Eloro: The Market is Grabbing a Clue

I did a Substack about Eloro (ELO.T) on March 1. At the time it was trading at $3.30 for a market cap of $240 million.

Today it is looking to close at $4.00 for a market cap of just under $300 million.

The obvious explanation for the share price rise is that we are getting closer to the 43-101 Resource Estimate which the company predicted would be ready at the end of March. If it’s on schedule, and 43-101s are often a bit late, we will finally have an estimate of the silver and tin at Iska Iska. Potentially, there could be a billion tons of economic rock.

321Gold’s Bob Moriarty’s best guess was “400 million to 700 million tonnes of $100 to $125 CAD a tonne rocks at today’s prices”. As I said in my Substack, I think Bob is low.

Resource Estimates are always something of a moving target. For example, when Bob made his guess, silver was trading $20-21 USD an ounce, right now it is hovering between $22 and $23. Not a huge move, but certainly one which the guys who do mineral valuations for a living at the majors will plug into their Iska Iska spreadsheet.

While I am delighted with a $0.70 move in only a couple of weeks, ELO.T is very much a long term hold for me. The 43-101, assuming it is somewhere between Bob’s guess and my optimistic number, is likely to drop the starting flag for the eventual sale of the Iska Iska property. Perhaps as a single deposit, perhaps as two, separate, mines.

In any event, I am pretty certain that the sale price will be a multiple of the current market cap of $300 million.

The Eloro train is leaving the station and I will leave you with one quote from CEO Tom Larsen, in a motherlodetv.net interview, “At the end of the day we may have a billion tons of commercial material.”

[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.

I currently hold shares in ELO.V and while I have no plans to sell anytime soon (actually I am buying), I reserve the right to take profits as they arise.]