Critical Investor Shares His Top 7 Picks for 2022


TICKERS: LIT; PNXLF; OAY3, AZT; AZZTF, FIND; BSENF, CIA, DV; DOLLF, GSHR; GSHRF, WCU; WCUFF

The Vital Investor was requested once more by Streetwise Reviews to offer his high 7 picks for the brand new 12 months — at a degree the place the COVID-19 pandemic is taking part in out the Omicron variant, inflation is reaching ranges not seen in a long time, the Fed stunning the markets with a extra hawkish stance than anticipated, with steel costs at very excessive ranges though gold and silver appear to be consolidating and organising for a breakout.

Since my portfolio often consists of a mixture of commodities, themes, and levels, this 12 months is not any totally different. For instance uranium is a commodity that would acquire momentum this 12 months. I anticipate a possible run for 2022 in uranium associated equities, as I view the Sprott Uranium Belief efforts to kickstart utility contract shopping for by cornering a major a part of the spot market not with out benefit, since I count on Sprott to have completed their homework earlier than they intend to spend US$1.3B on uranium oxide hypothesis. My uranium play of selection is an explorer, with for my part the one greatest uranium geologist on the helm, who amongst different discoveries discovered the Arrow deposit (owned by NexGen Vitality): James Sykes.

One other attention-grabbing theme is the EV market, and its associated metals like copper and lithium. Though lithium product costs are trending extraordinarily excessive proper now (US$34,000/t battery grade carbonate), and will right quickly, I count on them to stay nicely above US$20,000-25,000/t for the foreseeable future, nonetheless rendering a lot of lithium tasks extraordinarily financial.

After watching the explosive run-up and crashing down of the iron ore value, it appears the underside is in, and I chosen the first pure play on this steel to observe an eventual restoration.

The cornerstone of my holdings consists of a lot of valuable metals performs in numerous levels, though I have to specific some desire for superior performs right here, after operating right into a justifiable share of failures with binary, early-stage exploration narratives. So no swing-for-the-fences 20–50 baggers right here for this 12 months, however a number of (at the very least for my part) stable possibilities for 3–5 baggers.

With out additional ado, listed below are my high seven picks for 2022.

1. World Copper Ltd. (WCU.V)

Market cap C$44.68M, share value C$0.74, money place C$5M

We kick off with World Copper, a copper developer, who owns 2 superior copper tasks, Escalones (oxides/sulfides) in Chile and Zonia (oxides) in Arizona, and a greenfields copper venture, Cristal, additionally in Chile. Administration and Board of Administrators include some heavyweights, like Government Director Marcelo Awad (18 years with Codelco, 8 years CEO of Antofagasta), Roberto Fréraut (simply retired early as Exploration Supervisor for Codelco Chile), and Patrick Burns (instantly concerned within the discovery of Escondida and Zaldivar). A 2018 PEA was accomplished on the Zonia oxide venture, the place a M&I useful resource of 77M brief tons (@0.33% Cu) and Inferred useful resource of 27M brief tonnes (@0.28%) lead to an after-tax NPV8 of US$192M and IRR of 29% based mostly on a copper value of US$3.00/lb Cu. At a US$4.00/lb Cu copper value the after-tax NPV8 will increase to US$447M.

The Escalones venture comprises an Inferred 426Mt @0.47% Cu oxide useful resource, and when benchmarking this to the Marimaca oxide venture (owned by Marimaca Copper > MARI.TO), a back-of-the-envelope NPV8 estimate of US$1B based mostly on $4.00/lb Cu doesn’t appear unrealistic in any respect. The Escalones PEA is anticipated quickly, on the finish of January. There may be additionally a lot of exploration potential to increase the Escalones deposit. On high of this, World Copper is planning a small drill program at their Cristal venture of 4-6 holes of 500-1,000m every, to check massive porphyry potential.

2. Aztec Minerals Inc. (AZT:TSX.V; AZZTF:OTCQB)

Market cap C$14.29M, share value C$0.22, money place C$2M

An attention-grabbing superior explorer within the Americas is Aztec Minerals, based by Chairman Bradford Cooke, who additionally based (and is Government Chairman of) Endeavour Silver (EDR.TO, C$835M market cap). Aztec is working two JV-ed tasks, Tombstone (65/35) in Arizona, and Cervantes (75/25) in Sonora, Mexico. Each tasks have already seen sufficient drilling to calculate some back-of-the-envelope estimates, and for each tasks potential estimates are available in at 600-800koz Au.

The mineralization for each tasks is hosted in heap leachable oxides, and intercepted grades up to now for each tasks point out fairly financial potential. The wildcard for each tasks is massive scale exploration potential at depth: at Tombstone the corporate is specializing in CRD fashion mineralization, at Cervantes drilling is ongoing at porphyry gold-copper targets. Drill outcomes for Cervantes are anticipated within the second half of February, one other drill program for Tombstone is being deliberate.

