Two New 10 Bagger Calls
We apologise for missing last week’s Weekly Wrap; Phuketguy’s birthday celebrations and other more urgent matters let things get ahead of us. We are now taking on member @scribe who will help do the Weekly Wrap in future. This week’s is a bit longer because it covers two weeks and much to say:
Highlights of the Week
The highlights of the last two weeks were:
We called Firebird FRB.AX - the new IPO starting to trade on the ASX in mid March (19th) as our third official new10 Bagger this year.
Last week we announced DNX.AX as our fourth 10 Bagger call for the year. It is a strong buy at these levels (see below).
In trying to organise a placement for everyone in our next 10 Bagger call, word must have slipped out, and the stock ran up 20%. Therefore we are backing off a week or so to let it come back to our buy-in target. Then we’ll move on it again.
Several interesting new multi-baggers were called by members.
Our membership is growing healthily as is the club, now with over 350 members on our main Discord site.
10 Bagger News
Danakali - DNK.ax
Last week we made our latest official 10 Bagger call DNK, a company that owns the world’s largest, cheapest to mine and best resource of SOP (sulphate of potash), a fertilizer.
A comprehensive bull case analysis appears here: http://10baggerclub.com/uploads/2021/02/Danakali_40c_to_$4.00_20210228.pdf
After three months of analysis and wrangling to try to get more members set to take out a big seller in the market, it suddenly came to a head, when we heard another group in London were about to buy the block off the seller. So we had to press the button and suddenly move fast, using only some of the bigger members who were set up to take the block crossing in just a few hours notice.
We did it then immediately called DNK as a 10 Bagger. It shows how much JP Morgan selling had been suffocating the price because, after we bought them out, DNK immediately jumped to over 60c, surprising us all!
DNK is a larger stock than we normally call as a 10 Bagger - it has 320 million shares out and had a market cap of AUD 125 million when we called it. We chose a large stock this time for two reasons:
- We like and understand the story and think it is very undervalued.
- We felt that many members could participate in and get set without the price jumping too high.
We see any price under 60 cents as dirt cheap for this SP. As it is a big company, it will not move up so rapidly, but it can move with alot of us in it.
As a condition of taking out the JPM block, we pushed management for some changes within the company that shareholders have been asking for a long time.
African Finance Corp (an $8 billion bank) areDanakali’s largest shareholders after they put in AUD 30 million money at 60c for 16.6% of the shares. They have also provided debt finance toDanakali of US$100 million along with the $12 billion giant Afreximbank, who have also committed US$100 million.
We are hoping the last USD 100 million financing required for start-up capex should happen soon, and this stock can move significantly higher.
We are also aware of three groups who may make a bid for the company which - if it happens - may give us all a quickish exit. If not, we see it going up over 3$ in time, and we see limited downside from these levels, despite the political risk of the asset being in Eritrea.
Holding up well during another bad week in the markets, DNK finished at 55c for the week.
DNK’s Takeover Potential
The project being developed byDanakali is so enormous and with a 200 year mine life that ultimately we sense a fight for control of the asset may start soon:
- Eurochem, who have the off-take agreement with DNK, would certainly be interested, and we believe should probably move first.
- The government-backed Saudi conglomerates know how huge this nearby asset is, so we feel they could move to take it and start a bidding war.
- That could force Chinese interests to have a crack too, as we know they desperately want the project.
- Then possibly the Canadian potash giant may take a look, or a major food group like Nestlé may also join in.
Became our first 10 Bagger of this year. We called it at USD 5,465 last March, and it recently hit a high of USD 58,142. We see no end to BTC’s rise and can see it surpassing the market cap of gold within a couple of years. We expect the price to be over USD 100,000 by year end. It remains a strong buy for us.
BTC hit its high on February 20th, which was exactly the official starting date of the club last year! That meant that we had 8 official 10 Baggers in our first year from 13 calls. This is the best single year we have ever done for 10 Bagging. But last year was extraordinary with the market conveniently crashing just after we started the club, and then racing straight back up in a few months with a new bull run in commodities starting at the same time.
Although the market still remains hot, please do not expect us to be able to repeat that performance each year. In our view 3 to 4 decent 10 Bagger calls a year is ample for members to live prosperously. But we’ll of course go for more if we can - and keep trying to make hay while the sun shines.
Our 4th official 10 bagger call for this year, this new IPO is expected to start open trading on the ASX as per the prospectus on 19th March. Try to be ready to grab some within the 20 cents level.
We will talk to the main guy behind the newco, our next 10 bagger proposal, next week and see if we can’t get a placement done for all. It is a very delicate business,as word has leaked somehow and the stock already ran up on us last week by 20%., So we have had to walk away for a while but we also don’t want another case like on DNK jumping up without a lot of members in it if we can help it. We want as many members as possible to get set as low as possible. But that’s easier said than done, especially now as word of the 10 Bagger Club spreads in the market.
