Radar Screen Pick – A Junior Mining Zombie Stock Awakens
Usually when looking at stocks, I’m looking for the ones that can hit it out of the park from what they have in the ground. It is always based on drilling that starts the process of me looking at them. I’m looking for stocks that can reach my big goals which are to either become a mining company or get taken over. I’m ready to start a new list, I’m calling it Radar Screen Picks.
These are stocks that are purely for traders that are looking for cheap stocks they can get in on the ground floor, well before the elevator starts to move. These are dirt cheap picks that are unloved, or for sure under loved and ready for some new dance partners. They just need someone like me to come along and help them find a new audience of investors.
I have my first pick to add to the list and it hit the Radar Screen from the Zombie Search and Rescue Mission show.
Shine Bright Like a Diamond
Fjordland Exploration (FEX.V)
I started in the mining business in 1993, in investor relations, for a small junior mining company that had a small claim block right beside the ground held by Diamet Minerals where they found the Ekati diamond mine. It was the early days of the diamond rush in Canada and it was very exciting.
It has been a long time since I’ve seen that kind of excitement in the diamond space. Canalaska Uranium (CVV.V) is a stock that John Kaiser and I broke their new efforts into diamonds on a show the day after they announced their new diamond ground.
Not a lot of newsletter writers or market commentators cover the diamond space, John and I are two of the only ones and have been doing it for years. When we broke the story it gave them an immediate audience of investors that follow diamonds. The stock has been moving up ever since, recently, they just took off when it moved from under a buck to a high of $1.55.
They were a sleepy little junior that all of a sudden came to life in mid-February when they announced they had staked a group of claim blocks based on geophysical targets prospective for diamond exploration. I usually want to see a lot more than geophysical targets from a government geophysical survey that was done on 400-metre line spacing.
But there was an interesting spin to this exploration story, the rocks in that area are basically very magnetically quiet. So any very deep magnetic anomalies very well could be kimberlite. If you follow the direction the glaciers move, around 100 km away are kimberlite indicator minerals. It sure is a long distance but indicator minerals can move that far from the kimberlite they came from. It is a possibility not too out there.
So why not just pick Canalaska? After all, they have a deal with De Beers and they have already done some limited surface sampling. Actually, the surface sampling news, not news of finding something mind you, just that they took samples made the stock pop big time.
After Canalaska announced they had staked up 70 some geophysical targets, based on the government geophysical survey and before they did the deal with De Beers. Fjordland went in and staked up all the ground around Canalaska’s claim blocks. Now, Fjordland actually has a far larger land package.
When you go back to that 400-metre lines spacing geophysical survey and things get a lot more exciting for Fjordland. In diamond exploration when they are flying the lines on a grid that are 400 metres apart, it is easy to miss the target.
Usually in diamond exploration, before drilling they need to do much tighter lines, ideally down to 50 metres, that will light things up much more nicely. Then they follow that up with ground geophysics to further define where to drill.
This makes things really hopeful for Fjordland. If anything was missed from that widely spaced government geophysical survey, it could make Fjordland’s ground much more valuable when tighter spaced geophysics are done.
As a stock play, this gets really interesting for a few reasons. If there is a kimberlite cluster up where Canalaska staked all their ground, based on a wide spaced geophysical survey, there is no way they got all the kimberlites.
The Canalaska guys have no experience in diamonds, they saw geophysical targets that looked interesting and looked like they could be kimberlites. They are first to tell you that, they are a uranium prospect generator company. But they saw these unusual anomalies, staked them, and it was compelling enough for De Beers to come in and do a joint venture on the project.
Recently, Fjordland hired Mark Kolebaba, a very experienced diamond exploration geologist that I’ve known for many years. He understands diamond exploration, he has run a diamond exploration company in the past and found kimberlites. He is a sharp guy when it comes to diamond exploration.
I found this company when John Kaiser and I were doing one of our Zombie Search and Rescue Mission shows. Actually, when we were deciding the concept of the show, they were the example of a Zombie Stock that could come back to life.
They came up twice on the show, both times, John and I gave it a thumbs up as a Zombie Stock that could come back to life. And I’m now ready to make them an official pick in my report.
I’m looking at this mostly as a stock play because we are so early in the process with this new diamond exploration area. It is really cheap at under a quarter, when De Beers and Canalaska start drilling, and if they hit certain milestones FEX.V will join the party.
We already saw a week or so ago when Canalaska announced some surface sampling had been done their stock went nuts and Fjordland popped big as well.
As a trade goes, there will likely be opportunities to sell some FEX.V on the De Beers and Canalaska diamond exploration excitement that will spill over onto Fjordland. Think like a trader on this one, trim into increased diamond enthusiasm to get your cost down. This is risky enough if market hype gives you a chance to take your cash off the table, do it. If you don’t, and this does a round trip then you only have yourself to blame.
I can feel that diamond rush kind of enthusiasm coming for Canalaska and Fjordland. Looking for dips in CVV to buy a little will give you a ticket to their show, but Fjordland gives the potential for more bang for the buck. Who knows, with more work they may prove to have the best ground.
I’ve been hooked on diamonds for a couple decades, it is always a lot of fun when a new area comes into play. We are there for these two companies, really early days, but it has caught the attention of the diamond stock investors.
All the best,
Allan Barry Laboucan
P.S. my reports are for information purposes only, before making any investment decisions it is important to do your homework and speak with your financial advisers.
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