One stock that he was pounding the table at 15, 20, 25 cents is now trading close to $3
SmallCapPower | September 29, 2016: SmallCapPower spoke recently with newsletter writer Eric Coffin, editor of the Hard Rock Analyst, who discussed his outlook for the gold price and mentioned some junior resource stocks that he thinks are promising.
Related: Gold Price Has a Good Chance to Move Past US$1400 This Year, Says Eric Coffin
Mr. Coffin cautioned, though, that he’s not necessarily saying you should buy any of the stocks right now, because they’ve moved a lot, but these names are examples of companies that he likes. The first one was SilverCrest Metals (CVE:SIL). He’s known management for a long time – they’re very successful, very focused, and know how to find deposits. They want economic mineralization.
The original SilverCrest was taken over about a year ago by First Majestic, because First Majestic wanted its Santa Elena mine. They then spun out a new company called SilverCrest Metals.
“They were very adamant when they negotiated the merger that the Las Chispas property had to be spun out into this new deal, or they weren’t going to agree to the merger. That told me that Eric Fier, who runs the company, obviously thinks extremely highly of this property. That was good enough for me. I was pounding the table pretty much with readers. It was my ‘no brainer’ from about September to March. They have indeed hit some very high grade stuff. It’s got a very loyal shareholder base, because a lot of their shareholders are, well, insiders, but also people that owned the original SilverCrest. They’re very happy to just go along for the ride with Eric. Because of that, the stock’s trading at three bucks now. I don’t know that I’d be telling people to start buying it at three bucks. But this was a good example of one where I was basically pounding the table at 15 and 20 and 25 cents,” Mr. Coffin said.
Another company he talked about, which is drilling right now, is Northern Shield Resources (CVE:NRN). He added that this is a group that has specialized since the company was formed in looking for nickel-copper-PGE deposits in layered intrusions. It has always been the focus of Ian Bliss and Christine Vaillancourt that run the company. “They’re very good at it. They have a lot of respect from the majors. In the past, they’ve been able to do good joint venture deals on early-stage properties because they get a lot of technical respect.”
The Company has made a new discovery about a year ago called Huckleberry in the Labrador Trough. This is an area that, as far as they can tell, no one had ever staked here. What they discovered was a layered intrusion. There’s quite a bit of high-grade copper in grab samples at surface. “It’s a classic looking layered intrusion much like…the examples would be, say, Voisey’s Bay or Norilsk,” Mr. Coffin contends.
“Management of Northern Shield actually likes the adjoining properties that are called Sequoi and Se2 better than Huckleberry. They think those are actually the big targets. They hung on to 100% of those. I’m expecting to see results from Huckleberry in, say, a month maybe. They’re going to try to drill Sequoi as soon as they finish at Huckleberry.”
Mr. Coffin believes that because of the scale of these targets, if they hit something he thinks the market would get very excited very fast. “I started talking about it at three cents. It’s about 20 now. But I think it would go a hell of a lot farther if they actually hit something. It’s really got very large potential.”
He also likes GMV Minerals (CVE:GMV). It has a property called Mexican Hat in Arizona. This is an oxide heap leachable gold resource. It’s about 530,000 ounces currently. “I was actually attracted to this because of the metallurgy. When you’re working on a heap leachable deposit, metallurgy’s critical. These are low-grade things. If you can’t leach most of the gold out and if you can’t do it in an efficient manner, they just don’t work,” he said.
Mr. Coffin thinks the company should be starting a drill program soon that looks like it’s got the potential to add 100,000 or 200,000 ounces to it. “If they can find extensions or new zones in the flats the resource size potential for the project could be much larger. There are so few of these good heap leachable deposits around. If they can make this thing a bit bigger, bring the resource up from inferred to indicated, show that the metallurgy is as good as it appears to be right now, then someone will come along and take GMV out, I’m fairly comfortable about that.”
The final junior he mentioned was San Marco Resources (CVE:SMN). San Marco has entered into a partnership with GlobeTrotters, a private company, which takes remote sensing data like Landsat, ASTER, and applies their own filtering techniques and their own algorithms that they use to modify this data. And what they’re doing is they’re looking for hydrothermal systems, which is the ultimate source of pretty much all mineral deposits. And what GlobeTrotters does is use this data to try to find these alteration zones at surface.
GlobeTrotters is taking that methodology, and applying it to the entire state of Sonora in Mexico with San Marco. They’ve generated something in the order of 100 to 150 targets. “San Marco’s side of the deal is they’re the ones with the boots on the ground. They’re gonna go out and ground-proof things. If it looks like they’ve got something that looks interesting, they’ll stake it right away. If it’s on ground that’s already staked and it looks interesting enough, they’ll talk to the owners and try to do a deal … I expect them to generate a lot of strong targets.”
