Palisade Research's 2 Must Own Gold Stocks For 2018

Palisade Research January 18, 2018 Category: Research

Hello Subscriber,

While I’m writing you this, gold is on its way to $1,400. . .

That makes gold up 8% since this time last month.

No wonder many of the largest asset managers in the world are piling into the yellow metal. . .

They are positioning themselves for gold’s new bull-market.

But more importantly - are you setting yourself up to make fortunes also?

What comes next will be the continuing of a multi-year bull market.

Investors that are set up properly stand to make a fortune.

“Okay, great. So, what are those two must own gold stocks?”

You’re right – I told you I have not one, but two, gold stocks you need to have in your portfolio right now.

But before I tell you, I need you to know just a couple things. . .

Mining stocks are still historically cheap.

And an upward trend has been clearly established.

Therefore, the likelihood is that commodities will move upward in the coming years. And when that happens, junior mining stocks will make a lot of people rich.

But, like any kind of investing, you need to pick the best stocks.

Since September 2013, our firm – Palisade Global Investments – has invested over $40M into the junior resource sector.

We take pride in our ability to do. . .

? excellent research

? identify the winners

? Invest our own capital - have skin in the game

? And most important, generate great ideas for our readers

That’s why I am about to share with you our two favorite junior mining stocks and why we like them.

Actually, we like them so much that we own 12.5% and 17% of these two companies.

One last important thing. . .

Before going any further, it is important to make sure that this is not a recommendation to buy. Our views are biased. And you need to always do your own research before investing any of your own capital.

Alright Then – Our Two Must Own Gold Stocks for 2018 Are. . .

Goldcorp's Next Takeover Target - Triumph Gold Corp. (CVE:TIG, FRA:8N61, OTCMKTS:TIGCF)

In May of 2016, Goldcorp signaled their entrance into the Yukon’s gold land in a big way by taking over Kaminak Gold for a whopping $520 Million.

Kaminak's key asset was the 100%-owned Coffee Gold project, which hosts over 5.2 million ounces of gold between the indicated and inferred categories.

The project is open-pit, good grade, and vast in scale.

The Coffee project represents Goldcorp's first foray into the Yukon, but the company's recent moves make it clear it won’t be their last. . .

One of those projects is Freegold Mountain, which is located south of the Coffee Gold project.

Freegold Mountain is 100%-owned by Triumph Gold Corp (CVE:TIG, FRA:8N61, OTCMKTS:TIGCF), a little known company with a whole lot o’ gold.

When Goldcorp was approached by Triumph’s Chairman, John Anderson, they were relatively unaware of Freegold Mountain. That is despite the fact that the project is already host to
3.3 million gold ounces – or 5.3 million gold equivalent ounces.

That means Triumph Gold is the real deal.

We believe this could be a take-over target – and sooner rather than later.

A wise person once said that, “one should not make a bet without previously knowing what the outcome will be.”

In many ways, speculating in junior mining stocks is like gambling.

But it does not have to be. . .

With proper due diligence, reading between the lines, and some imagination – investors can make highly educated bets.

Let’s take a closer look at Goldcorp's investment in Triumph Gold.

I have broken it down into 3 main points.

1.) The Infrastructure

Kaminak's Coffee Project is likely to be Goldcorp's core focus in building their first Yukon mine. One major issue for advancement of the project has been accessibility.

Coffee is isolated and only accessible by boat or air.

Triumph Gold – on the other hand – has a government-maintained road running the length of the project from south to north.

That road could become critical to the development of Coffee, if Goldcorp wishes to develop the mine. The cost of trucking as opposed to boat or air is considerable.

Therefore – putting Triumph's gold project aside – the company's location has a strategic importance required by Goldcorp.

The Yukon and Canadian Government's announcement last September includes a 100% upgrade of the Freegold Mountain road – which is one of the only properties in the Yukon already equipped with a government-maintained road. It also connects Triumph's property to Western Copper & Gold's Casino Project, which is adjacent to Goldcorp's Coffee Project.

2.) The Jurisdiction

The jurisdiction is key for any mining project.

For instance, last August the government of Guatemala shut down Tahoe Resource's Escobal Mine. Escobal is the 9th largest and 2nd highest-grade silver mine in the world. Timing of a mine re-start is unknown.

Unfortunately, events like these aren’t rare. . .

Mining is risky. Politics are a great unknown. Regimes can change – and with them come new policies towards foreign miners.

Fortunately, mining jurisdictions that have a track record for stability do exist.

And Canada is one of those. . .

Goldcorp and other majors are searching through safer mining jurisdictions – like Canada – to find their next acquisitions.

