Benzinga - by The Gold Report, Benzinga Contributor.
Source: Michael Ballanger 04/05/2024
Michael Ballanger of GGM Advisory Inc. takes a look at the current state of copper and silver, sharing some top stock picks. He also details his excitement that Michael Williams of Aftermath Silver is back in the game.
As all subscribers know, I selected copper as the premier investment opportunity in the metals arena in 2023 based on its role not only critical to the Electrification Movement but also to global growth, particularly in emerging markets.
Copper has traded in the $3.13-3.90 range for most of the past two years, with the lows occurring in 2022, shortly after the Fed embarked upon monetary tightening in July of that year. Recently, however, the compelling fundamentals brought about by the looming structural supply deficit propelled copper to new recovery highs above $4.00 and as of today, sits at a new high for the breakout at $4.194/lb.
Top Copper Picks
Selected as my top pick in the blue-chip arena for conservative growth, Freeport-McMoRan Inc. (NYSE: FCX) has been a stellar performer, up over 30% since I first introduced it to subscribers at $38.Along with FCX, I have been accumulating a basket of junior copper and copper-gold exploration issues that include Fitzroy Minerals Inc. (OTC: FTZFF) and American Eagle Gold Corp. (OTC: AMEGF) both of whose share prices have performed admirably in recent weeks.
Back in February, I sent another Special Situation Report on Colossus Resources Corp. (OTC: COLUF), whose Chilean copper-gold porphyry fit perfectly into the copper basket.
Aftermath Silver
In July 2019, I was approached by a longstanding colleague, Michael Williams, about the possibility of getting involved with his Aftermath Silver Ltd. (OTC: AAGFF) project, whose Chilean silver projects appeared attractive at the time.I participated along with a number of colleagues in a CA$0.08 unit financing that included a half-warrant at CA$0.12. Needless to say, that placement was a highly-lucrative investment for all parties as by January 2020, the shares were trading at CA$0.50 only to be bludgeoned down to CA$0.08 during the COVID crash in March 2020.
However, by January 2021, the shares had traded as high as CA$1.70 on average daily volumes exceeding 200,000 shares per day, with Eric Sprott taking down 19.9% of the issued capital.
My history with Michael Williams actually goes back to 2009 and his Yukon gold exploration company – Underworld Resources – which made the exciting Golden Saddle discovery only to be sold to Kinross Gold Corp. for CA$139 million (CAD $2.69 per share) in March 2010.
Williams has a habit of making investors money — and a lot of it — albeit the August 2020-March 2024 bear market turned many seasoned junior mining operators into "yesterday's heroes" as investor interest shied away from the space.
These are "early days" for the copper-gold bull, and Michael has been gracious enough to allocate a portion of the "Friends and Family" unit offering at CA$0.09 with a half-warrant at CA$0.135 exercisable for a two-year period. This offering is reminiscent of the Aftermath deal in 2019, as I see the tailwind of a massive copper-gold bull market that provided Michael Williams with the same ammunition that he had in 2020 when silver took off.
I will not provide commentary on the projects, but I will re-print a portion of the corporate deck that deals with the highlights:
A strong portfolio of copper-gold exploration and development assets in Chile and Mexico:
Illapel Project - Brownfield copper project in Choapa province, Chile
- Established mining area with excellent infrastructure & extensive mining activity
- Fully permitted for drilling with an existing mine on-site - Rio 27
- Ready drill Completely open along strike (over 1 KM in North and South directions) and at depth
- Several KM of areas of interest could provide strong additional drill targets while drilling progresses near the mine site
- Current mining operation has processed over 400,000 tonnes of ore with an average grade of 1.4% copper near surface
- Simple metallurgy and recovery of >90%. Could be amenable to direct leaching to produce fine copper on-site
- Highly prospective epithermal gold targets on surface grading up to 4 gpt
- Resource estimate of 2M tons (internal and non-NI 43-101)
- Manto-Type Stratabound deposit – Analogous to El Saldado, which is the largest Manto-Type Copper deposit in Chile with a total identified resource of over 200 million tonnes grading 1.35% copper
- Near El Espino Copper Project: Currently in construction with a $380 million valuation. Vortex's concessions and Rio 27 mine are less than 15 km from El
- Assembled & developed by the legendary geologist, the late David Jones, who discovered the famous Los Filos gold & silver mine (> 7M oz of gold and 55M oz of silver produced)
- Two large drill-ready high-potential copper-gold volcanogenic massive sulfide (VMS) properties (Riqueza Marina and Zaachila) – awaiting drill permits
- Very high-grade copper present in samples on surface - grading as high as 43% copper
- Potential Discovery Target: A large geophysical anomaly (Rhyolite Dome target) that is coincident with geology at surface (Felsic Dome)
- Over 3km of highly mineralized gossans with multiple high-potential drill targets
- Developed and exited exploration projects, including Underworld Resources, sold to Kinross Gold Corp (TSE: K for CA$139M)
- Exploration team (former BHP, Teck Resources) known for multiple discoveries, including Los Filos in Mexico (7M+ oz of gold and 55M+ oz of silver production)
- Recently signed the Definitive Agreement on Illapel copper project in Approval from TSX-V expected in coming weeks
- Ample geological evidence for extension of copper-silver mineralization beyond the Rio 27 mine, and for presence of epithermal-style gold mineralization at Illapel – these targets remain untested to-date
- 1st phase of exploration to include drill-testing of stratabound copper-silver targets and epithermal gold target with estimated start of drill campaign in April/May 2024
- Strong news flow expected in coming months
- Low market cap with opportunity for significant re-rating based on planned exploration in Chile
- Plans to raise visibility and to market the story to a wider investor base
- Community approval received at Zaachila project in Oaxaca, Mexico
Larson is known around mining circles as an exceedingly discerning geologist who shows great skepticism for most grassroots mining prospects. That Larson is a bull on Illapel provides a very strong tailwind for Michael Williams to perform his Aftermath-style magic.
As you can see, the stock price has been orphaned to the purgatory of bear market doldrums for most of the past two years, with the peak at CA$0.19 in mid-2023.
The offering is not a large one as the major funding is planned for next month. If you recall the modus operandi for Aftermath, it was only six weeks after Williams closed the "Friends and Family" offering in 2019 that he raised CA$3.3 million at CA$0.20.
I am taking a position in Vortex Minerals Inc. by way of this offering because I have had great success investing alongside Michael Williams. As they say in our business, "Go with the jockey, not the horse."
Copper and gold in 2024!
Important Disclosures:
This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.
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