The drills are now spinning into the huge deep EM anomaly showing below their existing gold/copper resource in Brazil. We’re not sure when the first drill results will be announced, but we would recommend buying some more MEI shares in the next few days. Dr. Tunks the CEO reckons the chance of a major strike first drill hole down is low (maybe 10%), but then lowering the EM surveyor down the hole to get 2D images should greatly add to their knowledge. So the chances on the following holes get much better. They are currently drilling three 500 meter holes.
As Tunksy says, if they hit what they suspect/hope is there, “this stock could be a 50 Bagger”, but if not the results should provide some excitement for the market. However if they drill 3 duds (as happened on their other Brazil property a year or so ago), the SP could retreat a bit. It’s risky backing drilling, but due to their other proven assets, we see the risk reward ratio here as worth it.
Mandrake are getting ready to do a big promotion pre their drilling next month. With Chalice’s nearby Julimar site still hitting it out of the park, we foresee MAN could even run as high as 12 to 15 cents pre-drilling.
And again a warning in risky exploration plays: Please remember to use 10 Bagger money management techniques in the above stocks. When it’s going well, sell a few shares and try to get your original stake back with some left to “free-ride”.
But selling is usually harder than buying, so to help here are two pieces of advice I’ve learned:
Don’t be too greedy. Take your risk off the table and “free-ride” - don’t worry about “Chinese losses”. A Chinese loss is if you get out at 12 and it goes on up to 16 and you beat yourself up about losing the last 4. If you’ve made money, be happy. There’s always another deal to play in.
For me the most important piece of advice in this game is - “Sell them when you love them & Buy them when you hate them.”
Element 25 E25.ax
Amidst a global pullback in most stock markets, E25 managed to close at $1.905 Friday, up 8.5% for the day and up over 20% for the week.That is a new closing high.
The company gave an update midweek that construction was close to completion at their prized Butcherbird manganese project in western Australia.Next will be ‘dry commissioning’ (a practice run) for the first half of March 2021 before their planned first ore processing before the end of March!
This is a very exciting milestone. This company has achieved so much in 10 months since we called it a 10 Bagger at 11c last April. It reiterates the importance of backing good management.
Whilst mentioned regularly by our good friends (and 10 Bagger Club members) in The Gold Report dergoldreport.de, Germany’s best known resource newsletter, our German members got E25 written up late last week in Der Aktionar magazine, Germany’s leading stock advisory magazine.
E25 has been amazing, now up over 1.650% in 10 months - it has essentially been making those who bought 160% per month on average! If it makes it to $11 over time, as we expect/hope (after the much awaited JV for battery purity MN) - then E25 could become a 100 Bagger! … and we may need to change the club’s name!
King Island Scheelite KIS.ax
The news here is the CMFO (federal government) just launched their new fund for grants to “critical metals” - that fund is the one discussing giving KIS the grant (not loan) of AUD15 to 20 mill AUD, which is 21 to 28% of its market cap in free cash. When that happens we are confident this stock should move to trade in the 30+ cents range. The issue is it may now take till late March or April before the grant is formally announced. If we get any more info nearer the time, we will let you know when we think it’s time to collect up a few more. It won’t be too long off we think.
Three other points on KIS:
- We have had indirect confirmation that the US Embassy has now contacted the company and discussions are underway that may end up with the US arranging to off-take directly. If that is announced it could make this stock fly.
- We are aware a big European fund is collecting this stock in the low 20s. So It’s unlikely to fall much below 20 cents in the near future, in our opinion, before it takes off north again with the next grant. But if it does, pile in and buy. I know I will.
- The last few weeks I have been making money almost risk-free by taking advantage of the arbitrage in converting the KISO options. Each day I sell shares then buy back the cheaper options for 2 to 3 cents less. Ie: sell a share at 23 cents buy an oppie for 10 cents, then pay 10 cents to convert it and make15%. It also helps give the company cash. As long as the two markets are out of sync, anyone can do it - Don’t look a gift horse in the mouth.
There has been such a host of interesting multibagger calls by members, it’s become somewhat overwhelming. Like trying to drink from a fire hydrant. Unfortunately the committee have all been so flat out recently - that we haven’t even had time to look at most of the new members’ calls. We apologise for that.
We love so many good new ideas. Our problem for now is how to analyse them. We are looking for any members who may want to study them a bit and make a list of best potential 10 Baggers. Anyone else interested please contact us by direct message: contact either Cmack, Wattomagic, Snowman or Lunu to let us know if you can help.
Official Multibaggers Channel
We are thinking about adding a new channel called “official multibaggers”, for those potential MB stocks we endorse. This may make it easier for members to figure out what to look at themselves - because now it’s a bit like trying to drink out of a fire Hydrant! As we state picking 10 baggers and sticking with them is the heart and soul of what we do. But of the few multibaggers we have got involved in so far, here’s some info, as several members have recently have asked about them:
Bryah Resources BYH.AX: We still like this stock a great deal, and expect that it should be sitting at a 30 mill cap not a 9 mill cap. We don’t want to make a call or move on the stock till the company is ready to go drill its Windallah project. This was meant to be soon, but to be honest, the resource market in WA is so hot right now that they are having trouble to find drill rigs to employ and are having to wait 5-6 weeks to get them. That’s the hold up now. So all those who hold or took the placement, please be patient. We can see at least a 300% rise in this SP coming. It’s only 3 months since we took the PP. Also if you see the stock fall below 6 cents, it’s screaming buy.
