Ducks in a Row: Canadian Critical

I have to admit I have been, and continue to be, frustrated with my investment in Canadian Critical Minerals (CCMI.V). But my frustration is now with the market rather than the company.

Ian Berzins, Canadian Critical’s CEO was pleased to report revenue of USD$378,000 for the month of October. $528,000 in Canadian dollarettes. Even after paying for the rental of the Bayhorse (BHS.V) ore sorter, the trucking costs and the costs of actually running the sorter, this should leave CCMI with a useful amount of money in the bank.

Importantly, CCMI was able to ship over 1000 tons grading 4.67% Cu, 0.74 g/t Au and 44.7 g/t Ag. The objective is to only truck higher grade material and 4.67% copper is well worth trucking.

To get that high-grade material the ore sorter has to be set to reject rock which is mineralized but lower grade. CCMI can do this because it is in the process of getting its on-site mill permitted and restarted. When the mill can be restarted CCMI will have a stockpile of 42,000 tons of rejects grading between 0.4% Cu and 1.0% Cu. It will also have “60,000 tonnes of fine material that is too fine to be sent to the sorter. Fine material is expected to grade at 1.39% copper, 0.29 g/t gold and 11 g/t silver.”

October was record-breaking and the reality is that winter is setting in at the Bull River Mine. The ore sorter works best with dry rock, less well with wet rock and not at all with frozen rock. I’m hoping that CCMI has invested in a few big tarps to keep the weather out of enough of the stockpile to continue operations. The other aspect of winter is Department of Highways load restrictions. Trucks cannot be as fully loaded and that will impact trucking costs. The good news is that the load restrictions only last for a few months. Shipping smaller amounts of higher-grade ore can minimize the cash impact.

As I mentioned the other day, Berzins has been cleaning up the CCMI balance sheet. There is a pending transaction for the company to sell its interest in the Theirry Copper project and the company did a flow-through share raise of $950,000. The company also did a shares for debt settlement to extinguish a $250,000 payable.

So, a junior resource company with actual revenue, a mill, an actual COPPER mine, a pending transaction worth several million dollars and an improving balance sheet: why the Hell is it trading at $0.035 for a market cap of $9.36 million dollars?

The usual “this is the worst market for junior resource companies ever” is, no doubt, a big part of the reason. However, I suspect a bigger part of the explanation for the poor share performance is that no one has ever heard of Canadian Critical. The only reason I heard about them is that I am in pretty constant touch with Graeme O’Neill at Bayhorse Silver and knew about the lease of the BHS ore sorter to CCMI. I took a look, liked what I saw, and made a small investment. But, I fear, that has not been enough.

Which is why I was delighted with the announcement that CCMI has engaged the services of Impact Deck, an investor relations firm based in Montreal. Berzins, comments in the press release, "We are excited to begin working with ImpactDeck to ensure our story reaches a broader audience. CCMI is one of very few revenue generating companies in the Canadian junior mining space and this fact does not seem to be reflected in our current share price."

While I am generally sceptical of “investor relations”, adding a little marketing to the CCMI mix could improve the share price substantially. James McFarland, ImpactDeck’s principal, is a young guy with his way to make in the world. With CCMI as a client, McFarland has a great story to tell. Coming out of the venerable Renmark Financial, McFarland will have a decent “book” so CCMI will, at least, be on the radar of some brokers and analysts. Which is what it takes to create the buying interest which pushes a share price higher.

If one of those brokers or analysts takes a few minutes to look at CCMI there is every chance that he or she will see how well Berzins has lined up the ducks. The catalyst event, the actual permitting of the mill and mine, is some distance off, but continued revenue from the stockpile ensures that CCMI will survive long enough to thrive. Not always the case in the wild world of junior resource companies.

(Disclaimer: I hold shares in CCMI.V. I may purchase or sell shares at any time. This is not investment advice. Do your own due diligence. Call the CEO.)