Get Ballangers Top Picks for 2022


TICKERS: CPR; CPRRF, AMC; AZMCF, FMM, GTCH; GGLDF, GCN; GCFFF, NOC, NCX; NTCPF, WUC; WSTRF

As a part of his annual forecast, sector skilled Michael Ballanger is giving his high picks for 2022. 

In one other piece, Ballanger says firstly of the 12 months he finds himself at an investing crossroads the place the 4 roads are outlined as money to the south, gold to the north, progress shares to the east and glued earnings to the west. Standing in the course of the intersection and pondering one’s selections creates an epic quandary, he says.

“Establishing a portfolio in immediately’s ‘managed’ economic system (by way of ‘managed’ markets) has been a problem,” he wrote. “The forces of a Fed-induced deflation, introduced on by tapering first and tightening second, discourages shares and gold whereas favoring money and glued earnings. The emergence of excessive inflation and shocks to the availability chain (within the occasion of coverage failure) discourages money and glued earnings whereas favoring shares and gold. Because the Fed has clearly signaled inflation as the brand new enemy (versus most full employment and shares), my inclination is to go for capital preservation over capital appreciation. The issue stays, nonetheless, and with inflation operating ‘scorching,’ capital preserved will get eaten alive by forex debasement, leaving the cautious investor penalized for that very warning.”

Michael Ballanger on His GGMA 2022 Mannequin Portfolio

 

The most important change to the mannequin portfolio is decreasing the dimensions of all positions to create a 15% allocation to the Professional Shares Extremely VIX S/T Futures ETF. This can largely insulate the GGMA 2022 Portfolio from experiencing the kind of drawdown which occurred in March 2020. If one assumes {that a} related occasion happens once more in March 2022 and the gold miners and the UVXY carry out in the identical method, one might theoretically expertise an 87% drawdown within the junior miners whereas on the identical time seeing a 1,240% advance within the “vol” commerce. The portfolio would see $85,000 in junior miners shrink to $11,050 whereas the $15,000 hedge (UVXY) grows to $185,800. Now, these may be exaggerated numbers however you all get the drift.

I attempted to placed on the UVXY again in September and was stopped out at a 15% loss however market situations at the moment are as precarious as I’ve ever seen (and I went by way of the October 1987 crash, the 2001 tech wreck, and the 2008 subprime meltdown). Not as soon as throughout these corrections did the Fed ever go “hostile;” actually, they have been standing there with liquidity security nets each time the market let loose a peep.

GGMA 2022 Buying and selling Account

 

No instant adjustments are pending. Nonetheless, I will probably be including UVXY to the buying and selling account from the present $83,341 credit score stability by mid-January. I may also be including to Northisle Copper & Gold Inc. from money as I see super upside from the CA$0.42 stage in 2022. Lastly, I want to ascertain publicity to uranium within the buying and selling account so Western Uranium & Vanadium Corp. is being acquired by means of the latest unit providing at CA$1.60 per unit (that features the total three-year warrant at $2.50).

The GDXJ Might $43 calls are presently underwater, however I’m anticipating to see a seasonal rally within the juniors proper into Might with the caveat being that I have to regulate the Fed and the U.S. greenback in case the tapering/tightening begins a mass migration to the buck. It doesn’t matter what the gurus let you know, a powerful greenback shouldn’t be good for valuable metals.

The Listing

 

Getchell Gold Corp. (GTCH:CSE; GGLDF:OTCQB); (CAD $.58 / USD $.4673): Having owned this deal since Might of 2017, it has been an extended journey stuffed with various bumps within the street (together with fouled-up itemizing procedures in early 2019, drill bit disappointment at Scorching Springs Peaks, and extra just lately delays on account of COVID, native staffing points, and now a hacked assay lab) however what retains this title on the entrance of the pack is the excellent job being carried out by geologist/President Mike Sieb and Vice President of Exploration Scott Frostad within the interpretation and exploration of the rapidly-advancing Fondaway Canyon undertaking in Nevada.

I’m issuing a follow-up Particular Conditions report later this month after I get a have a look at the outcomes from drill gap FCG2021-11, which must be spectacular however which have been delayed by a “hacked” assay lab. I totally anticipate that the entire outcomes from holes 11 to 17 will probably be good holes however it isn’t the assay outcomes which can be the problem right here. Valuation (or undervaluation) is a BIG difficulty, and it should change.

If I exploit the fully-diluted capital of the corporate at $110 million, the market capitalization is $51.4 million and once I divide that quantity by 1,069,000 ounces which represents the pre-2017 “historic” useful resource (earlier than Getchell even drilled a single gap), it places a value-per-ounce of $48 on all the firm based mostly solely on Fondaway.