3. Baselode Vitality Corp. (FIND:TSX.V; BSENF:OTCQB)

Market cap C$74,79M, share value C$0.91, money place C$20M

When individuals speak about uranium exploration within the Athabasca Basin, there may be principally one title to rule all of them: James Sykes. The CEO of Baselode Vitality singlehandedly found the Tier I Arrow deposit of NexGen Vitality (at present at a market cap of C$2.8B, simply based mostly on creating Arrow) in opposition to orders from administration who informed him to drill elsewhere, earlier than this he expanded the Roughrider deposit of Hathor Exploration (offered to Rio Tinto for C$654M) by transforming their knowledge and displaying a totally totally different strike route of mineralization, and in flip precipitated Fission Vitality to “uncover” the excessive grade J-Zone instantly adjoining to and on strike with this new strike route of Roughrider, and this J-Zone was purchased by Denison a number of years later for C$70M.

An extended story brief: Sykes is aware of find out how to discover uranium like no different, and he’s now operating his personal present over at Baselode. Their flagship venture is known as Hook, with the present give attention to the Ackio-GMX goal, they usually already made a close to floor excessive grade discovery in a basement-hosted host rock setting, akin to Arrow and Roughrider. The one distinction is that Sykes is trying simply exterior the normal boundaries of the Athabasca Basin, to see if he can keep away from the technical challenges that plenty of the present Basin mines and deposits are dealing with. The corporate has sturdy institutional help, as 50% is owned by them, an equally sturdy money place, and drilling is ongoing.  

4. Argentina Lithium and Vitality Corp. (LIT:TSX; PNXLF:OTC; OAY3:FSE)

Market cap C$29.38M, share value C$0.40, money place C$6.5M

As a member of the Grosso Group, Argentina Lithium is firmly centered on Argentina for doing enterprise. Joe Grosso and his individuals have been conducting exploration and improvement for many years within the LatAm nation, and as such know precisely find out how to efficiently navigate the generally complicated processes in Argentina. After a interval of relative inactivity because of decreasing lithium sentiment, Argentina Lithium acquired a number of potential brine lithium properties within the so-called Lithium Triangle, raised nearly C$6M, and is finishing surveys and exploration allowing in the intervening time, as preparation for drill packages at 2 of their tasks later this 12 months.

Certainly one of these tasks is the Rincon West venture, and curiously the subsequent door Rincon venture (owned by Rincon Mining, a non-public firm owned by Sentient Fairness Companions) was just lately acquired by Rio Tinto for $825M. With lithium product costs in any respect time highs and over 4 occasions the degrees wanted to render 300-400Mg/L Li grades for brines financial, there appears to be a fairly good likelihood at exploration success this summer time.

5. Champion Iron Ltd (CIA:ASX)

Market cap C$2.72B, share value C$5.38, money place web constructive C$182.9M

Champion Iron is the biggest listed pure play iron ore producer on the planet and in addition managed very nicely, and as such for me the absolute best proxy for the iron ore value. The corporate is seeking to meaningfully increase their manufacturing (from 7.4Mt to 15Mt every year), whereas the iron ore value is recovering once more. Flagship venture Bloom Lake is projected to double manufacturing after the continuing Section II enlargement is accomplished. Over fiscal 12 months 2021 Champion Ore realized C$819.5M in EBITDA, however already C$605.8M in EBITDA over the primary 6 months of fiscal 12 months 2022 (ending Sept 30, 2021).

Champion Iron has among the highest quality iron ore at Bloom Lake, and is among the lowest value producers on the planet. The corporate additionally owns the close by 7.8Mtpa Kami venture (as soon as explored and developed by Alderon Iron Ore, which defaulted on debt repayments, seeing creditor Sprott seizing the asset, adopted by the acquisition by Champion in 2021), planning to replace the FS by the tip of 2022. Enjoyable half is Champion additionally acquired Bloom Lake out of chapter safety years in the past. One other massive venture is their former flagship 9.3Mtpa Hearth Lake North venture.

 

6. Dolly Varden Silver Corp. (DV:TSX.V; DOLLF:OTCQX)

Market cap C$82.46M, share value C$0.63, money place C$15M

After buying the Homestake Ridge venture from Fury Gold Mines for C$50M (C$5M in money and C$45M in fairness, inflicting the professional forma market cap to extend by 58% after closing of the transaction), Dolly Varden Silver gained nearly 1Moz excessive grade Au, and 20Moz Ag, subsequent door to their namesake Dolly Varden venture which already contained 32.9Moz Ag Ind and 11.4Moz Ag Inf. The mixed venture might be known as Kitsault Valley venture, and can profit from synergies when developed right into a mine.

The Homestake Ridge venture had a PEA accomplished in 2020, offering already sound economics at an after-tax NPV5 of US$173M at conservative steel costs. At present spot costs I estimate the NPV5 to extend to over US$300M. When combining the 2 tasks, a back-of-the-envelope estimate of economics generated a hypothetical NPV5 of US$500M. Dolly Varden administration is taking a look at a season of exploration first, so as to unlock the dimensions and potential of the deposits, offering a stable base for the mixed PEA. Eric Sprott owns 11% of the corporate.