The stock I mention below we got into mainly to show good faith with two other groups who have invited us to work together with them on certain stocks (and vice versa). We said we’d buy some, and some of us have. They both still say they will move them higher. We are watching and waiting to see if they can walk the walk. Anyway here’s what we know:
- Comet Resources CRL.AX: This company is supposedly going to be promoted soon by Assad Tannous and his group (big Twitter following). We are informed that soonish a new big copper asset in Oz will be put into the company, and then it should move significantly higher. I am holding my shares (I bought at 2.2 cents) and waiting to see. At only AUD 16 million market cap, I don’t see much downside by holding, and with the popularity of copper there could be good upside. We’ll keep you informed if we hear anything new.
Just a quick doff of our caps to Mr. Bigballs Stoaty and his Invictus IVZ.AX which is already up 100% this year. We wish you luck Stoaty and hope you make truck loads.
As for the other multibagger calls - no time to look closely this week - we can discuss them next week.Keep the ideas coming, and we’ll find a better way to present the info on Discord.
For ETH there is a correction going on, and I’m buying more almost as I write. I’m also going long more Cardano ADA, which could well 10 Bag from here despite its huge recent rally.
I believe there are great opportunities now for the next few months in some of the smaller altcoins, but let’s leave that discussion to the Discord site next week.
Silver and Gold
Gold continues to crap out in price. Down 20% in the last 7 months from its August highs. Why? Despite being a perfect year and economic conditions for gold to run, my own personal belief is simply that its thunder is being completely stolen by Bitcoin, a much more perfect, finite store of wealth.
Silver: Things appear more bullish for silver, the half precious metal, store of wealth and half industrial metal hybrid for the new green era, and it continues to look much more bullish to me. But still the corrupt coterie of 8 banks keep depressing the price by shorting the paper. It is a ridiculous state of affairs. But it’s been going on for 30 years. Physical delivery for March on Comex is going to be interesting. I still hold some silver stocks as I still believe the silver price is going to have to suddenly break higher. That may only happen when the likes of Apple, Samsung, Toyota, Tesla and all the new solar companies simply can’t buy enough physical silver for their phones, cars and new-age power grids.
The main points being discussed by committee and members last week were:
We have agreed that when any new 10 Bagger call is made, we shall not post it anywhere like Hot Copper/Twitter/Reddit/Weechat for at least a week - to let the paying members have the best chance to get set or to do their collecting.
We see the growing issue of who gets into new 10 Bagger calls first without pushing stocks way up and getting the ASX onto us, or being accused as usual of being spivy pump and dumpers, WSB types, etc: is only going to get worse with more members and more wins. And we’re working on the best solutions, which we can discuss more on Discord next week. We think we have found a very good solution longer term.
Our hero stockbroker and member young Hugh of Mac Equity in Perth (the man who brought us KIS!) is happy to take new clients from amongst 10 Bagger members - and more importantly he has found a solution for any members who are having trouble to get certified as a ‘soph’ (sophisticated investor) - to take private placement, etc. Please email him to find out more.
Lastly as membership grows healthily on Discord, we have decided to increase prices in incremental amounts as we hit certain number targets to limit numbers and hopefully to improve the quality of investors (don’t take that personally members already in!) But we’ll grandfather in members forever at the price they first joined as a loyalty benefit.
We are, for example, currently at 351 members on Discord; at 500 members, the price will increase to 150 or 200$; at 750 members, it’ll go up again; at 1000 members up again, etc. So if you have mates who want to join at the current price, get them in sooner rather than later.
We also have many more followers on other media platforms for free. Like Twitter/Weechat/Whatsapp - that’s maybe 6,000 and growing very fast. Rest assured, the other media will always get sensitive info well after the core Discord group of paying members.
Please try to keep your Discord posts to the right channels. It makes it easier to compartmentalise the info for other members.
Lastly we have just added @Sailorlion as a committee member. He has been an absolute star since we started. He is helping us find a new Chinese 10 Bagger op and is also rapidly expanding our Chinese memberships and reach. His following as “Gold standard” on Twitter and via Weechat is growing rapidly. And we are maybe going to start a parallel Chinese group under him. As an example, he has just created the 10 Bagger research note for Chinese investors below to get them into DNK.
It’s nice to know when we invest in 10 Bagger stocks, we have the option to bring thousands of Chinese investors to buy into the stocks after us.
DNK is our first nomination to the rapidly growing Chinese arm. It will go out this week. We’ll follow soon with E25 and KIS.
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.