Freegold Mountain has the project size needed to attract a major’s investment, and also in a safe and stable jurisdiction.

3.) Major Upside for The Stock’s Price

The third reason for investing is the incredible upside potential of Freegold Mountain.

The project is vast, and drill holes keep coming back finding gold.

Some very interesting targets have gone by unchecked.

Until now. . .

You see, the idea during the early 2000s when gold prices were rallying was to find as many ounces as possible. Grade was not considered to be an important factor.

The result is that Triumph outlined a massive low-grade resource.

High-grade holes were found – but never followed up on.

Triumph's recently appointed V.P. of Exploration, Tony Barresi, spent months analyzing historic data and identifying untested targets that could unlock a new story - high grade gold at Freegold Mountain.

Tony shared his vision with Goldcorp and they bought in. . .

They invested $6.3 million at $0.52 cents a share for 19.9% of the company.

The money was quickly put to use – drilling the untested targets.

In 2017, Triumph completed a massive 12,900-meter drill program at Freegold Mountain.

The major objective of the 2017 drill program was to show that the Revenue diatreme was part of a very large porphyry-related mineralizing system.

This was proven when Triumph drilled 245 meters of 0.59 g/t AuEq (gold-equivalent) at Revenue, including 58.65 meters of 1.48 59 g/t AuEq.

The drill program also confirmed at least three types of superimposed mineralization, including:

? Early porphyry style mineralization;

? Late hydrothermal breccias and replacement style mineralization;

? Near surface enrichment of gold.

Each style of mineralization at Revenue could be a stand-alone target.

But the most exciting discovery is the opportunity to explore for high-grade, near surface gold and copper.

Freegold Mountain always had its size, but now it looks like it can have its grade as well.

“So then, what's Next for Triumph Gold?”

Triumph Gold is still relatively unknown, but management has made big efforts to communicate their story to new investors.

Triumph has managed to raise $8 million in the past 2 years and attracted a world-class partner – Goldcorp.

Other notable investors include Gold 3000, their Chairman John Anderson, and us – Palisade Global

Despite raising significant capital, the share structure remains tight. There are only 60.5 million shares issued.

BUT DON'T FORGET

Triumph is sitting on over 3 million ounces of gold. . .

And as the chart below shows you, Triumph Gold is one of the cheapest company’s investors can buy on a per ounce basis.

It’s important to let you know that there is the significant copper and molybdenum credits on the project.

Nearly half of the 5.3 million gold-equivalent ounces are made up of those two metals.

Copper is on an unbelievable run – reaching 5-year highs – which could provide another reason for investors to gain exposure.

Triumph Gold is currently trading around $0.34 cents – implying a $21M market cap. This is below the price of the last placement where Goldcorp paid significantly more.

This is despite improving commodity prices and a major drilling campaign just completed.

So, what is the endgame?

We believe that Triumph Gold has all the factors that make it a takeover target.

At the time of Goldcorp's investment, Triumph was worth $28M. Typical takeovers are done at a 40-80% markup, meaning Goldcorp could – in theory – purchase the company for just $40M.

But There are two problems with that. . .

One – the market would not readily appreciate why Goldcorp paid $520M for Kaminak, when two months later they could acquire a similar size project for just $40M. It would undermine the value of the Kaminak acquisition.

Second – shareholders of Triumph Gold, including Palisade Global, are not ready to sell at such a cheap valuation. Kaminak was acquired for $100 per ounce. Triumph Gold trades at just $6.50 per ounce.

If Goldcorp pays the same price per ounce as they did for Kaminak, that would imply a valuation 15x times Triumph's current share price.

Granted, Kaminak had a feasibility study on its resource, and it’s doubtful that Triumph will reach such a detailed economics on its resource anytime in near future.

But, the key is Triumph's geography. A purchase of Triumph would add significant ounces for a future mine while also providing Goldcorp with a direct route to Kaminak in the form of a critical government-maintained road.

This alone would be worth $100/ounce for Triumph.

Is there any wonder Goldcorp already owns 19.9% of the company?

In the mining sector, there is a saying. . .

“Follow the smart money.”

We have purchased over $1 million in shares from the open market in the past 12 months and continue to add to our position.

This makes Triumph Gold our largest position at Palisade Global.

And we couldn’t be more excited. . .

Rediscovering A Prolific Gold Belt From the Aztec Times – Mexican Gold Corp. (CVE:MEX, FRA:4QW1)

We like this company so much that we actually own 17% of the issued and outstanding shares. And when you take warrants into consideration; our position is closer to 22%.

That’s almost 1/4 of the entire company.

Bear markets breed incredible opportunity.

