Junior Mining Sector 'the Best Value in the Space'

The StreetSmart Live! Broadcast on Jan. 26, 2021, focused on metals and why now is a good time for investors to be looking at them and the mining space. John Newell, independent analyst and portfolio manager, and John Feneck, mining sector expert and president of Feneck Consulting, addressed the status of the current metals market. CEOs of the three metals-focused companies comprising the Metallic Group of Companies Group Ten Metals, Metallic Minerals and Granite Creek Copper discussed their projects.

John Newell kicked off the broadcast by making a technical case, with the use of about 10 charts, for higher metals prices in all categories and a likely run-up in senior and junior precious metals shares.

He showed that inflation is returning, and the strength of the U.S. dollar is trending downward. The Gold Miners Bullish Percent Index has lost 91%. The metals have met all prices on the short-term charts. Both the XAU:gold and the JDXJ:gold ratios are pounding against resistance.

"When you go through that resistance, you get the bang and the hush of no resistance," Newell said. "That's really where we're trying to gather the strength for these stocks to start fundamentally representing themselves in the marketplace."

Next, John Feneck echoed Newell's comments, highlighting that "tremendous opportunity" lies in precious metals mining stocks because one can get leverage to the gold or silver price as well as in other metals, including copper (in an uptrend for weeks), nickel (now trading at the one-year high), platinum and palladium.

To take advantage of the impending commodities supercycle, Feneck advised investors to do their homework, research the companies and try to determine which ones will do better than others. Ideal stocks are those facing some pressure, he said, such as perhaps coming out of tax loss selling in late 2020 or having recently undergone a corporate event, like a merger or acquisition. He also encouraged investors to understand what stocks they own and to communicate with investor relations teams or CEOs to learn more about those companies.

Then Greg Johnson briefly explained what the Metallic Group of Companies is and what the common strategy of the companies under its umbrella. Formation of the team of highly experienced and highly successful explorers began in 2016, he said. Today, the group encompasses Metallic Minerals Corp. (MMG:TSX.V; MMNGF:OTCMKTS), of which Greg Johnson is the CEO; Granite Creek Copper Ltd. (GCX:TSX.V; GCXXF:OTC); and Group Ten Metals Inc. (PGE:TSX.V; PGEZF:OTCQB; 5D32:FSE).

Their approach is to explore in mature brownfield districts that have potential for scale and grade and existing infrastructure, Johnson said.

"In over four years, we've been able to put together four, potentially world-class assets in three companies," he added. All three companies are close to moving from the discovery to the resource stage.

CEO Tim Johnson discussed his company, Granite Creek Copper, the most recent addition to the Metallic Group, in 2019. To consolidate the southern portion of the high-grade Minto Copper District in the Yukon, the company complemented its Carmacks project with two adjacent acquisitions, first the Stu project and then resource-stage Copper North, both now called Carmacks North.

Investors should look at Granite Creek, Johnson said, because of its high grade, the synergies realized through the addition of Copper North, the probable favorable economics of a mining project and the property's prospectivity.

The company aims to identify 1 billion pounds of contained copper at its Yukon asset to attract a major player, its long-term goal.

President and CEO Michael Rowley talked about his company, Group Ten Metals, with a CA$16 million market cap. He described 2020 as a "fabulous year" for its Stillwater West project in Montana's Stillwater District, home of the world's highest-grade platinum and palladium producing mines, supported by the positive outlook for platinum group metals (PGMs) and gold and the demand for electric vehicles. After acquiring half of the district in 2017, Group Ten proved Stillwater West's geology is of Platreef style, Rowley said.

The company is now working on a maiden resource estimate, expected in H1/21, for which it is well funded, having $2.5 million in the bank.

"It's a big system," he said. "We think we have targets with potential for multimillion-ounce PGM deposits, nickel, copper and cobalt as well.

Moving from the discovery to the resource stage should add value, Rowley said, as it is a critical point of revaluation for any junior.

Feneck pointed out that because Group Ten is known for its palladium, the company does not get credit for the nickel at the project.

"[The stock] is cheap versus peers right now. That's the opportunity," he said.

As for Metallic Minerals, Greg Johnson said that in 2020, a big year for silver, the company conducted its biggest exploration program at its Keno Hills project in the Yukon's Keno Hills District, one of world's highest-grade producing silver districts.

There, Metallic Minerals identified 12 multikilometer-scale targets in soils and geophysics and started drilling those, results of which are pending. The company is continuing to explore the western part of the district, hoping to find known and new mineralized trends there.

Metallic Minerals also made progress last year at its recently acquired La Plata silver-gold-copper project in Colorado.

