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Portfolio Takes a Breather… But Still Plenty of Action!

December 11, 2020

Highlights

  • Element 25 hit another all-time high of $1.72
  • Chalice trading at a new high of $4.44
  • Tesla hits a new high of $650
  • Mandrake back at 10c
  • Bitcoin trading at US$18,700
  • SE1 rose to 13c but finished at 9c
  • KIS dips below 10c

The portfolio, and the markets in general, took a bit of a rest through the week. You have to admit, it’s been a pretty good run…

In the lead up to Xmas, we expect volumes and interest to fade off a bit. The whole Oz market starts winding down from now till about mid-Jan.

Remember 10 baggers don’t come around so often. Research, conviction, commitment and patience are key. We’re looking at new companies all the time. We don’t need to trade in and out of 20 different stock ideas each week. Just get a few good ones and hang in with them.

We remain focussed on finding 4 or 5 stocks each year: Endlessly researching to identify them, then Investing heavily when we do, and making 10 X our $money each time in the process.

New Placement

This week some of us took up a new private placement of shares (PP) Bryah Resources (BYH.ax) at 6c a share with a half a free option attached to buy one new share at 9c. These options can’t be issued till mid-January as BYH needs to make a prospectus so they can trade separately on the exchange.

BYH closed up 12% for the week at 6.7 cents.

BYH is not an official 10 bagger call - it’s just a higher-risk exploration punt. But we do think it’s share price has a good chance to double and possibly treble in the near future. The company has $7.5 million cash and two promising tenements- one already has 42,000 oz of gold proven on it. Yet BYH is still only valued at $10 mill market cap today. Therefore, we feel it’ll be hard to lose much given the cheap PP price we entered at.

Just to recap our thesis for their potential share price rally: BYH have done some shallow drilling (up to 100 Mts) on their Windala site in WA. They already hit gold and copper but not in economic volumes, so we know something’s there and coming from a source nearby.

Their EM (Electromagnetic survey) shows a big anomaly deeper on the site. They will drill into it early next year. Sandfire Resources (SFR), a $1 billion company with a gold processor plant nearby, has only 18 months of ore supply from their own mine nearby. So if BYH hit anything half decent in their anomaly, we believe SFR will be all over them to buy out or farm in on the project under very beneficial terms.

Two other companies with nearby tenements that went to mine STK (Strickland) and AUR (Auris) were both re-valued up towards $50 mill mkt cap pre-drilling. STK drilled a dud and fell back to 25 mill cap. AUR hasn’t drilled there yet and stits at 40 mill cap.

BYH only has a $10 mill cap today! So if the market behaves as it did before (a big if) BYH could also get to a 40- 50 mill cap. (That would be 30 - 35 cents a share) – plus 20 or so cents on the free options.

But the harsh reality is that most exploratory drilling doesn’t work. We give them a 30% chance of success at best. Therefore we suggest that if BYH stock goes to 12-15 cents then sell or offload enough to get your money back and take a free ride. Because if they do hit good the stock could fly.

Element 25 - E25.ax

E25 announced an offtake agreement for their stage 2 Mn production expansion which took the share price to an all-time high of $1.72 last week.

They were also given a new upgraded NPV of 1.1 billion by the independent consultants who prepared their RFS (Revised Feasibility Study) out this week. The stock currently has a market cap of only 208 million.

Wattomagic and the club committee called this stock as a 10 bagger back when it only had a market cap of $13 million in March. Great call Wattsie.

Bear in mind- the new RFS (Revised Feasibility Study) they put out last week only includes their proven JORC reserves, not their indicated reserves (partially drilled so they know it’s there but not drilled out enough to be Jorced – (proven by a pre-set programme of drilling accepted by the ASX). If they do more drilling on their indicated so it becomes “proven” their NPV could almost double again.

And all of this is just off 20% of their overall resource!

Plus, it does not include anything for their real potential earner which is to develop battery grade Manganese which they can do due to the excellent purity of their Mn. We are hoping for some good announcements about their battery grade opportunity soon.

On Friday, they fired out more good news, announcing all final approvals had been granted, enabling site works to commence. This company should start mining and earning money by Q2 next year at an initial rate of around 30 mill AUD P.A and hopefully growing from there.

