continues and as the world enters a new era for clean and reliable nuclear energy!"
The company's main aim is to get yellowcake available by January 2025 and is currently in discussions with utilities. Roman is aggressive in his projections but has hit them all to date. There's a lot of momentum building, and Global Atomic is worth watching.
UEX Corporation (TSX: UEX)
UEX Corp. has made significant discoveries, developing new and existing uranium and cobalt deposits in the Athabasca Basin. The company has four flagship projects.
The West Bear cobalt-nickel project is a shallow, open-pit amenable and high-grade cobalt-nickel deposit in the eastern Athabasca Basin, remaining open in all directions for expansion.
The Christie Lake property in the eastern Athabasca Basin is only 9 km northeast of the McArthur River Mine, the world's largest uranium mine. The property is host to significant historical uranium resources within three known deposits. UEX currently holds a 65.55% interest in the project in a joint venture with JCU (Canada) Exploration Company Limited.
The Horseshoe and Raven Deposits located in the eastern Athabasca Basin are close to existing mining infrastructure, roads, and power. UEX is currently evaluating the use of heap leach recovery to improve the economics of these shallow conventional open pit and underground amenable deposits.
The Shea Creek property holds one of the largest undeveloped uranium resources in the Athabasca Basin. The Shea Creek deposits remain open for expansion, with it being one of the first discoveries in the newly emerging Western Athabasca Uranium Camp.
UEX has an experienced team that knows the Athabasca Basin intimately. Their focus is on invigorating their drilling programme through 2022. The drilling will focus on Horseshoe and Christie Lake, with Christie Lake of particular strategic relevance given its untested corridors and zones.
Their investment proposition revolves around UEX's inventory of uranium, expansion of the ore base, and adding value per tonne. The UEX share in 2022 price will pivot on the success of the exploration programme. A company to watch.
The who's who of uranium.
How will it affect investors?
Schwazze is the largest vertically integrated cannabis company in Colorado, with Justin Dye as Chairman and CEO. The company is in an early stage of development, leading the charge in the professionalism of the cannabis industry. Schwazze covers farm to retail, producing 50% of its product while heavily investing in retail stores.
Dye considers the cannabis industry will, in time, surpass that of the wine and spirit industry, with Colorado predicted to do $2.5bn of business next year. The company is currently valued at $100m, with Dye having invested $45m of his own money. He predicts a business of $500-600m in Colorado, with plans for a $1bn business through statewide expansion.
While cannabis has seen a boom and bust cycle in recent years, we're impressed with Justin Dye and his assembled team. Dye knows retail intimately, previously having built Albertsons into a $60bn company.
These people have the experience to know good acquisitions, they are clear and coherent on their strategy, and they're pursuing aggressive M&A targets. The company is revenue producing, with a wide range of products. Schwazze is one of the companies that has impressed us most and is certainly worth consideration for 2022.