If this have been the Nineteen Nineties, analysts overlaying the junior miners would take one look at that value-per-ounce quantity and be pounding the desk due to the historical past of mergers in Nevada and the value-per-ounce commanded by the vendor. Low-grade, open-pit (Carlin-type) assets often exit at round $100 per ounce whereas high-grade get nearer to $200 per ounce. Fondaway Canyon’s Central Zone is increased grade than most Nevada gold assets. In actual fact, the pinnacle grade mined by Barrick Gold in Nevada averages .87 g/t which is a fraction of the grade being present in not solely the identified parts of the deposit but in addition in two new high-grade zones which can be NOT included within the “historic” useful resource quantity.

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To this point, the market refuses to imagine that there’s a a lot bigger and doubtlessly impactive story creating regardless of Sieb and Frostad’s good interpretation and that’s no fault of theirs however it isn’t merely to be sloughed off as being because of the “crappy junior mining market.” As an analyst and former company finance participant, I refuse to just accept this deeply discounted valuation for the asset and have warned administration that they should have interaction an unbiased engineering agency to improve the prevailing useful resource which entails the inclusion of 2017 drilling achieved by the previous proprietor (Canarc Sources) and the entire Getchell drilling in 2020 and 2021 thus far.

The previous paradigm of the Nineteen Nineties the place analysts and traders didn’t require “spoon- feeding” has been changed by one during which all one wants is a “story” and “an uptrend” with the intention to represent “due diligence.” For Getchell shareholders, that isn’t an appropriate excuse for such dramatic underperformance relative to others whose outcomes don’t maintain a candle to Getchell’s however whose share worth has left it within the proverbial mud. That the inventory closed at a year-to-date + 70.59% ROI versus unfavourable numbers for the sector is a feather of their hat however by way of being rewarded for such excellent drill outcomes, it’s woefully insufficient.

Having gotten that off my chest, GTCH stays my largest holding and I’ll add on weak point.

BUY – Goal: $5.00 in 2022

(Warning: I had a $5.00 goal for 2021 as effectively.)

Northisle Copper and Gold Inc. (NCX:TSX; NTCPF:OTCPK); (CA$0.42/$.3361): Initially really useful in Might 2021 at CA$0.25 ($0.1975), this title falls fantastically into the proper storm of electrification and inflation safety. The North Island Venture has scale and grade and proximity to infrastructure seldom current within the present setting for junior builders.

I like each facet of this firm: stable administration with capital markets experience and relationships, a powerful technical workforce skilled in mine constructing and operations, an amazing jurisdiction (B.C.), and most significantly, the presence and involvement of strategic investor Michael Gentile, whose monitor file and market savvy are enviable.

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In a world transferring quickly and forcefully towards complete electrification, entry to turnkey copper tasks is a rarity today and whereas I coated that within the earlier a part of this difficulty, the primary driver behind Northisle is administration, the place there exists substantial capital markets expertise as CEO/Pres. Sam Lee brings data from a 20-year profession with CIBC World Markets to the desk. Including to the capital markets horsepower is strategic investor Michael Gentile whose fund just lately threw down CA$1.9 million by means of a unit providing and whose interview and podcast despatched the share worth scurrying from the tax-loss doldrums sub-CA$.20 stage to a 52-week and multi-year excessive of CA$.47. I picked this off final March within the CA$.25 vary, however till a number of weeks in the past, had been lower than thrilled with its efficiency. That the Gentile affiliation triggered an avalanche of buy-side quantity shouldn’t be a shock. An analogous deal, Arizona Metals Corp. (AMC:TSX.V; AZMCF:OTCQX) acquired the Gentile blessing on Dec. 2, 2020, with the inventory at CA$.70. 13 months later, it trades at CA$6.15 for a achieve of 778%.

The tape motion in NCX and the historic efficiency of AMC underscores the nascent benefit loved by these juniors which have the endorsement of a robust “influencer” so given my bullish evaluation for the copper house, Northisle has all cylinders firing laborious as we transfer into the New Yr.

BUY aggressively utilizing a CA$.50 / USD $0.42 restrict worth – goal $1.15 (topic to revision)

Western Uranium & Vanadium Corp. (WUC:CSE; WSTRF:OTCQX); (CA$1.87 / $1.47): As mentioned earlier, uranium is really probably the most asymmetrical commerce within the universe as we head into 2022, and if there may be one factor that stands out for Western U & V, it’s the 55-million-pound uranium useful resource on their stability sheet. Favorable jurisdiction and entry to infrastructure, zero CAPEX necessities and a decent share construction permits shareholders to have a 100% correlation to uranium pricing.

