In my recent report, I talked about trends I’m seeing for gold and my expectations for a revival in exploration. In this report, I’m going to write about companies that I think are well positioned to take advantage of stronger gold and other metal prices.
Alset Energy (ION.V) is the first company that I’ve taken a board position, they were originally a sponsor that had a shakeup at the top and was going through a leadership issues not long after they became a sponsor. When they fell into this tough time in late 2016, I threw my hat in the ring to run the company and the board decided to put me in as the president and CEO. Since I took over the leadership of Alset, we have changed the board to bring in a strong team of people that I’ve worked with in the past to help me get the ship moving in the right direction. We have worked through the drill permitting, started drilling. One of the great things I like about Mexico is that it has a long history of mining, and Zacatecas is a key mining region for the entire country. I visited Zacatecas, Mexico in January and moved from Vancouver down to Zacatecas in February to be close to our projects and move them ahead faster. I fell in love with the place because it is such a mining friendly area, also due to the infrastructure all around our projects and that despite a long mining history it is still relatively under explored. We are currently drilling and I’m looking forward to the news flow that will come from the drilling program at our La Salada salar, and moving our other salars forward. Stay tuned for news from the drilling.
Advance Gold (AAX.V) is another company where I’m the president and CEO. I was approached by the Chairman while I was also contemplating taking over the leadership of Alset to take the helm at Advance Gold. He said he had a nice clean shell that needed leadership, and a new direction. Both Alset and Advance came together and here I am as the president and CEO of two companies. With Alset it is focused on exploration and development of lithium and potassium salars in Mexico and Advance Gold is going to be focused on precious metals. I’m fortunate to have a strong team surrounding me that will help me run both companies, plus I’m a hard worker so I don’t see anything holding me back from building two companies. With Advance we are really building from the ground floor up, my geologist is a living legend in Mexico, and has decades of experience exploring in Zacatecas, which is the most important region for silver mining in the world. He always reminds me that Nevada was called the Silver State and in the last number of decades has become a prolific gold producer as well. Zacatecas has the same kind of potential and I hope to have more to talk about on the projects front in the coming weeks.
Benton Resources (BEX.V) is a new pick that I added to the roster during my PDAC speaking engagement. It is run by the Stares family, they have been in the prospecting business for a long time and have put together an extensive portfolio of exploration projects. Two areas in particular have caught my attention. They have a fair amount of ground in an emerging area play on a large regional structure that has other big exploration teams involved that could get a lot of investor attention. But the key play I’m interested in is their Bedivere gold project in Ontario. At the PDAC they had some surface samples that were very impressive. I usually don’t get too impressed with surface samples, but with the kind of visible gold showing in their samples and the work they had done to strip down to the veins tells me they have size and grade potential to pay attention to. I’m looking forward to their drilling this upcoming season, they will be in there early to prepare for drilling and if the truth machine catches some of the rock like what they found in the surface samples they should have impressive high-grade gold to report.
Nevada Exploration (NGE.V) came to my attention from past shows I had done with John Kaiser. For fans of the shows with John and I, we are getting ready to start doing more of them again soon. When we talked about Nevada Exploration, I was intrigued by the method they are using to explore for gold in Nevada. A lot of gold has been found and mined in the exposed bedrock of Nevada, but not nearly as much from the covered bedrock which is just as prospective. Nevada Exploration has a great map on their website where they have all the Nevada gold mines highlighted and you can clearly see that much of the state with the covered bedrock has no dots on the map for mines. This covered bedrock is challenging to explore as it is not easy to get representative samples for exploration or to see through the cover. But Nevada Exploration is taking a new approach using water samples to help vector in on drill targets. It is much like in diamond exploration when using diamond indicator minerals to lead to where to drill. They have been very busy of late using a small drill rig to test for water samples at depth and also to try and understand the thickness of cover. It looks like they are getting closer to making a discovery and if they prove their methods once, there is an entire new frontier in Nevada gold exploration for them.
