After sharing six junior mining stocks on his watch list at this January’s Vancouver Resource Investment Conference, John Kaiser of Kaiser Research took some time to chat again at Zimtu Capital’s Vancouver Commodities Forum.
In terms of the overall market, Kaiser believes that while the market may not be out of the woods yet, it has definitely turned a corner. “I think there’s running room for this bull market,” he said.
Here are the five stocks Kaiser discussed:
- Sirios Resources (TSXV:SOI)
- Arizona Mining (TSX:AZ)
- Peregrine Diamonds (TSX:PGD)
- Scandium International Mining (TSX:SCY)
- Uravan Minerals (TSXV:UVN)
Watch the full interview to see what he had to say:
INN: Several market watchers are saying that we’ve entered a bull market, what are your thoughts on that?
JK: Well, when we last spoke, in the third week of January, that was the bottom of the five-year bear market that began in 2011, and so far we have seen an uptrend with a couple of pauses but no reversal yet. There’s a couple of things driving the uptrend, one is gold is in an uptrend. It hasn’t done the usual thing of rallying in the first quarter and fading away in the second quarter. And there’s reasons to believe gold can head higher, and it doesn’t have to do with the traditional reasons such as fiat currency debasement and hyperinflation. It has to do with geopolitical uncertainty. It has to do with fear of negative interest rates. So these types of drivers for gold are real price drivers, so people are thinking, ok this is not one of these nightmare scenarios where gold goes to $3,000 because of hyperinflation, which leaves my project worthless because all the costs go right up with it.
And there’s a discovery dimension to it. Companies are doing exploration again, they’re making new discoveries and those work at the metal prices that we have. So that’s attracting audiences back. So I think there’s running room for this bull market. We’re not out of the woods yet, but I think we definitely have turned the corner.
INN: Ok. In light of that, I understand you have several junior mining companies that you’re watching. One of them being Sirios Resources , can you tell us about that?
JK: Yes. Sirios was one of the five I flagged in January, bottom fish companies I had not really talked about. It was seven to ten cents at the time. Since then they’ve raised five and a half million dollars, they’ve finished their winter drill program, they’ve attracted a substantial audience. They’re now parked at forty cents, they have a 10,000-meter drill program coming up, starting in July. And this is a make or break, they’ve developed a very big geochemically enriched gold system. Now they need to find out where’s the enriched zones? They have Osisko Royalties (TSX:OR) as an investor, Goldcorp (TSX:G) as a 19 percent investor. This thing, I’m hoping, worst case, becomes mill feed for the Eleanore mine of Goldcorp. In the best case, becomes something even bigger and better, in which case this little junior could do another 500 percent from the current levels after doing 500 percent since January.
INN: And what about Arizona Mining?
JK: Arizona Mining, back in January they were 35 cents. They were two million dollars in the hole. Since then they’ve raised 14 million dollars, now have nine drill rigs on the project, have reported an initial resource estimate. Which in my mind is even feasible when zinc was at eighty, eighty-five cents. I think this is a world-class discovery, probably several hundred million tons, they only need 60 million tons. Now the question is; what’s the combined lead-zinc grade going to be, and the silver kicker that supports a 10,000 ton per day mine. The stock is $1.75 today, so already up substantially. The project’s so rich, it’s got such a big metal budget, that there’s all kinds of other things they could still discover like copper skarns and so on. And if they start doing that well then the stock could even go into the five to ten-dollar range within the next twelve months.
INN: Ok. And Peregrine Diamonds?
JK: Peregrine Diamonds has been one of my long-term, spec value, hunter picks. And incidentally, both Arizona Mining and Sirius were bottom fish which were upgraded to formal, spec value, hunter recommendations. Peregrine Diamonds has managed to climb from 10 cents at the start of the year to, it’s currently at 20 cents. They are going to be giving us a preliminary economic assessment for the Chidliak project which I think justifies a stock price in the 40 to 60 cent range. But that’s only based on my outcome visualization, we need to now wait for the 43-101 event to see what numbers the engineers have come up with. The market is waiting for that. The stock could move abruptly if the numbers are along the lines that I imagine.
And they’re also in Botswana revisiting an old kimberlite field that DeBeers found which DeBeers thought didn’t really have much substance to it. There’s a longshot there. If they find something substantial in Botswana, it’s a whole new story. Market’s a bit tired with Chidliak, it needs to go to the next level of becoming a mine, but if they get a discovery play going in Botswana you get the best of two worlds.
INN: Ok, interesting. And what about Scandium International Mining?
JK: Scandium International also has been a spec value hunter recommendation for the past three, four years. They delivered their definitive feasibility study, they filed an environmental impact statement, they’re in the process of working on the mining permit. And of course, their plan is to produce 35 to 40 tons of scandium oxide within about two years. This would be three, four times what the world currently produce from byproduct sources. The market is still skeptical that there is offtake that’s going to absorb this, but the market doesn’t understand that there’s such extraordinary latent demand for aluminum scandium alloy. I would expect the company to have more off takes in place, construction, financing done by the end of the year, mining permit in hand and then it’s off and running.
A similar company, Robert Friedland’s Clean TeQ (ASX:CLQ) in Australia has already achieved a 200-million-dollar valuation for a similar project and they hope to have their definitive feasibility study out by the end of June. And both projects need to go into production. It’s very different from the rare earth space where every company stabs the other one in the back. In this case, the end users want two independent supply sources of a material that is critical to their commercialization plans.
INN: Ok, and what about Uravan Minerals?
JK: Uravan Minerals is my current favorite discovery exploration stock. They have a geochemical method for spotting uranium deposits that are 800,000 meters deep in the Athabasca Basin. It involves radiogenic lead isotopes that decay products of daughters of uranium, literally liberated by microbes that deep chewing away on it and then them working their way to the surface and clinging to the clay. Case studies have shown similar anomalies on top of Centennial, Cigar Lake, McArthur River and now the rumor is that the Footprints project underway between Cameco (TSX:CCO) and a university syndicate also has demonstrated. They have a target, similar scale, on Outer Ring, 100 percent owned, a geophysical survey underway right now. If it lights up with a conductor, in this type of context, they will raise the one and a half million bucks needed. And if they hit something with only forty-five million shares outstanding, this is the kind of stock that can give you those double digit prices that retail investors absolutely love. Fifteen cents right now.
INN: And finally, John, do you own shares in any of these companies?
JK: I own shares in Peregrine, Scandium International and Uravan.
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Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.