Tens of millions of dollars in past exploration work can be decimated by the market – resulting in valuations that are not reflecting the whole picture.

Such is the case with Mexican Gold Corp.

Here’s a little background. . .

We first got involved in Mexican Gold in February 2017. At the time, the company was named Source Exploration. It had recently undergone a roll-back and was having trouble getting financed. The market had lost faith in management and the company desperately needed a makeover and new strategic partners.

Despite these problems, we quickly realized something. . .

Their asset held world-class potential.

Over the past several years, 19,000 meters of drilling had been completed, with nearly every hole hitting gold mineralization.

A back of the napkin calculation led us to believe that around one million ounces had already been found.

And yet, the market cap was trading at a paltry $3 million.

We knew we had to take advantage of this. . .

Palisade Global and a close network of investors stepped in and infused over $2.7 million into the company.

We changed the name to Mexican Gold and attracted Ex-Goldman Sachs Portfolio Manager, Ali Zamani, as Chairman of the company.

John Anderson – who I just told you about was key in connecting Goldcorp to Triumph Gold – also joined the board of directors.

Within just five months, the necessary work was completed to put out a maiden resource.

On August 1, 2017, the company released their initial resource showing 719,000 gold-equivalent ounces in the inferred category and 304,000 gold-equivalent ounces in measured and indicated.

The grade averages around 2 grams per ton in an open pit scenario.

At current prices, the market cap of the company is $12M – giving an implied value of just $12 per ounce in the ground.

But there is more to the story. The resource itself is open at depth and along strike.

That means there is a lot more gold to find.

The 2017 drilling campaign pulled out some monster holes.

Mexican Gold first put the market on high alert when it announced it had drilled 77.2 meters of mineralization in resource expansion drilling.

A month later - they delivered.

The highly anticipated Hole LM-17-ED-40 was an absolute game charger. . .

It yielded 94 meters of mineralization over three zones.

The main zone, which is the largest of the three, returned 54 meters grading 6.91 g/t AuEq, including 38 meters at 9.24 g/t AuEq.

Hole LM-17-ED-40 was accompanied by three other holes that we believe extend Mexican Gold’s resource depth by 30% and width by 40%.

You can see the gold in the rocks. . .

The last assay news release ended 2017 on a promising note.

The company followed up its high-grade success by drilling 14 meters of 7.18 g/t AuEq.

The hole was drilled at surface reconfirming our belief that Eldorado/Juan Bran will be a high-grade, open pit mine.

The hole was also drilled a lot further northwest along the Dike Contact Zone.

This matters because the Las Minas Project - Mexican Gold’s Flagship property – as a whole contains eight mineralized zones, with the initial resource covering just two of them in Eldorado/Juan Bran and Santa Cruz.

This confirms that the grade is higher along the Contact – which is still open for expansion.

We believe this trend continues northwest all the way to the Cinco Senores Zone.

This has been somewhat confirmed - Mexican Gold drilled two holes right through the Dike. But one hole still had 2 meters of 1.17 g/t AuEq.

Mexican Gold is on the cusp of drilling the mineralized zone outside of the Dike. And we believe it's the same Dike that connects Eldorado/Juan Bran with Cinco Senores.

If this is the case, there is no doubt Las Minas will be a multi-million gold ounces deposit.

Still, we cannot forget about their other zones, which have received minimal exploration but show just as much potential.

It's no surprise that Mexican Gold is on the radar of all the major gold companies.

“So, what's next?”

The company plans on expanding their resource by continued drilling at El Dorado/Juan Bran and Santa Cruz zone.

The company also plans on further exploration drilling at Cinco Senores, and finally getting a rig to the Las Minillas zone.

Funds will also be allocated to field exploration at Santa Cruz and Changaro, and at the Pueblo Nuevo Concession, which has the potential to host a high-grade epithermal gold system.

We believe Mexican Gold's plans and goals for 2018 will bring nothing short of exciting news.

And that’s what you need to have a rising share price.

Comprehensive Research agrees with us. . .

They put out a report - Mexican Gold Corp: Potential to Build One of The Highest-Grade Mines in Mexico – forecasting Mexican Gold’s target price at $1.15.

That’s a 340% gain at the time of writing this.

In the past few months, only a limited amount of drilling has occurred yet this added significant gold ounces to their deposit. And more drilling is happening.

We believe that Mexican Gold’s project - Las Minas - has the makings of a world class deposit.

We will stay put as shareholders, buying more shares whenever we can, and fully expect a take-over bid from a larger gold company at a much higher share price.

Palisade Global Investments Limited holds shares of Triumph Gold and Mexican Gold. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.