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The Wrap: The 10 Baggers Strike Back

November 14, 2021

The 10 Baggers Strike Back

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November began a bit disappointingly for some of our 10 Bagger calls. E25, in particular, dropped following the numbers from its quarterly, while a few others such as KTG and FRB also drifted lower. But as many wise investors remind us constantly, this is a long game and patience is more often than not rewarded. Impressive rises from KIS and most recently DNK have breathed fresh optimism into the Club’s calls. A new 10 Bagger stock has also been called as we continue to ride the EV revolution. For more on this stock and our other calls in equities and crypto, read on.

Ragnar Metals Options (RAGOC.AX) – Target price 25c+ buy under 2.5c

Ragnar relisted on the market after a trading halt, with a couple of announcements - the raising for their Tullsta nickel project in Sweden, and the news of an acquisition of some huge new prospective lithium tenements has made it our latest 10 Bagger call. Due to some negative sentiment around the company’s nickel result delays in recent months, the stock hasn’t flown like other lithium acquisition announcements have done. This means there’s been plenty of opportunities for 10 Baggers to get set low in this one. Note the presence of Eddie King as a director - the same Eddie King on the board of EFE.ax who has a pending MOU with Chinese lithium giant Yahua.

We see these options 10 bagging from here much more easily than the head stock, but we like both counters. With an announcement on 1,350 km2 of strategic lithium tenements in one of Australia's most promising lithium regions being acquired by the company, we expect the price of both RAGOC (the options) and RAG to appreciate well in the short and longer term given the positive news in the global lithium market of shortages and rising lithium prices. The options expire in May 2023.

The shorter term plans for this company are to get the drill rigs up to the site as soon as possible (hopefully by January 2022). Given the world class lithium assets surrounding the properties and that it’s in one of the best lithium areas of Australia, we could expect the share price to rally pre-drilling to 15-20c or more. If so we would suggest taking some money off the table to try and free ride.

If the drill results are promising this share should move significantly higher, if not then the SP and option price could retreat for a while. This is an exploration play so be aware it is a highly speculative risk on investment but with limited downside and huge potential upside..

With Australia's two biggest lithium mines only 10 and 50km away huge and both the companies operating them market capped at over A$7 billion (PLS.ax and MIN.ax) and RAG in between, with larger tenements makes us think RAG’s current market cap of only A$15 million is way too cheap. RAGOC Chart

Industrial Minerals (IND.AX) – Target A$4 to $8, collect < 30c up to 40c

IND still sits at a very nice entry point for new buyers.

The market cap is still tiny, leaving scope for a huge jump when this thing starts moving. There have been three exploration licenses (>270km2) granted to date, covering poor yield pastoral
land - due to the substantial presence of white sand.Test results show exceptional SiO2 content of 99.9%, enabling IND to investigate Direct Shipping Ore potential, amenable to simple/low-cost off the shelf processing to wash and grade the sand. This will provide potential for sale as a high value premium product.
IND is also working with agronomists to improve the carrying capacity of areas providing farm owners with a higher cultivation and carrying capacity, or return to native vegetation. Whilst many members started accumulating it in the low 20s IND remains good to load up until 40c – but accumulate slowly, just take your time and buy on weak days.

This very tightly held company is expected to start moving upwards on further news this year and in Q1 2022. Our target remains between $4-8 on this share within 24 months. This is a potential 20 bagger ++, if all goes as hoped for.

IND chart below.

92 Energy (92E.AX) - Target price $2.60 buy under 80c

Already up 342% since our April call, this Athabasca Basin uranium explorer has held very steady during a turbulent time for uranium stocks. Investors wait patiently for the winter drilling season to commence where the company will look to expand results on its sexy uranium discovery in the fourth hole at Gemini, as well as their other targets. Any positive drilling news will light this one up even more. Then there’s the many macro factors that seem to be aligning the uranium stars. If these can continue to rally the spot price, watch out.

Elevate Uranium (EL8.AX) - Target A$1.60 collect on dips or pull backs below 60c

Not too much has happened with EL8 in the past few weeks since its Quarterly, as it has mostly gone up and down with the general uranium market. Massive upside to a U stock that boasts a potentially gigantic resource in Namibia. Like 92E, the low SOI can really move this Uranium stock which we believe remains very undervalued compared to its uranium peers.