We still remain very bullish on E25 despite it having 10 bagged already. If all things remain steady in the market (ie: if Mn price doesn’t collapse or Dow doesn’t implode by 1000 points etc.) Then we see this stock going well through 5$ a share and probably higher.

Chalice (CHN) Moved higher (again) after finalising their oversubscribed $100m capital raise at $3.75. most of us are free-riding in this stock now. Its Julimar PGE (platinum group metals) nickel/copper tenement in WA is a gift that keeps on giving.

The stock closed the week at $4.34 and a with a 1.4 billion mkt cap. We first called CHN in March at 23 cents and only 60 mill mkt cap. Another excellent 10 bagger that looks like it’s got further to run. If you’re not riding for free by now we would advise it. It feels better. And we advise you to always keep your speculative powder dry for the next one as we never know when it will appear.

Mandrake - MAN.ax

Finally announced they had received their exploration licence!

And the stock went down? These things happen from time to time. It's called “buy the rumour sell the news”. The stock closed at 9.4 cents, still 780% up from our April 10 bagger call on it at 1.2 cents. The stock recently traded as high as 13 cents. Drilling should commence in Jan 2021 and we expect the stock to hopefully run up a bit more before that.

Some 10 baggers have already sold out enough for their free ride. We recommend that holders at least get your original money out before they announce their drill results (probably in early Feb). If they drill a duster this stock will quickly fall with little chance to sell. But again if they hit good mineralization this stock has miles higher to go and could be CHN no 2. So at least get your original money out while the going’s good and free ride it.

King Island - KIS.ax

Traded most of the week in the 10c range. We’re a bit frustrated on KIS. They have their new RFS (revised feasibility study) ready to announce but the ASX geos have been so busy they have delayed them posting it till they have time to check it. We hope it comes out this next week. In it we expect to have the consultants give it a new NPV of around AUD 200 million or maybe more. KIS current market cap still remains below $ 30 million.

The other frustration is waiting for the government to issue the hoped-for letters for the grant and loan for the mine development. Their meetings have apparently gone well and were informed all is agreed but now we’re waiting on a govt not a private sector schedule.

We don’t see any big price action happening before those announcements come out - which we expected by now. Then the stock price should move to over the 15 cent level.

But it’s a great opportunity for any new members to buy in. We still call this stock to 30-40 cents and the free options to 20-30.

Meteoric - MEI.ax

Was steady at 6.3c. This week MEI dropped a potential ripper of an announcement about their Juruena gold mine in Brazil. Whilst Aussies are watching this stock more recently for their Palm Springs(PS) mine. The fact is their PS mine was really just something the Aussie management took on to fill their time when they left Brazil and came home before covid shut down. Meanwhile their Brazilian team has been working away. MEI management (and some members here) have long suspected that their big surface deposits of copper/gold (200,000 oz gold drill located already) were coming from some large resource deeper down.

This week MEI announced that their IP/MT (deep ground electromagnetic survey) results showed a huge high-chargeability anomaly consistent with a deeper porphyry system. And this anomaly is massive - 2km long by 1.5km. So this small company could be sitting on something vast. They will hopefully drill into it in January. So again, fingers crossed. MEI remains a buy or hold for us.

Bitcoin - BTC

Sitting around the $18,000 level poised to breakthrough $20K ? For us BTC remains a strong buy on any correction below 20K, like right now this week.

Members’ Calls

Stockbroker Steve G from Pamplona Group in Perth offered us seed capital at 10c for Canadian uranium explorer 92 Energy (92E). 92E holds uranium exploration assets near Cigar Lake in Canada and will IPO early 2021. Members not on Discord missed the opportunity to take up the offer. It was gone in minutes!

Invictus Energy (IVZ.ax) holding steady at 6.1c.

Sensera Ltd (SE1.ax) We are still waiting on EUA (Emergency Use Approval) from the FDA in the States. Stock hit 13c but closed lower due to lack of news flow.

Duketon Mining (DKM.ax) who hold 5m shares in E25 finally moved from 25c to a 34c high

Disclaimer: No financial advice given. You are encouraged to do your own research (DYOR) on the above mentioned companies and their strategy/progress and make your own financial decisions.

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