Newell closed the broadcast by discussing various charts showing how the three companies and the prices of their metals are doing.

As for copper, it broke out of his eight-year downtrend, is moving up and has nearly hit the $3.80 mark. The metal looks as though it will have a big run-up like the one it had in 2004. Copper's big picture target is $6.25.

The target for Granite Creek Copper, now at about $0.18-0.20, is $0.36-0.40 on a measured move.

"To me, Granite Copper looks excellent as a junior copper play," Newell said.

Regarding platinum, having reversed its downward course, is on its way to hitting its first target of $1,200. The second target is $1,470, and its old high resistance is $1,900.

Group Ten Metals met its first target of $0.42. The second target is $0.70 and the third, is $0.95.

Silver is trying to hit the third target of $35. Its old high resistance is $50.

"Silver looks exceptional, especially," said Newell.

Metallic Minerals already hit its three targets and then some, and now looks as though it is headed to a second series of targets.

Overall, the outlook for all three companies looks good, as they are trending in the right direction.

"The best value in the space is in the junior sector right now," Newell said. "[Juniors] are cheap historically, and they offer the most upside of the sector if in fact they find joy in the drill bit or expand the resource or are part of a merger or a sum of the parts makes a greater whole. I'm extremely bullish on the junior exploration space, especially ones in good jurisdictions, like Canada as an example, like the United States."

View the broadcast here:

Disclosure for Streetwise Reports:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: Group Ten Metals, Granite Creek Copper and Metallic Minerals. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Group Ten Metals, Granite Creek Copper and Metallic Minerals, companies mentioned in this article.

Streetsmart Live! Disclosures:
1. The following companies discussed in this broadcast have paid a fee to participate: The Metallic Group of Companies: Group Ten Metals, Metallic Minerals, Granite Creek Copper.
2. This broadcast does not constitute investment advice. Each viewer is encouraged to consult with his or her individual financial professional and any action a viewer takes as a result of information presented here is his or her own responsibility. This broadcast is not a solicitation for investment. StreetSmart Live does not render general or specific investment advice and the information should not be considered a recommendation to buy or sell any security. StreetSmart Live does not endorse or recommend the business, products, services or securities of any company mentioned here.
3. Statements and opinions expressed are the opinions of the presenters and not of StreetSmart Live or its officers. The presenters are wholly responsible for the validity of the statements. StreetSmart Live requires presenters to disclose any shareholdings in, or economic relationships with, companies that they write about. StreetSmart Live relies upon the authors to accurately provide this information and StreetSmart Live has no means of verifying its accuracy.
4. From time to time, StreetSmart Live and its directors, officers, employees or members of their families, as well as persons interviewed for broadcasts and interviews on the site, may have a long or short position in securities mentioned. As of the date of this broadcast, officers and/or employees of StreetSmart Live (including members of their household) own securities of the following companies discussed in this broadcast: Group Ten Metals, Metallic Minerals, Granite Creek Copper. The Metallic Group of Companies and Group Ten Metals, Metallic Minerals and Granite Creek Copper do not have a consulting relationship with StreetSmart (description available at https://www.streetwisereports.com/disclaimer/html#consulting).
5. Greg Johnson is the chairman and CEO of Metallic Minerals and owns securities of the company.
Tim Johnson is the president and CEO of Granite Creek Copper and owns securities of the company.
Mike Rowley is the president and CEO of Group Ten Metals and owns securities of the company.
6. Disclosures for John Newell, portfolio manager at Fieldhouse Capital and president and CEO of Golden Sky Minerals Corp.:
I, or members of my immediate household or family, own securities of the following companies discussed in the broadcast: none
I personally am, or members of my immediate household or family are, paid by the following companies discussed in the broadcast: none
My company has a financial relationship with the following companies discussed in the broadcast: none
Funds controlled by Fieldhouse Capital hold shares of the following companies discussed in the broadcast: none
7. Disclosures for John Feneck:
I, or members of my immediate household or family, own securities of the following companies discussed in the broadcast: Granite Creek Copper
I personally am, or members of my immediate household or family are, paid by the following companies discussed in the broadcast: Group Ten Metals
My company has a financial relationship with the following companies discussed in the broadcast: I am a consultant to Group Ten Metals
Funds controlled by John Feneck hold shares of the following companies discussed in the broadcast: Granite Creek Copper
8. Disclosures for Cyndi Edwards:
I, or members of my immediate household or family, own securities of the following companies discussed in the broadcast: None
I personally am, or members of my immediate household or family are, paid by the following companies discussed in the broadcast: None
My company has a financial relationship with the following companies discussed in the broadcast: None