All eyes are on the Middle East, making stock picking a difficult undertaking. Many readers are waiting for a safer time to deploy capital.
However, in my view, metals & mining stocks will rise to the top. Some fear an extended period of high oil/gas/diesel prices will hit the global economy.
That’s probably true, but there will be pockets of strength alongside areas of weakness. I am not downplaying the tragic Middle East developments, but readers should be prudent in protecting themselves from the most-at-risk sectors.
All industrial/manufacturing companies are exposed to rising fuel/logistics costs. By contrast, metals/mining companies should be a relative safe-haven.
There will be near-term demand destruction, but the longer-term trend for copper, nickel, platinum, palladium, gold & silver (among others) remains intact.
As the world continues to bifurcate into West vs. East, western countries urgently need critical metals from safe, prolific jurisdictions like the U.S. & Canada.
PTX Metals (TSX-v: PTX) / (OTCQB: PANXF) is advancing two flagship assets, the 22,700 hectare W2 Cu-Ni-PGE project, close to winter road infrastructure at the gateway to the Ring of Fire region, and Shining Tree, neighboring significant deposits in the Timmins Gold Camp.
The management team/Board has been one of the most active open market purchasers. This month CEO Greg Ferron increased his holdings to ~3.8M shares.
Earlier this year Dir. Moore increased to ~5.4M, and Chairman Veerecke to ~1.2M. Dir. Marques has ~3.6M. Management closed tranche one of a twice upsized equity raise that will bring in ~C$6.75M. PTX’s pro forma enterprise value is ~C$17M (at C$0.105/share).
PTX is especially attractive compared to other poly-metallic juniors up 400%+ from 52-week lows. For example, a group of eight was +1,080% as of April 24th {see table above}.
Yet, PTX is unchanged from a year ago, despite the metals it’s tied to being up +71%! {Please check out the new corp. presentation}.
The flagship is the 100%-owned W2 project, a Cu/Ni/Pt/Pd/Au play on the SW edge of northern Ontario’s famous Ring of Fire region. It’s less than 140 km from Orla Mining’s operating (200K+ oz/yr) Musslehwite Au mine.
All five metals that W2 is leveraged to are critical to Canada, the U.S., & Europe, making W2 a prime candidate to be fast-tracked, and possibly eligible for gov’t grants + other financial/logistical assistance.
Key infrastructure, most notably roads & power, but also high-speed internet & housing are being developed more rapidly as Canada races to replace the U.S. as its primary economic & strategic partner. Importantly, W2 is nearer to infrastructure, for instance, closer to Pickle Lake.
Wyloo owns the advanced (BFS-stage) Eagle’s Nest project (the poster boy Ring of Fire asset) ~60 km away from W2. Wyloo plans an initial 15-year mine-life, producing 15,000 tonnes Ni, 6,000 tonnes Cu, 70,000 oz Pd, 22,000 oz Pt + 340 tonnes cobalt.
Management is optimistic regarding ongoing relations with surrounding First Nations. A proactive, collaborative, wide-ranging arrangement involving jobs, shared economic benefits & new infrastructure is well underway.
W2 was already significant BEFORE the in-situ value of an estimated 2.3B Cu equiv. pounds (resource target, not a resource estimate) soared. That in-situ target resource value is ~C$14.4B (with front-month Cu futures at $6.28/lb.).
NOTE: Although there’s substantial drilling (120 holes) + exploration studies/data in support of a 2.3B pound Cu Eq. resource target (incl. 2M [combined] Au/Pt/Pd ounces), that figure is NOT NI 43-101 compliant.
W2 alone is valued at ~C$0.012 per resource target pound in the ground. Compare that to S. American Cu giants with a median valuation of ~C$0.04/lb.
Since investors also get Shinning Tree and other assets, W2 itself is more accurately valued at under a penny per Cu Eq. lb., making it very attractive to companies like;
Anglo American/Teck, Rio, BHP, Agnico, Freeport, Glencore (Canada), Evolution Mining, Kinross, Vale (Canada), IAMGOLD, Sumitomo, Mitsubishi, Mitsui, Alamos, Gold Fields, Fresnillo, South32, Orla Mining, Hudbay, KoBold Metals, Wyloo, Juno, etc.
Having noted the historical nature of the deposit, management sees potential for it to be significantly larger than the indicative 2.3B pounds. Therein lies the investment opportunity — subject to more time & money, drilling W2 could be quite impactful.
