Prospect Generators offer the benefits of reduced risk, greater discovery opportunities, and less shareholder dilution
SmallCapPower | March 2, 2020: Prospect Generators are becoming more popular with junior resource speculators, as these companies have increased their chances of a resource discovery by simultaneously advancing multiple projects using funds from joint-venture partners. Prospect Generators offer the benefits of reduced risk, greater discovery opportunities, and less shareholder dilution, among other factors, compared with other types of resource exploration companies.
Today we have identified what we consider to be the Top 10 Canada-listed prospect generators. Our ranking system is based upon factors such as past stock price performance and future growth prospects. Calculated returns are as of the closing stock prices on February 28, 2020.
- EMX Royalty Corporation (TSXV:EMX) – 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 $74.1 million in cash as of September 30, 2019.
- 1 year return +32%
- 5 year return +137%
- Ely Gold Royalties Inc. (TSXV:ELY) – 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.
- 1 year return +300%
- 5 year return +1209%
- Lara Exploration Ltd. (TSXV:LRA) – Lara is a prospect generator active in Brazil and Peru. Its CEO, Miles Thompson, led prospect generator Reservoir Minerals from a $1 million entity in 2009 to a C$512 million acquisition in 2016. Miles has an approximate 8% ownership stake in Lara Exploration. In a recent article, Matt Geiger wrote that Lara’s 30% free-carry at Planalto, 2% NSR at Corina, and 49% interest at Liberdade each on their own have the potential to be worth multiples of Lara’s current market capitalization. As well, there is a soon-to-be cash-flowing royalty at the Celesta copper-gold project in Brazil. Lara Exploration is also expecting C$2.2 million in partner payments during 2020.
- 1 year return +32%
- 5 year return +55%
- Azimut Exploration Inc. (TSXV:AZM) – Azimut holds the largest mineral exploration portfolio in Quebec, with interests in 27 properties and 11,334 mineral claims in that province. The Company caught the market’s attention on January 14, 2020, when its stock price soared 200% in a single day following the release of drill results on its Elmer Property in Quebec, which included 3.15 grams per tonne (g/t) gold over 102.0 metres. Newsletter writer Thom Calandra wrote recently that Azimut’s management considers these results to be among the most significant gold exploration results in the James Bay region since the 2004 discovery of the Éléonore deposit by Virginia Gold Mines (currently owned and operated by Newmont).
- 1 year return +282%
- 5 year return +420%
- Golden Valley Mines Ltd. (TSXV:GZZ) – Golden Valley has an approximate 44.8% equity interest in Abitibi Royalties, which pays a quarterly dividend of $0.03 per share; an approximate 16.5% interest in International Prospect Ventures (International Prospect now holds 100% of eight properties in the eastern Pilbara of Western Australia) and; an approximate 37.2% stake in Val-d’Or Mining. Also, GZZ owns a 2.5% to 4% Net Smelter Royalty (NSR) on Sirios Resources’ Cheechoo Gold Prospect in Québec, in addition to a 15% free-carried interest and a 3% NSR on the Lac Barry Gold Prospect, south of Osisko Mining’s Windfall Lake Gold Project in Quebec.
- 1 year return +32%
- 5 year return +164%
- Aurion Resources Ltd. (TSXV:AU) – Aurion’s focus is in Finland, exploring its flagship Risti and Launi projects in addition to advancing joint ventures with Kinross Gold, B2 Gold, and Strategic Resources. The Company is well capitalized with about C$20 million in working capital as at September 30, 2019, with strategic investors that include Kinross Gold (a 9.92% equity stake), Eric Sprott (5%), and Newmont (3.8%).
- 1 year return – 15%
- 5 year return +1920%
- Globex Mining Enterprises Inc. (TSX:GMX) – Globex Mining has its fingers in many pies – 190 projects including 55 royalties. The Company projects annual revenue of C$1.5 million to $2.0 million per year beginning in 2020 from its Mid Tennessee Zinc Royalty.
- 1 year return +10%
- 5 year return +33%
- Auryn Resources Inc. (TSX:AUG) – Auryn is involved with seven projects, including two flagships: the Committee Bay gold project in Nunavut and the Sombrero copper-gold project in Peru. The Company also has a second project in Peru, Curibaya, which is thought to have potential based on surface sample results released late last year. Auryn Resources says Curibaya is located on the margins of a world-class porphyry and epithermal belts. Newmont has a 11.8% equity stake in AUG.
- 1 year return – 2%
- 5 year return +11%
- Teuton Resources Corp. (TSXV:TUO) – Teuton owns interests in more than 30 properties in the prolific “Golden Triangle” area of northwestern British Columbia, seven of which are currently under option to third parties. Teuton Resources also owns royalties in 10 different areas of the Sulphurets Hydrothermal System, in close proximity to Pretium Resources’ Brucejack-Snowfield property as well as Seabridge Gold’s KSM property.
- 1 year return +179%
- 5 year return +388%
- Strategic Metals Ltd. (TSXV:SMD) – Strategic is a project generator with a portfolio of more than 130 projects, including 112 wholly-owned, five joint ventures, six under option and eight royalty interests. Notable large interests include 42.3% of GGL Resources Corp.; 36.3% of Rockhaven Resources Ltd.; 24.3% of Precipitate Gold Corp.; 17.7% of Silver Range Resources Ltd.; 8.7% Trifecta Gold Ltd.; and 6.4% of ATAC Resources Ltd.
- 1 year return +8%
- 5 year return +18%
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