Premier Gold (PG.T) for the second year in a row has decided to be a member of my website sponsorship program and I’m very happy they chose to continue. I see the company as a go to stock for investors wanting exposure to gold stocks. The key reason is their impressive portfolio of projects that include exploration through to production and regardless of the project they are involved with they all seem to exceed expectations. Whether exploring for gold with some key land in Red Lake, Ontario through to the gold mines they have bought into they make impressive progress. They have bought into gold mines in the past few years and they always have an exploration upside and as the team is so talented at exploration they have really done well adding to the potential of their projects. The management team lead by Ewan Downie really are at the top of their class when it comes to execution. I also appreciate that they see a serious need and opportunities for companies wanting to move into the middle tier of gold producers. This segment of the gold mining space was bought out during the gold bull market from 2001-2011. This has created a phenomenal opportunity for aggressive and talented gold people to move into the middle tier level and have carte blanche access to projects that are too small for majors or need more exploration so the majors will sell them to smaller companies. For the smaller companies, they can be company makers and help them move up the ladder to becoming much larger gold miners. Premier Gold is well on its way down this path, they have been very good acquirers of projects and then top it off have exceptional execution on the exploration front. They are a core holding type company for investors wanting exposure to gold stocks and I think in the new gold bull market that started in early 2016 their best days are coming up right ahead of them.
Sabina Gold &Silver (SBB.T) I’ve had Sabina as a past pick and then recently added them again at the PDAC where I was a guest speaker. I dumped them as a pick after I picked them a couple times at well less than a dollar, the second time in my Outlook 2016 report. I pulled the plug on them when I decided to dump some of my picks in the summer of 2016 that had made big gains and also to make room for new picks. I was fortunate to get out before they ran into their big permitting issues with the Nunavut Impact Review Board (NIRB) and even though those are still ongoing I’ve decided they were too cheap and added them again at the PDAC. In addition to being cheap, I also can’t ignore that they have a world-class gold project that several majors would love to own. I’m still not optimistic that the NIRB will reverse their decision based on the appeal that is underway. I’m starting to think the best thing that could happen to speed the process along is for the NIRB to reject it again and Sabina just address all the concerns with the caribou and come back with a new permit application. I still have a hard time wrapping my head around the NIRB changing course based on the current application. I’m sure Sabina management won’t agree with this outlook but I’m just an observer with an opinion. I can imagine the Sabina team would like to see gold go much higher and their stock go with it and a major come along to buy them out and let then major worry about the permits. Which is the end game I see playing out sooner or later for Sabina.
Serengeti Resources (SIR.V) is another company that I talked about as a top pick in my speaking engagement at the recent PDAC. They have an exciting copper-gold project near Fort St. James, British Columbia. It has a very large resource that is a play on higher prices for copper and gold with an extremely large geophysical anomaly below the resource. Last year they drilled near the known resource and returned the thickest intersection of the highest grades yet and leaves it open for more exploration. The drilling near the resource was a pleasant surprise but the main reason I like their story is the large deep geophysical anomaly. They drilled an angled hole to try to hit the anomaly but didn’t catch the guts of it but it looks like they clipped the top of it. Their upcoming drilling season is getting close and they are gearing up to drill right down the throat of that big anomaly. When I say big, I’m talking of the magnitude of a Oyu Tolgoi kind of target. If they catch that target the stock should be under heavy accumulation and get a much higher valuation, based on their drilling last year I like their chance to catch a tiger by the tale this year.
Sirios Resources (SOI.V) is another of my website sponsors, I invited them to join my website sponsorship program after they had drilled into a high-grade thick intersection of gold. This came from their Cheechoo project that is right beside Goldcorp’s Eleonore gold mine in Quebec. Since they became a sponsor they have been very busy with drilling and have hit a lot of gold in several different areas of their project. This can be a bit of a positive and negative, it means that there is a lot of gold on their project, but it also makes it more challenging to find an area to focus their drilling to prove up a large and potentially feasible deposit. They have a lot of good people involved with running the company and with their drilling success they can use the people and drill results to refine their search for the best targets. I’m looking forward to their upcoming drilling, my hope is they are getting a handle on where to focus. They have different kinds of target including low-grade bulk tonnage targets and high-grade targets as well. I would like to see them focus in on the high-grade targets and leave the low-grade stuff for when gold prices are higher. Top quality Quebec gold projects tend to get good financing and valuations because the jurisdiction is one of the best in the world for mining. Keep an eye out for these guys, if they can focus in on the high-grade gold targets and pull off a series of them they will get a much better valuation.
