DeZwarteRidder schreef op 14 november 2017 22:03:
Metallis Resources (MTS/MTLFF)
Dr Peter Lighfoot is a world renown expert on nickel sulphide deposits and is advising Garibaldi on this world class discovery. It seems his theory is that the ore body is actually a string of deposits, a “pearl necklace” of sorts. This part of Garibaldi’s last press release on drilling is telling to me:
“While the nickel-copper-rich system remains open in all directions at Nickel Mountain, at least two kilometres of prospective ground exist to the east-southeast while a northeast trend of geophysical anomalies and surface mineralization continues for at least six km.”
This is important for those of us heavily invested in Metallis Resources whose Kirkham property borders Garibaldi just over 4 KM to the “southeast”. Essentially, GGI just confirmed that we are half way there, to the border at Kirkham. If the multiple deposit theory proves true and extends to Kirkham, Metallis shareholders could become very rich. I have 90% of my exposure to this play in Metallis, not Garibaldi, which I recommended to premium GIL readers initially at 25 cents in early August. Despite selling off a ¼ of my position around $1 to remove any principal risk, last week I bought all of those shares back and extra around $1.40 per share. I realized that this could be an opportunity of a lifetime and plunged back in last Thursday/Friday.
Eric Sprott financed Metallis at $1.10 for 2 million shares just a couple of weeks ago. He has been buying in the open market regularly as high as $1.88 for 400,000 shares on October 13th (the stock closed at $1.45 on Friday). A hugely compelling fact is the tight and tiny share structure in Metallis which barely has a $30MM CDN market cap at $1.45 per share! The leverage here could be enormous and I believe that there is a pretty good chance that MTS can outperform GGI between now and the end of the year. How can that scenario happen?
Metallis moved drill rigs to “Thunder North and Thunder South” a few weeks ago, which is near the border of Garibaldi. It is important to note that initially the company drilled a completely different part of their property testing a gold/copper prospect. Those drill results will be out first, perhaps in the next 2 weeks. But if drilling at Thunder North intersects massive nickel/copper sulphides similar to Nickel Mountain, MTS will fly. For example, if Metallis has one third of the resource along the same trend as Garibaldi, their market cap would almost quadruple from $30MM to $110M if Garibaldi stayed at these levels (again, GGI is currently trading at a $330 ish million market capitalization)
Now, I believe GGI will run to $7-8 into/after their next batch of assays are released. MTS should hit $2.50-$3 just following GGI so that’s lmost a double as well. But if Metallis confirms high grade nickel/copper sulphides in November, their share price could trade to $5 easily, which would still only be a $100MM market cap. Metallis’ extremely attractive share structure just means that there is very little stock available in the float! Buyers will likely have to pay up, probably WAY up, in the coming months.
For what it is worth I only asked Eric Sprott one question last Friday. “Do you believe the Nickel Mountain ore body extends into Kirkham?” His reply was “yes I do”. This is obvious just from his actions in the market but it was nice to hear it as well.
Risks
To be crystal clear, there is still a lot of risk in both of these stocks. Even if Metallis is destined for $20 per share, there will be violent pull backs along the way and whip lash like volatility. That said, some circumstances warrant rolling the dice. I’m in a great position because I plan to sell the ¼ I bought back at $3 which will have given me a profit on what I put in as a total initially. Then, I’ll hold ¾ plus of my stake for free versus those of you that might just get in now around $1.50 on MTS. You may want to sell half at a double and let the rest roll if this thing plays out like I think it will. That way, you simply don’t have to sweat the gyrations and can give things time to unfold into 2018.
There is a lot of smoke at Kirkham near the fire than is Nickel Mountain so there is better than a 50/50 chance that Metallis has some of this rich ore body on its property. However, the odds are likely less than 50/50 that they hit some of it with the first few drill holes! These are big properties so some patience may be needed and one thing that may slow this train down is old man winter.
Just remember, it is new discoveries that drive junior resource share prices more than any other factor. Being early in a big discovery can make investors wealthy and that is why we play in this risky and cyclical arena. GGI and MTS guarantee ACTION in the coming days, weeks, and months. I do not think it’s too late to get involved but would encourage adding soon, at least entry sized positions then on any pullbacks. I would suggest adding MTS up to $1.75 and GGI to $4.50. If the gap around $1.21 gets filled on the MTS chart it would be time to back up the truck.
Lastly, I would like to acknowledge the guys at Bull Market Run. They were definitely on top of this situation before anyone else and are the reason that I was tipped off early on. They do great work and have gone the extra mile in keeping investors updated!
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