Aura Energy (AEE.AX) – Collect up to A$0.25 Target price around A$1

AEE has fallen back from it’s highs since it went ex-option entitlement. The new options will commence trading on the ASX on the 16th November. For those members who took up the options for 1.5c each we expect to see an immediate 10 bagger when they open. The options exercise price is 5.2c so they should trade around 5c less than the share price. Given the current 25c share price this means they should open around 20c each. We would still not recommend selling them as during next year we expect to see the AEE share price pushing up towards $1. Which means the option should push up towards 95c. which if it happens will not be bad for a 1.5c buy.

Deep Yellow (DYL.AX) – Target price AUD $1.90

The DYLO options were triggered and called in. Therefore we are now transferring our ten bagger call from the options back to the DYL shares. In doing so we shall also adjust our call price down to reflect the extra gearing and profits we previously got from being set in the options . which had gone up 600% since we called them in January.

A General Uranium Note

The good news keeps on coming out for the industry. A new direct buying physical fund (like Sprott) was started by Kazatomprom and the Kazakhstan government to target Asian buyers. Japan announced they are reopening more of their closed down reactors, Germany is now making noises about reversing its anti-nuclear stance and starting a reactor fleet, France announced it wants to go almost 100% nuclear and China continues to announce more new reactors.

The feeling of the committee is that while the uranium price remains robust, we do believe that Sprott will try to keep the uranium price as low as it can (below $50) prior to their SPUT Physical fund getting its expected listing on NYSE next March. This is so Sprott can more easily raise new capital into the fund. After that happens we expect the price and the stocks to really take off north. Meanwhile the uranium equity funds keep filling up with hundreds of millions of USD to be deployed amongst the only 50 or so eligible uranium stocks. We remain extremely bullish on the whole sector but it may trade sideways-ish until around March next year so a good time to buy more.

King Island Scheelite (KIS.AX) – Target $A0.40, collect up to 20c

Holders have been through a tough time with KIS recently as they arranged their final financing to completion, but finally some news that the Dolphin Tungsten Mine is now fully financed and will be redeveloped brightened our mood. Earth works are scheduled to commence in December as this stock finally sets sail to become the highest grade producer of tungsten on Earth. Give yourself a little pat on the back if you held or added more KIS during the recent tough times at 14c as we waited (and waited) on financing news. Hopefully, it’s clear blue tungsten skies from here. KIS chart below.

Element 25 (E25.AX) – Target A$6.00 ++ strong buy at current price.

It has been a turbulent couple of weeks for the E25 Share price, initially from two major shareholders selling off almost four million shares. There have been recent positive announcements, for example the high purity results now being achieved are quite remarkable, and the Butcherbird ore is really easy to get to high purity levels with low impurities. Even the most recent announcement was positive as they have discovered a new reagent which improved the process significantly from an already optimised process. Despite this positive news, we believe the market acted savagely to the announcement of the delay of the PFS until H122. Many shareholders had been waiting eagerly for the PFS to land in December, and likely jumped ship, causing a spiral downward as those dreaded emotions of fear and panic set in.

Many have asked where the Club stands on E25. The answer should be obvious to those reading the E25 Discord channel. The fundamental strength of Element 25 remains as strong as ever. Two major shareholders are now gone and these have been taken up by the market. We are collating questions to ask the CEO, Justin, and we will publish the results of this when we get them. The company continues to look at off-take agreements for battery grade manganese. They could have signed significant deals with metal traders throughout Asia, but are focusing on battery or car manufacturers. These deals take time but they are being worked on. An MOU with a big name would turn the share price around dramatically. It is possible that before Christmas we will see numbers come out on the battery grade manganese including potential annual production, some revenue predictions, some costing predictions. The numbers will be in the many hundreds of $millions for revenue and it will be a big NPV number.

For now, stay calm, stay patient.

Firebird Metals (FRB.AX) – Target A$2.00+, collect under 60c

As E25’s little partner in crime Firebird has also dropped in recent times, but with drilling results imminent it’d be a brave investor to sell out now given the low SOI and tiny market cap this prospective manganese producer has. A nice little 10% jump on the second Friday of November could be the precursor to drilling results (we hope). FRB also announced recently a technical review of its Hill 616 manganese project which looks like it could also be a decent deposit, given it exhibits many similar geological qualities to the company’s flagship Oakover project.