Tarku Resources (TKU.V) is another sponsor of my website, they came to my attention back when John Kaiser and I were doing our Zombie Search and Rescue Mission shows. They came on our radar screen and management approached me because they were not happy to be called a Zombie Stock. I was impressed with them calling me and asking for a meeting so they could explain why they were not a Zombie Stock. After meeting them and doing homework on their key project in Quebec, I invited them to join my website sponsorship program. They came at me with an aggressive response to being called a Zombie Stock and I thought they would be equally as aggressive running the company and trying to drill their gold targets on their Quebec project. I’ve been disappointed that they haven’t raised money or done any drilling yet. But, just in the last couple weeks they pulled off an interesting deal that brought them a bunch of new exploration ground and also key geological exploration people to their team. I’m more hopeful now that they will be able to raise some money and have good targets to drill and the people that can help them have success with the drill rig. First things first, now that they have put together this new deal, I want to see them get exploration money so they can drill some targets.
Tudor Gold (TUD.V) is a sponsor of my website, they have experienced exploration people running the exploration and are founded by wealthy businessman Walter Storm. Last season they had success with the drill rig on more than one of their properties and they also built an all-weather camp. That work and camp have them well positioned to get in early for drilling into their projects up in the Golden Triangle of British Columbia. They have strategic ground near some of the important discoveries up in the Golden Triangle including Pretium’s high-grade gold mine that is moving toward production. One of their targets is along the same geological structure as Pretium’s mine, and I’m looking forward to seeing them take a stab at working on that target. They also have bulk tonnage low-grade targets in close proximity where other such deposits have been found, and they have other high-grade targets as well. They won’t have funding problems with Walter Storm as a large shareholder and founder of the company. I’m looking forward to their upcoming drilling program as I can easily see this being a breakthrough year on more than one of the irons they have in the fire.
Wolfden Resources (WLF.V) is a sponsor of my website and is the only base metals focused company that I follow. I’m very focused on precious metals these days as I think they have much higher to go, but I’m also a fan of high-grade metals, especially when found in a well-known area for these kind of deposits and mines. Wolfden has a discovery of high-grade nickel-copper-cobalt near Snow Lake, Manitoba which is an area with a lot of base metal mines. They can drill there in the winter from the ice and during the warmer months from land based targets. The company is very good at representing their exploration efforts and what they have found and where they are focused on drilling. I would highly recommend you visit their website, I’m so impressed with the way they present their story that when I was looking for pictures to put in my book Smoke Signals Investing they were the first company I asked for permission to use their images. I’m a big fan of companies that are good at presenting the technical aspects of their exploration work because it tells me they know what they are doing, especially with the drill rig. As they keep drilling to depth they are being lead to more exciting stuff, now they need some traps in the rocks where they can find large deposits of their high-grade material. I like their chances and are a company for all my audience to keep a close eye on, they have a very cheap valuation, a very good project and are run by the same team as is involved with Premier Gold.
Yamana Gold (YRI.T) is not the usual kind of gold stock I follow, they are a producer with several high-quality mines and a very solid portfolio of projects. They are a company that is in the middle tier that has the kind of projects that could move them up the food chain, especially in a stronger market for gold. I’ve called them a Rodney Dangerfield stock because they don’t get a lot of respect. But that is right up my alley, I like looking for under loved stocks and Yamana falls into that category. They are a leveraged play to higher gold prices with less risk than exploration stocks. I like the chances of gold going much higher, as I’ve mentioned in past reports I can see us in the early stages of a multiple year bull market for gold. As gold prices move up, Yamana will get a lot more respect and will significantly outperform its peers.
There you have it, my report on the stocks I cover closely. Many of them are sponsors of my website and I wish they all are. Regardless of whether I invite a company to be a sponsor of my website or to make them a pick, I use the same filter.
They have to meet my criteria of a company that I think is well positioned for a higher valuation, with quality projects that are not being properly valued relative to their realistic potential.
I’m seeing higher prices coming for precious metals and other commodities with strong supply and demand fundamentals and invite you to check out and do your homework on all the companies I follow.
If you haven’t bought my book yet, I would be honored if you would consider it, I wrote it so readers could get a better understanding of what I do with the reports and also to pass on lessons from the great mentors that I have had that taught me about rocks and stocks.
You can buy my book here.
All the best,
Allan Barry Laboucan
Allan Barry Reports
Alset Energy (ION.V)
Advance Gold (AAX.V)
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.