Assay results from an initial 5,000 m drill program confirm the presence of significant Cu-Ni-PGE mineralization within the CA1 zone, and continue to expand the footprint of the system within the Central Target area.
Drill hole W225-13 expanded the CA1 zone to a sizable 1.0 x 1.2 km. Drilled to 406 m, and ending in mineralization, it returned 214 m of combined intercepts, incl.: 107.1 m at 0.28% Cu Eq. and 68.3 m at 0.46% Cu Eq.
Those widths are good, but the grades were not that exciting. Management believes it can and will do better. PTX’s new geological model for the Central Target shows strong alignment between geophysical anomalies & drilling, improving confidence in the model.
Step-out drilling extended CA1 northward, with further infill & southern expansion planned. Results support a large, growing system, with more precise targeting of higher-grade zones underway.
The Company expect further drill results this quarter, plus the completion of a paragenesis study, and the initial technical interpretation of the mineralized system.
In addition, metallurgical flowsheet development is advancing to assess recovery & concentrate quality. CEO Ferron is cautiously optimistic with preliminary findings. Later this year management plans up to 20 holes, incl. a few deeper ones.
Results from this fully-funded, substantial program could provide enough data on structure, geology, & geometry to attract a strategic investor at W2. The timing couldn’t be better as Ontario gets serious about developing the Ring of Fire, and Eagle’s Nest delivers positive headlines.
Momentum in the Ring of Fire?!?
Clearly, Canada can no longer rely on the U.S. for its economic wellbeing. The transformation from economic & security ties with the U.S., to seeking closer alliances with Europe, China, Japan & India is not gradual. It’s fast-moving, there’s real urgency.
That means faster permitting times, real action not just words, for metals, mining, oil/gas & infrastructure projects. In my view, few areas stand to benefit as much as NW Ontario.
Switching gears, PTX has advanced its understanding of Au mineralization at the 75%-owned Shining Tree project (near the Timmins gold camp), through high-resolution magnetic surveys & structural analysis.
This district-scale property trends from Newmont’s Borden Mine, through IAMGOLD’s Côté mine. Shining Tree is < 15 km due west of McFarlane Lake Mining’s (C$90M valuation) multi-million oz Juby Au project.
Following trenching results of up to 16 m at 9.0 g/t Au, five priority exploration targets were identified, with the Ronda target drill-ready. Studies have revealed previously unrecognized geological structures.
PTX plans drilling at Ronda and continued exploration work to unlock promising under-explored zones. A modest five-hole program around a high-grade vein could be done in May/June.
While the main attraction is clearly W2, Shining Tree is an attractive asset valued around zero by the market. Why consider PTX Metals? Two drill programs starting in the next several months could deliver exciting news.
It has a poly-metallic resource target of 2.3B Cu Eq. pounds in the midst of a commodities bull market. Planets are aligned, ample cash raised, First Nations consultations are going well, and the Provincial gov’t is helping the Ring of Fire advance prudently, and more rapidly.
Few companies are better positioned in Ontario than PTX Metals (TSX-v: PTX) / (OTCQB: PANXF). Readers are encouraged to see this new corp. presentation for further insights.
Disclosures/disclaimers: The content of this article is for information only. Readers fully understand and agree that nothing contained herein, written by Peter Epstein of Epstein Research [ER], (together, [ER]) about PTX Metals, including but not limited to, commentary, opinions, views, assumptions, reported facts, calculations, etc. is not to be considered implicit or explicit investment advice. Nothing contained herein is a recommendation or solicitation to buy or sell any security. [ER] is not responsible under any circumstances for investment actions taken by the reader. [ER] has never been, and is not currently, a registered or licensed financial advisor or broker/dealer, investment advisor, stockbroker, trader, money manager, compliance or legal officer, and does not perform market-making activities. [ER] is not directly employed by any company, group, organization, party, or person. The shares of PTX Metals at investments in small-cap stocks can result in a 100% loss of invested funds. It is assumed and agreed upon by readers that they will consult with their own licensed or registered financial advisors before making investment decisions.
At the time this article was posted, PTX Metals was an advertiser on [ER]. Peter Epstein owned shares in the company acquired in the open market.
Readers understand and agree that they must conduct due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reason whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts & financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events & news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.
