Post Conference Case Musings: Part 1
Since I have been to more conferences in the last couple of months than I almost count I thought I would write down some summaries/impressions etc. Basically some musings on some cases that I have typically been impressed by. The ones that might not be my cup of tea and/or where I can’t see an at least decent Risk/Reward bet are probably not going to be included.
Generally speaking I think there are quite a few juniors out there that could do 2X-5X over the next 12-36 months without the help of higher metal prices based on internal catalysts vs current Market Cap. Personally I think today’s opportunity set is the best I have seen in the sector overall since I started. This is obviously only possible thanks to a sentiment that appears to be much worse than the fundamentals of the sector thus leading to attractive Risk/Reward situation in quite a few juniors.
Note that these are not Buy recommendations or investment advice. I am a shareholder of most of the companies mentioned, or I might become a shareholder, of which makes me biased. A few are banner sponsors as well so twice biased. Make up your own mind and only buy a stock if YOU understand why you are buying it.
Musings
Kirkland Lake Discoveries
The exploration potential at Mirado looks better than what my earlier impression was. I think this has a shot of becoming a significant discovery and of course it does not hurt that it is in Canada. If I had to guess I would expect Mirado to grow for years to come. I view it as a good HODL-case for anyone who likes Canadian exploration/growth stories that already have pretty much a bird in the hand already. Its a post discovery with the potential to go into the tier 2+ bracket over the coming years in my view.
MCAP: C$75 M
Sonoro Gold
A case like Sonoro is pretty much my favorite type of case today from a fundamental perspective. The sentiment in the sector is much worse than the gold price and economics of operating gold mines. At $4,000 gold the margins on a $2,000 AISC producer for example is still higher today than in the history of the sector before the year 2024. The market might not care but if Sonoro gets their permit in the not too distant future and can build their starting operation then I would expect it to be trading quite a bit higher within 12 months (Cabral Gold is a good example of what the Second Lassonde curve can do at $4,000 gold). The kicker is that I am almost as excited about the district scale exploration potential after the new land acquisition as I am with the idea of actual production. Put those two together and I view it as one of the most asymmetrical cases I currently know of at today’s gold price. I can see a >$1 B company in a couple of years. What most people get put off by Sonoro is their share count and warrant situation which is quite understandable. That is why I really am keen to see them get into production because I would expect a big revaluation despite the usual headwind of a large amount of shares outstanding.
MCAP: C$68 M
Excellon Resources
The exploration potential att Mallay seems quite a bit better than I had anticipated. This makes a successful start up that much more levered since it would potentially open up significant self funded growth within/around an operating mine in that case. At this MCAP that is certainly not priced in so I can see quite the Reward in case the Risk side of the equation does not materialize. If so then the very impressive Tres Cerros target become pure, “risk free” optionality. If the ramp up does not go well, whether for technical reasons and/or metal prices decline quite a bit more, then all this exploration potential might be locked up of course. Anyway, at C$105 M in MCAP I think the upside potential is obvious and substantial if some things go well or very well.
MCAP: C$107 M
Borealis Mining
Its a small scale producer with obvious leverage to the price of gold. Beyond that the company has an advanced project in Sandman which they are pushing forward towards development. It is quite a small project but one that a junior could be able to build and at today’s gold prices it looks very attractive on paper according to the latest PEA. Lastly they have exploration potential around the current Borealis mining operation as well as the grassroot project “Big Balds”. All projects are located in Nevada. A blue sky growth trajectory would be something like the Borealis mine making money and they extend the mine life there, followed by the “Sandman” project getting developed, and/or the company making some form of discovery at “Big Balds” which is 10 km west of Kinross’ Bald Mountain mine.
Summit Royalties
As the name suggests it is a royalty company. A new, aggressive and seemingly undervalued one. The portfolio, valuation, growth trajectory and a credit facility up to around half the MCAP together with the quality of the team as well as insider ownership, makes it a remarkably un-boring royalty company. It looks cheap on paper compared to peers and at the same time it probably has much better odds than its peers to aggressively increase in value to boot. Its mostly held in the HODL-portfolios as a bet with lower risk and an attractive chance for some solid returns.
MCAP: C$132 M
Mayfair Gold Corp
I think this is one of the easier bets in the sector overall. The company already has over 4 Moz of gold in Canada, is fast-tracking a phase 1 operation scenario, has incredibly smart and experienced people on board (including mine builders), and insiders own a big chunk of the company. They have the expertise and seemingly the financial backing to actually develop their project. A bird in the hand (ground), smart people, and a lot of incentive to see a higher and higher share price is a rare combination in this sector. If they execute and gold stays around these levels even the phase 1 production scenario would be worth a lot while the team has much higher ambitions than that longer term.
MCAP: C$215 M
Metallic Minerals
Metallic Minerals has been a sleeper for quite some time due to permits for La Plata taking longer than hoped. Its easy to think its been quiet due to not much going on with the company but I would note that Newmont Mining is the largest single shareholder and participated in the latest financing which took place in June. Ergo, it has recent third party validation from the world’s largest gold mining company. La Plata is a porphyry exploration play with already confirmed porphyry hits to the tune of 816 m at 0.41% CuEq in Colorado, USA. There is a whole swath of targets to test and it sounds like some of the best targets are yet to be drilled even. This is a shot at a tier 1 porphyry district as evidenced by Newmont’s involvement and with a MCAP of C$41 M the upside is obvious in case things fall into place. Metallic also has a higher grade silver project in the famous Keno Hill district, which could be a flagship project in itself, as well as some income from its royalties on alluvial gold mining.
MCAP: C$41 M
Mithril Silver & Gold
This was one of few companies I didn’t even know exist before the Nordic Funds & Mines conference. I was thankfully pleasantly surprised and put it on my “Need to do more research” list. It is an advanced gold/silver explorer in Durango, Mexico with an intent to push towards production as quickly as possible and explore the district potential at their high-grade Copalquin project. The project has already seen 90,000 m of drilling and has a decent starter resource already on the books. The team seems competent and board/management owns 15% of the company which is nice to see. There are quite a few options and warrants out with half having strike prices around current levels and half having strike prices quite a bit higher. With the top 20 shareholders owning 70% of the shares I would hope the warrant overhang will not be too material.
MCAP: C$34 M
Xtra-Gold Resources
This is a quite unusual junior. The insider + Friend & Family ownership is extremely high at 50%+ of an already tight share structure. Furthermore the company had income before tax last year to the tune of US$6.5 M from “Community Mining Projects” and has been buying back its own shares. In addition to this the company has around 1.3 Moz of resources in the ground and several exploration targets across 55,905 acres of land. The project is 50 km from Zijin’s Akyem mine which they acquired from Newmont in 2025. The company is building on the recently updated resource with in house diamond drill rigs as it is aiming to unlock what it sees as a multi Moz district. I think the bet is basically to aim for Xtra to grow, in a less dilutive way than the norm in this sector, to a multi Moz asset that gets acquired.
MCAP: C$98 M
