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Haywood Securities put out a preview of the AME BC Mineral Exploration Roundup 2015. In it, the firm looks at the state of the market and identifies four juniors on its shortlist.
The firm starts off by noting some positive sentiment in the gold and precious metals spaces compared to conference time last year, but states that it does not see as much of a recovery in the base metals sector. In that light, it expects investors to gravitate a bit more towards precious metals at the start of 2015.
Haywood also highlights lack of capital as an issue for juniors conducting grassroots exploration, noting that while almost a billion dollars were raised for gold and silver companies in January, the majority of those funds went towards “safer” juniors, i.e., those in production or with development-stage assets.
That said, the firm was able to find a few juniors for investors to “keep on [their] dial.” Those that made the list have “healthy balance sheets, with the capacity to deliver positive news, while avoiding the need to raise equity at dilutive prices.”
Of course, current darlings of the junior space such as Balmoral Resources (TSX:BAR) and Fission Uranium (TSX:FCU) made the cut, but Canada’s DuSolo Fertilizers (TSXV:DSF) is also on the shortlist. The Brazil-focused phosphate company transitioned to producer status last year and secured a sales contract for 40,000 tonnes of its Direct Application Natural Fertilizer with a large Brazilian soybean company.
The company’s flagship project is its Bomfim phosphate project in the Cerrado District of Brazil, which Haywood notes is “the world’s fastest growing agricultural district.” DuSolo also holds the Ruth and Samba projects in the same state, and Haywood states that both properties are also “considered prospective for high-grade phosphate.”
“We see 2015 as a year of further growth for the Company, through the expansion of phosphate resources at Bomfim via a 2,000 metre drill program, results of which will be incorporated into an updated resource estimate and PEA,” states the firm. “We also expect to see further updates regarding a plant capacity upgrade as well as news on new sales contracts as the 2015 planting season approaches.”
In terms of the rest of Haywood’s list, Fission is mentioned in part due to the excitement surrounding the maiden resource estimate for its Triple R deposit at its Patterson Lake South project in Saskatchewan, while Balmoral is highlighted for the exciting nickel–copper-PGM discovery at its Grasset property in Quebec. The discovery, which Haywood notes has “significant exploration/expansion potential,” is located to the east of the Martiniere gold project, which Balmoral is also advancing.
Rounding out Haywood’s top four is gold explorer Calibre Mining (TSXV:CXB), which currently has partnerships with B2Gold (TSX:BTO) and IAMGOLD (TSX:IMG) for projects in Minnesota and Nicaragua. Calibre also has an option agreement with Alder Resources (TSXV:ALR) for its Santa Rita copper-gold mine and the company wholly owns its Siuna project.
“These strategic partnerships with IAMGOLD and B2Gold have allowed Calibre to continue to deliver news flow through work funded by its larger partners, avoiding the need to raise further capital,” notes Haywood. “Therefore, despite only holding ~$2.6 million, the Company can afford to wait for market conditions to improve before raising more capital and/or conduct a share rollback.”
Certainly, it’s an interesting list for investors to take note of ahead of Roundup. Stay tuned for in-depth looks at Balmoral and Fission from geologist and former BHP Billiton (NYSE:BHP,ASX:BHP,LSE:BLT) Senior Research Officer Wayne Hewgill.
Securities Disclosure: I, Teresa Matich, hold no direct investment interest in any company mentioned in this article.
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