VIDEO - Simon Popple: Chalice Mining Case Study - Early Signs of a Big Move

Finding top performers in the junior resource space is tough, but it’s not impossible. Knowing what to look for is key, and Simon Popple has devised a set of criteria to help investors out. 

He writes the Brookville Capital Intelligence Report, and his BRIDGE system breaks due diligence down into six main parts: balance sheet, resources, infrastructure, diversity, grade and exploration.

Popple used this strategy to get in early with Australia-focused Chalice Mining (ASX:CHN,OTCQB:CGMLF) — he explained to the Investing News Network that he first discussed the company on his website when its share price was at AU$0.125, and it eventually rose to more than AU$12.

What stood out to Popple about Chalice? While the company checked all the BRIDGE boxes, he noted that what he really noticed was its market value compared to its cash in the bank and assets on hand.

“When I first wrote (Chalice) up, the market value was AU$41.3 million and they actually had AU$21.3 million in cash. Essentially that meant that their assets were being valued at about AU$20 million, which I thought was incredibly cheap,” he said. “So that sort of stuck out like a sore thumb — a small company with a value of AU$41.3 million having AU$21.3 million in cash I thought was very attractive.”

Speaking further about Chalice’s assets, Popple noted that when he was first introduced to the company he felt they were being undervalued by the market — at the time, the company had land around Kirkland Lake Gold’s (TSX:KL,NYSE:KL,ASX:KLA) Fosterville gold mine, and also had a property in Quebec.

“I thought, well you’ve got a company with a lot of cash, two fantastic projects — and that doesn’t even touch the size in terms of what really set them alight, which was Julimar,” he said. Julimar, a nickel–copper–platinum-group elements asset in Western Australia, has become a key focus for Chalice.

Popple acknowledged that the success Chalice achieved also required a fair bit of luck, but emphasized that market watchers who choose a strategy and stick with it will likely enjoy the best results.

For more from Popple on investing in the junior resource space, watch the video above. You can also click here to watch part one of the interview, where he discusses his BRIDGE system in greater depth. The website for the Brookville Capital Intelligence Report can be found by clicking here.

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Securities Disclosure: I, Charlotte McLeod, 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.