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By comparability, Vitality Fuels carries slightly below a 50-million-pound useful resource and trades at a $1.187 billion market cap versus Western’s $57 million. Absolutely, the possession of a permitted mill (Pinion Ridge) mustn’t make EF extra helpful to the tune of a billion {dollars}.

Purchase – Goal worth: New highs above CA$4.18/$3.28 by Q3/22. No cease.

Allied Copper Corp. (CPR:TSX; CPRRF:OTCQB); (CA$.22/$.1689): Once I launched the March financing to all subscribers, it was on the premise of the caliber of administration with particular reference to Chairman Warner Uhl, a former Fluor Corp. engineering wizard with the entire obligatory attributed as a mine builder. Because the deal unfolded, he was awaiting the completion of the Might subscription receipt funding with the intention to start the method of sourcing out superior exploration or pre-production property. Sadly, this course of was derailed in Might as IIROC decided that the transaction that accompanied the funding was to be handled as an “RTO” (reverse takeover) leading to a painful six-month buying and selling halt. When it opened for buying and selling in November, reminiscences of the CAD $.68 all-time excessive for the 12 months have been quickly forgotten and uncertainty prevailed, by no means a constructive for any listed firm.

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Now, Uhl remains to be chairman and the brand new president/CEO, Richard Tremblay, throughout a lot of conversations in late 2021, demonstrates a excessive diploma of capital markets understanding and appreciation. Whereas the buying and selling halt damage the near-term efficiency, it has not altered my bullish stance on CPR. The retrenchment in copper and the junior copper offers within the second half of final 12 months has really elevated the supply of tasks at decrease costs so the six-month delay has really benefitted them because of the wonderful working capital place (CA$5.9 million).

I’m taking the view that electrification will convey traders to junior copper builders and that Mr. Uhl’s appreciable contacts within the world copper house will end in a number of high-quality tasks crossing his desk and in the end driving valuation. With solely 38 million shares issued and a CA$8.37 million market cap, there may be a substantial amount of room for appreciation.

BUY – Goal Value: CA$1.25 in 2022.

Norseman Silver Ltd. (NOC:TSX.V); (CA$0.29/$.221): Regardless of having a tough 2021 after a barnburner begin, Norseman is my high junior explorer. The Taquentren Venture (nicknamed “Son of Navidad”) in Patagonia, Argentina was assembled by Daniel Bussandre, the prospector/geologist that put collectively the Navidad discovery acquired by Pan American Silver in 2009 for CA$630 million. Early reviews have revealed an amazing many similarities between the 2 tasks however have been it not for the presence of Bussandre, I might not be as optimistic.

The corporate must give attention to advertising the Taquentren Venture as a result of that is the type of junior mining market that may solely reward main discoveries (however not all the time, i.e., Getchell’s Fondaway Venture). The Gastre Fault area of Patagonia is an under-explored geological province on account of what has been a harsh regulatory setting for junior explorers however regardless of that, it’s extremely potential from a geological perspective. Additionally including to my bullish view was the latest ruling out of Chubut Province that will permit open-pit mining in sure zones of the Gastre Fault area which is able to permit funding capital to stream extra freely into tasks positioned in Patagonia and Argentina as an entire. Chairman Campbell Smyth has been a colleague/pal of mine for over a decade and is aware of the mining enterprise in addition to anybody I’ve encountered in my 45-year funding profession.

The allowing course of is ongoing and I’m optimistic {that a} drill program will probably be introduced this 12 months however floor work together with geochemical and geophysical surveys ought to proceed to attract parallels between Navidad and Taquentren and it’s the advertising of those essential similarities recognized by the person who found that 800-million-ounce silver deposit within the adjoining province that may drive the share worth.

BUY – Goal Value CA$0.75 in 2022 (topic to revision).

Goldcliff Useful resource Corp. (GCN:TSX.V; GCFFF:OTCBB); (CA$.09/USD $.075): Goldcliff has made an early-stage gold discovery by means of sampling and trenching on the Kettle Valley undertaking positioned in southern British Columbia. The corporate introduced that they’ve pinpointed drill targets that will probably be prioritized as soon as the climate clears however every thing being executed by Goldcliff is systematic and value efficient. CEO and main shareholder George Sanders was a founding director of Silvercrest Metals, so on condition that George owns over 35% of the issued capital, he isn’t going to spend cash except he sees potential for an exit, which won’t occur except he comes up with one thing main.

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At a CA$5 million market cap, there may be vital leverage right here and whereas junior explorers are a troublesome promote proper now, I just like the risk-reward ratio.

