We think the small resource stocks on our list have the best upside over the next 52 weeks
SmallCapPower | April 6, 2020: The COVID-19 stock market selloff has hit resource stocks, especially the juniors, particularly hard. In the future, though, consumers will still need, and want, items made from metals and minerals that need to be mined. That being said, we have dug up four small resource stocks we believe have big upside over the next year.
*Returns are based on closing stock prices as of April 3, 2020
Ely Gold Royalties Inc. (TSXV:ELY) – $0.67
Ely Gold currently has 37 royalties/stream with three producing royalties/stream. Significant upside could be realized from the Company’s 2% NSR on Wallbridge Mining’s Fenelon Gold Property in Quebec, which could commence production later this year. Eric Sprott and Rick Rule are significant shareholders and ELY is hoping to initiate a dividend program either this year or next. In a recent interview with SmallCapPower, Ely Gold Royalties CEO Trey Wasser said he expects the Company to generate nearly $4 million in revenue in 2020, with that number anticipated to double by 2022.
- % Fall From 52-Week High: 34%
K92 Mining Inc. (TSXV:KNT) – $3.13
K92 Mining is focused on exploration and development of mineral deposits located in Papua New Guinea. The Company’s main asset is the Kainantu Gold Project, consisting of two gold deposits. On February 20, 2020, K92 announced drill results, which showed an average grade of 6.4 g/t Au + 15.9 g/t Ag + 0.9% Cu (8 g/t Au eq) at 2.4m. The Company is expected to release a new PEA, which could indicate a possible resource expansion to ~5.0M-8.0M oz/Au, suggesting a ~ 300K oz/Au per year mine. On March 27, 2020, KNT reported record 2019 revenue of US$101.7 million and a yearly profit of US$32.5 million, in addition to AISC of US$680 per gold ounce. Given its high-grade gold results thus far, K92 Mining could end up being acquired by a large-cap producer (the property used to be owned by Barrick).
- % Fall From 52-Week High: 30%
Related: K92 Mining Stock Should Continue to Shine
EMX Royalty Corporation (TSXV:EMX) – $1.86
EMX has an extensive portfolio of royalties, properties, and equity positions spanning five continents, including the Leeville royalty property that covers portions of Newmont’s underground mining operations on Nevada’s Northern Carlin Trend. All of which contributed to the Company generating royalty revenue of $2.1 million in 2018. The ‘gem’ of EMX’s royalty portfolio, however, is the Brestovac royalty in Serbia that covers both the Timok Project’s Upper and Lower Zones, considered to be largest copper discovery in Europe. China’s Zijin Mining Group bought the project when it acquired Nevsun Resources for C$1.86 billion in 2018. This could create millions in future revenue for EMX once the Project is put into production, which is expected to begin in 2022. EMX Royalty had $69 million in cash as of December 31, 2019.
- % Fall From 52-Week High: 33%
Great Bear Resources Ltd. (TSXV:GBR) – $5.95
Great Bear Resources is a Canadian gold junior exploring in the Red Lake Region of northwestern Ontario. Its flagship property, Dixie, is located just south of the former Newmont Goldcorp operations, covering an area of 9,140 hectares. In May 2019, GBR reported 16.3m grading 26.9 g/t Au and 7m grading 44.5 g/t Au at the “Hinge Zone” at the Dixie project. Great Bear Resources’ early success prompted famed mining investor Rob McEwen, founder and former Chairman and CEO of Goldcorp, to take an 8% stake in the Company. GBR continues to benefit from a tight capital structure – just about 46 million shares outstanding and the Company asserts that it is fully funded for drilling for the remainder of 2020 with plans for up to 300 holes. Great Bear Resources currently has about C$27 million in cash on hand, most of which ($21 million) is earmarked for drilling in 2020.
- % Fall From 52-Week High: 38%
Read: ‘New’ Red Lake Gold Rush
Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.
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