Danakali (DNK.AX) – Target A$2.00 collect it under 50c

As this report was being typed up DNK went on a little Friday afternoon run. After dropping to 42.5c, it has jumped to above 50c again for the first time in a while. While potash prices continue rising, so has the price of magnesium, and the market is suddenly realising that as well as potash, salt, and gypsum DNK also holds one of the worlds biggest magnesium deposits. Meanwhile we hear the final financing negotiations are progressing well.

Errawarra Resources (ERW.AX) – Target A$2.00, collect under 20c or even up to 30c

While there’s not a lot to report on the official news front from ERW, we do still expect that a nice deal to inject a juicy asset into this cashed up shell company could hopefully soon (eventually!) get finalised and then this stock should then take off like we know it can given its miniscule SOI and market cap. For now it seems like, for the cost of a six-pack of Emu Export, traders can throw around the share price 10-15%. Keep holding and keep the faith. we know it’s been a bit like waiting for godot, but from all we hear the deal should be happening imminently - but we’ve been hearing that for two months now! But often these deals just take more time to get done.

K-Tig (KTG.AX) – Target A$4.00, collect up to 45c

We have stated this is a long term play. But one with potentially massive upside and not too much downside from here, which in our books is always a good trade to be in- but it does require patience. The company keeps increasing its small but growing revenue (US$729k last quarter) from its bog-standard business of selling its welding tech heads. It continues to get more penetration and acceptance in the US market and is putting in place all the facilities to supply and support it’s new clients. More and more we believe the advantages accruing to those who use its technology should eventually force all their competitors to adopt the technology too. therefore getting the support network in place in key. Spreading its adoption is kind of like a welding-tech version of Metcalfe's law! These are still early days in that process.

Meanwhile with its much more interesting side (speaking as a 10 bagger hunter) of trying to win monster government deals, the company is progressing well in its push to become the main welder in UK’s and later the world’s nuclear decommissioning industry, and also in proving its worth as the welding partner for Hanwha defense corporation- so it can hopefully join them in winning several multi-billion dollar defense contracts In Oz and globally. Hanwha is the biggest global defense contractor outside the USA. Any one of these pending contracts should send KTG’s shareprice to the moon.

As the counter has fallen since our call price of 45c to 31c look on it as an opportunity to get more at an even better price and just keep collecting it up and keep the faith, but always with one eye on the news flow from the company.

Zeus Resources (ZEU.AX) – Suspended

Zeus continues to be in an ASX suspension. The committee has decided that in order to relist the Chinese state corporation ZIMC board members who have been blocking all progress on the company have to go and last Friday launched a 203d and 249d action to remove and replace them. Much more info will be made available next week on the ZEU channel after the 249d process news is out.

Multibagger Stocks Update

Remsense (REM.AX)

Many members took part in our latest multibagger call: the recent Remsense IPO at 20c. The stock opened and ran up to 55c on good volume for a nice 175 % profit on day one for those who took it up. The price has now settled a bit but at the time of writing is still a healthy 45c.

A systems engineering and technology development company. Listing to advance commercialisation of their Virtual Plant initiative. Virtual Plant uses photogrammetry to create photorealistic Digital Twins of dispersed industrial assets. It uses AI to detect assets autonomously and can then be linked to other data: e.g. safety info, maintenance logs, etc. Existing digital twins (e.g. Pointerra 3DP) use Lidar which is data intensive and produces unrealistic results. Already they have mapped four assets for Woodside. It can be used on any device e.g phone/VR headset, anywhere, at any time. It can also be used for training, procurement, maintenance, etc., all without having to travel to remote assets. Some general points of note are:

  • Significantly oversubscribed $5m IPO (closed in ~ 3 days)
  • Implied EV of $10.9m
  • Pointerra (ASX:3dp) listed peer EV ~$280m
  • Partnered with NASDAQ listed US$5.4B company Matterport (MTTR), Matterport was up 19.5% on Friday because of their link to Facebook's new 'metaverse,' Digital twins are likely to play a significant role in this in the future
  • Major clients: Woodside, BHP, Anglogold Ashanti, Western Power, Main Roads WA etc.
  • 79,375,000 shares on issue, ~60% escrowed, Top 20 hold 76.49%
  • Circa $5m in revenue FY21
  • Global digital twin market forecast to be worth US$115.1b in 2035
  • Experienced board (the Chairman was Director and Group CEO of Programmed from 2008 until retirement in 2019)