Full Steel Minerals Corp. (FMM:TSX.V); (CA$.165/$.158): I purchased the $0.08 secondary providing in mid-2020 after which watched the inventory commerce as much as CAD $0.65 final Might whereas ready for the personal placement to obtain regulatory approvals which arrived in late April with the shares free to commerce in very late August. Because of delays in touchdown the undertaking, which we initially thought was “within the bag,” traders have determined to dump their low cost inventory adopted by December tax-loss promoting leading to a worthwhile commerce however a disappointment, nonetheless.

I’m giving Full Steel till mid-month and if no undertaking is forthcoming, I’ll take earnings above CA$.15 and transfer on.

Maintain. No goal.

This completes the preliminary evaluation of the 2022 record of portfolio elements. Good luck in 2022.

Observe Michael Ballanger on Twitter @MiningJunkie. He’s the Editor and Writer of The GGM Advisory Service and might be contacted at [email protected] for subscription info.

Initially educated in the course of the inflationary Nineteen Seventies, Michael Ballanger is a graduate of Saint Louis College the place he earned a Bachelor of Science in finance and a Bachelor of Artwork in advertising earlier than finishing post-graduate work on the Wharton College of Finance. With greater than 30 years of expertise as a junior mining and exploration specialist, in addition to a stable background in company finance, Ballanger’s adherence to the idea of “Onerous Belongings” permits him to focus the apply on choosing alternatives within the world useful resource sector with emphasis on the valuable metals exploration and improvement sector. Ballanger takes nice pleasure in visiting mineral properties across the globe within the endless hunt for early-stage alternatives.

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Disclosure:

1) Michael J. Ballanger: I, or members of my instant family or household, personal securities of the next firms talked about on this article: Getchell Gold Corp., Northisle Copper and Gold Inc., Arizona Metals Corp., Western Uranium & Vanadium Corp., Allied Copper Corp., Norseman Silver Ltd., Goldcliff Useful resource Corp., and Full Steel Minerals Corp. My firm has a monetary relationship with the next firms referred to on this article: Getchell Gold Corp., Northisle Copper and Gold Inc., Arizona Metals Corp., Western Uranium & Vanadium Corp., Allied Copper Corp., Norseman Silver Ltd., Goldcliff Useful resource Corp., and Full Steel Minerals Corp. I made up my mind which firms can be included on this article based mostly on my analysis and understanding of the sector. Further disclosures are under.
2) The next firms talked about on this article are billboard sponsors of Streetwise Reviews: Allied Copper Corp. and Goldcliff Useful resource Corp. Click on right here for necessary disclosures about sponsor charges. As of the date of this text, an affiliate of Streetwise Reviews has a consulting relationship with Allied Copper Corp. and Norseman Silver Ltd. Please click on right here for extra info. The data offered 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 writer and never of Streetwise Reviews or its officers. The writer is wholly accountable for the validity of the statements. The writer was not paid by Streetwise Reviews for this text. Streetwise Reviews was not paid by the writer 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. 
4) This text doesn’t represent funding recommendation. Every reader is inspired to seek the advice of together with his or her particular person monetary skilled and any motion a reader takes on account of info offered right here is his or her personal accountability. By opening this web page, every reader accepts and agrees to Streetwise Reviews’ phrases of use and full authorized disclaimer. This text shouldn’t be a solicitation for funding. Streetwise Reviews doesn’t render basic or particular funding recommendation and the knowledge on Streetwise Reviews shouldn’t be thought-about a advice to purchase or promote any safety. Streetwise Reviews doesn’t endorse or suggest the enterprise, merchandise, providers or securities of any firm talked about on Streetwise Reviews. 
5) Every so often, Streetwise Reviews LLC and its administrators, officers, workers or members of their households, in addition to individuals interviewed for articles and interviews on the positioning, might have an extended or brief place in securities talked about. Administrators, officers, workers or members of their instant 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 printed 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 Getchell Gold Corp., Western Uranium & Vanadium Corp., Allied Copper Corp., Norseman Silver Ltd., Goldcliff Useful resource Corp., and Full Steel Minerals Corp., firms talked about on this article. 

Michael Ballanger Disclaimer:
This letter makes no assure or guarantee on the accuracy or completeness of the info offered. Nothing contained herein is meant or shall be deemed to be funding recommendation, implied or in any other case. This letter represents my views and replicates trades that I’m making however nothing greater than that. All the time seek the advice of your registered advisor to help you along with your investments. I settle for no legal responsibility for any loss arising from the usage of the info contained on this letter. Choices and junior mining shares include a excessive stage of danger which will consequence within the lack of half or all invested capital and subsequently are appropriate for knowledgeable {and professional} traders and merchants solely. One must be accustomed to the dangers concerned in junior mining and choices buying and selling and we suggest consulting a monetary adviser in case you really feel you don’t perceive the dangers concerned.

All charts and graphics are offered by the writer.



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