High Summer, Low Market

At the moment most of the companies I am invested in are close to their year’s, if not all time, lows. Which is ugly. But it is also typical in high summer.

For exploration and drill stories in North America right now, wildfires permitting, is peak work season. Which means there are a lot of samples and core awaiting assay. Traditionally, and even more so with the disruption of COVID, the labs are backed up and it’s anyone’s guess as to when results will be released. Frustrating.

At the same time the precious metals markets are just churning along largely directionless. A couple of weeks ago it looked a bit as if silver would take a run. Silver bugs always think that when silver hits $25, $50 is the next stop. And, one of these days it will be, but not this time.

My favourite silver/tin explorer, Eloro (ELO.T) is set to release its long awaited Mineral Resource Estimate on its Bolivian silver/tin project at Iska Iska around the end of August. It had been trading around $3.15 which was the price on its most recent, over-subscribed, private placement but it took a nice bounce on Friday closing at $3.45. Expectations are running high as drilling at Iska Iska has never once failed to disclose mineralization. So given the size of the project, the guesses as to the size of the MRE range from 500 million tons to 1.5 billion tons of economic rock.

Now, here is one of the perversities of the junior market: almost any number, even 1.5 billion tons, may trigger a drop in the share price. Weird? Yup. Buy on rumour, sell on news, even good news, is a very real thing. Which could be a huge buying opportunity but, once again, frustrating. (My own theory behind this phenomenon is that for a certain sort of retail investor the “dream” is what they are buying into and that dream is always punctured by reality no matter how good that reality actually is.)

Frankly, with ELO, the day to day stock price gyrations are largely immaterial. Iska Iska is going to be sold and, I suspect, sold soon. The only question is: how much? The MRE is about the independent verification of what is actually for sale. As I have written before, the big companies who are potential buyers have been plugging the drill results into their own models. What they need is third party verification that these results are correct. The 43-101 compliant MRE does exactly that.

Literally, down the road from Iska Iska is another Tom Larsen led project, Cartier Silver (CFE.CSE). Very early days here with IP scans extending the target zone. However, in a press release dated June 29, CFE announced that it had begun a 3300 meter, five hole drill program “in the general vicinity of the artisanal silver mine”. With one drill turning it will take a while to complete the program but the labs in Bolivia seem to have a decent turn around time.

It wouldn’t be the junior market if the Cartier Bolivia property was not touted as “the next Iska Iska”. Which is just what Cartier did in its New York investor presentation which is worth a read. (I can’t get the direct link to work…but the presentation is on the front page of the Cartier Silver site.)

Drilling into IP anomalies directly under a 200 gpt artisanal silver mine is about as close to a sure thing as you get in junior exploration. CFE should post good results but, realistically, they could be much better than merely good. Cartier has been trading up a bit touching $0.90 a few days ago. I have to think that the initial drill results will be released in September in the wake of the MRE from ELO. I added a bit to my position in early July at around $0.60 so I am happy already.

I wrote about Ventripoint Diagnostics (VPT.V) last week and the company has just announced a collaboration with Ascend Cardiovascular, a leading provider of cardiovascular IT solutions. My understanding is that Ascend is going to integrate VPT.V software into its already successful cardiovascular IT platform on a reseller basis. Ascend has been in the cardiovascular IT space for decades and should open many doors for VPT’s AI enhanced 3D imaging technology.

At the same time, there are apparently sales conversations occurring with the Mayo Clinic and at least one “trust” in the UK’s NHS. A confirmed sale to either entity would be a huge credibility boost for VPT. Something to look forward to in the Fall.

My only actual gold producer, Orezone (ORE.T) released solid Q2 operating results on August 9. Its Bomboré mine produced 35,482 gold oz in Q2 and the sale of its gold allowed the company to pay down principle of $19.1 million under the Coris Bank senior debt facility and retain cash of $32.3 million at June 30, 2023.

Which you would think would be driving the share price upwards. Nope. The Bomboré mine is in Burkina Faso and that country is facing an Islamist insurgency. Now, the fighting such as it is, is nowhere near the actual mine but articles such as this one from the Washington Post keep investors wary. Add mercenaries from Russia’s Wagner group to the mix and the perceived “country risk” is keeping ORE.T’s share price down. But analysts are rating the shares a buy with TD Securities setting a $2.00 target.

The share price dropped below $1.00 as I write this on Friday afternoon. It would not surprise me at all if it drops a little further even though all indications are that ORE will produce 140,000+ ounces of gold in 2023. The political situation in BF will likely resolve in the next few months and all it will take for ORE to bounce is some steady upward movement in the price of gold. I will be watching, stink bid at the ready.

This week people will be paying a bit more attention to the markets. However, at a guess, most of the important news will be later in the month or early September. Meanwhile, this is an excellent time to go fishing, play golf, enjoy Summer. I know I am.

[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.T, CFE.CSE, VPT.V and ORE.T and while I have no plans to sell anytime soon I reserve the right to take profits as they arise.]