We’re calling it a multibagger for now, but given its potential if management are on their game this could become a potential 10 bagger in a few years. We are expecting it to increase further in value as they add customers. At 40c it would have a market cap of around A$ 32 million its only real competitor or similar technology is Pointerra (3dp.ax) which has a market cap of A$288 million! (Also, un-listed Willow has a 230 million valuation, off A$8 million revenue.) So there is plenty of scope for this company to become a 10 bagger. for the moment until we see how it finds its feet in the market we would not advise buying it over 25c at this point.

Crypto Corner

During last month our crypto calls continued to be our most successful and volatile rides. We had continued strong performance across many of the Luna ecosystem protocols and also our two earlier calls, Bitcoin and Ethereum.

Bitcoin just hit a new all time high (ATH) of $69,700, giving members who have bought and held it since our call last year a 1,150% profit so far. Australia recently allowed spot ETF for Bitcoin and Australia’s largest bank, CBA, is going to provide a crypto exchange within their app. These two developments will onboard millions more into crypto. This highlights the legitimacy of crypto and institutions waking up to this game changing technology. We expect the volatility to continue and the Bitcoin price to still go higher this year and next, so just keep holding.

Ethereum, our 10 bagger call at $720 in January this year, has also been pushing higher and last week set a new ATH of $4,860 for a gain of 575%. The bullish moment is set to continue with Ethereum use exploding and improved tokenomics creating a burn of ETH tokens leading to higher prices. Our Ethereum channel contains some incredible reports from both Goldman Sachs and Standard Chartered banks for their price predictions of up to 25,000 per coin.

Our main focus continues to be Luna and the protocols within its ecosystem. Members have been rewarded with their efforts to get established within this dynamic ecosystem where Luna has also risen to a new ATH of over $55. Congratulations to all those members who have been buying Luna since our 10 bagger our call in May for a 1,240% gain in 6 months. We expect Luna coin to still go well over $100 so keep holding or collecting more. And keep an eye on our Terra-Luna channel where many of the Luna details are discussed including the recent burn event of over $3b worth of Luna tokens.

In addition to the Luna price rise, we also called it as staked Luna and those members who are staking their coins are also receiving increasing rewards which are expected to provide a double-digit income stream on top of the Luna price rise. Furthermore, Luna stakers are also receiving many free airdrops providing tokens within exciting new protocols in the Luna ecosystem, these include; Nexus, Orion, Loop, TWD, Anchor and more. Most of these airdrops are up over 20x.

Our more recent luna protocol coins have both gone up by around 4,600%. The Orion coin, called in September, went up by 4,620%. And last month’s 10 bagger call Nexus Governance Token (code PSI) hit an ATH of 46c to go up 4,590%! PSI’s price just dipped back to 23 cents in this past week’s high volatility in all the crypto markets. However we expect Nexus coin to move significantly higher over still to over US$1.40 and so would strongly suggest it as a buy during this correction phase

We are expecting several more crypto developments and also IDOs pre-year end so keep your eyes on the crypto channels. And we strongly suggest you get yourself a terastation wallet. The info on how to do it is in the crypto for beginners channel. It's free, and not too complicated, you sign up, log in, then get some crypto money in there (just small amounts is fine) and you can then take advantage of what we believe will be some humdinger new IDOs over the next few months. Many of which should perform as well as our last two calls. We continue to push one of our crypto guys to get a video out explaining it all to members more clearly and simply. Hopefully it will be out this coming week.

Club News

The club just moved over the 1,100 members threshold which as agreed amongst members has triggered a price rise for new members to US$300 per year. This is still just the commission fee of a 3 or 4 stock trades with any normal broking house in Australia. Hopefully the performance of our call suggestions should quickly allow any new members to make their first ten bagger in the club a ten fold return on their membership fee investment! Good luck and prosperous trading and investing till Christmas.

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.