7. Goldshore Assets Inc. (GSHR:TSX; GSHRF:OTC:F:8X00)

Market cap C$72.74M, share value C$0.63, money place C$16M

Goldshore Assets is a comparatively new explorer/developer that listed in the summertime of final 12 months. Their Moss Lake venture was acquired from Wesdome for about C$52M in staged funds, of which C$32M has been accomplished now, and the steadiness is due in shares solely. The Moss Lake deposit has a 2013 historic useful resource of 4Moz Au, with most of it being open pit potential, at a mean historic grade of 1.1g/t. The 2013 PEA resulted in an after-tax NPV5 of US$444M based mostly on a gold value of US$1700/oz Au.

Administration goals at proving up 6-8 Moz Au, which might imply a Tier I deposit. As it’s a massive venture, this implies plenty of drilling, and administration doesn’t draw back from the duty, and initiated a 100,000m drill program, deliberate to be accomplished on the finish of Q2, 2022, and is seeking to go on full drive with 4-5 drill rigs after this, after all relying on drill outcomes and market situations which is able to decide pricing and timing of capital raises.

Administration is seeking to show up and meaningfully increase the useful resource and as a consequence the open pit dimension and depth as nicely, and is taking a look at a lot of different parameters to enhance. For instance recoveries within the 2013 PEA have been simply 80-85%, administration thinks it may enhance them to perhaps whilst excessive as 95%. Different gadgets are strip ratio, common grade, processing and mine manufacturing.

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This concludes my article about my high picks for 2022, I hope you discovered some attention-grabbing beginning factors for doing your personal due diligence, as all the time. To by no means miss a factor, please subscribe to my free e-newsletter at http://www.criticalinvestor.eu/, so as to get an e-mail discover of my new articles quickly after they’re revealed. 

The Vital Investor is a e-newsletter and complete junior mining platform, offering evaluation, weblog and newsfeed and all types of details about junior mining. The editor is an avid and significant junior mining inventory investor from The Netherlands, with an MSc background in development/venture administration. Quantity cruncher at venture economics, searching for high-quality firms, largely development/turnaround/catalyst-driven to keep away from an excessive amount of dependence/affect of long-term commodity pricing/market sentiments, and sometimes searching for long-term deep worth.

Getting burned prior to now himself at junior mining investments by following overly constructive sources that as a rule averted to say (hidden) dangers or vital flaws, The Vital Investor discovered his lesson nicely, and goes a number of steps additional ever since, offering a recent, extra in-depth, and significant imaginative and prescient on issues, therefore the title.

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The creator just isn’t a registered funding advisor, and at present has a place in these shares: World Copper Ltd., Aztec Minerals Inc., Baselode Vitality Corp., Argentina Lithium and Vitality Corp., Champion Iron Ltd, Dolly Varden Silver Corp., and Goldshore Assets Inc. 

Aztec Minerals Inc., Argentina Lithium and Vitality Corp., and Dolly Varden Silver Corp. are sponsoring firms. All info are to be checked by the reader. For extra info go to the corporate’s web site and browse the corporate’s profile and official paperwork on www.sedar.com, additionally for vital danger disclosures. This text is supplied for info functions solely, and isn’t meant to be funding recommendation of any type, and all readers are inspired to do their very own due diligence, and speak to their very own licensed funding advisors prior to creating any funding choices.

All charts and graphics supplied by the creator.

All photos are firm materials, except said in any other case.

All currencies are in U.S. {dollars}, except said in any other case.

Streetwise Reviews Disclosures:
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2) The next firms talked about within the article are sponsors of Streetwise Reviews: Argentina Lithium & Vitality Corp., Dolly Varden Silver Corp., and Goldshore Assets Inc. Click on right here for vital disclosures about sponsor charges. The knowledge supplied above is for informational functions solely and isn’t a advice to purchase or promote any safety.

3) Statements and opinions expressed are the opinions of the creator and never of Streetwise Reviews or its officers. The creator is wholly accountable for the validity of the statements. The creator was not paid by Streetwise Reviews for this text. Streetwise Reviews was not paid by the creator to publish or syndicate this text. Streetwise Reviews requires contributing authors to reveal any shareholdings in, or financial relationships with, firms that they write about. Streetwise Reviews depends upon the authors to precisely present this info and Streetwise Reviews has no technique of verifying its accuracy.

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5) Now and again, Streetwise Reviews LLC and its administrators, officers, workers or members of their households, in addition to individuals interviewed for articles and interviews on the location, could have a protracted or brief place in securities talked about. Administrators, officers, workers or members of their speedy households are prohibited from making purchases and/or gross sales of these securities within the open market or in any other case from the time of the choice to publish an article till three enterprise days after the publication of the article. The foregoing prohibition doesn’t apply to articles that in substance solely restate beforehand revealed firm releases. As of the date of this text, officers and/or workers of Streetwise Reviews LLC (together with members of their family) personal securities of Dolly Varden Silver Corp. and World Copper Ltd., firms talked about on this article.

 

 

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