I missed out on the Hercules Silver $BIG.V run from $0.20 to $1.50. Damn. But I opened a position at $1.19 for a couple of reasons.
BIG’s property in Idaho at Cuddy Mountain is on what geologists describe as a “suture” between the Izee terrane and the Old Ferry terrane. I wrote about this geology a few weeks ago in my stack “Hercules Silver: Is this close to Bayhorse?”. Sutures create the geological gaps into which mineralized fluids can flow. $BHS.V shows silver near surface with a fair bit of copper. BIG has the same rhyolite-hosted silver but Hercules has done IP which suggested a deeper, copper-bearing, structure.
Unlike Bayhorse, Hercules has been drilling to gain insight into what it hoped will be a blind porphyry copper system at depth. In its October 10 press release, it reported its first deep hole,
HER-23-05, the first hole to test a large-scale (>1.8km) blind chargeability anomaly, intersected 185.29m of 0.84% Cu and 111 ppm Mo from 246m to 431.2m, including 45.33m of 1.94% Cu. The hole ended prematurely due to drilling challenges encountered at a post-mineral dyke, however observations in subsequent holes indicate that the mineralization likely extends significantly below HER-23-05 at 435 meters.
Since this release, Hercules has had a 23 million dollar investment from Barrick Gold. It has also been drilling and delivering core to the lab.
As with any junior on a bit of a hot streak, the rumours are flying. “Best core I’ve ever seen”, “Rick Rule said it was the best supergene he has seen”. Here’s Rick himself:
https://twitter.com/i/status/1724907306838876204
Gwen Preston is BIG positive as well,
https://youtube.com/shorts/5nsNuRgyqfk?si=cei8AlH2T0p9pfrB
I have a lot of faith in Rick and Gwen and had been watching BIG through November. But I didn’t pull the trigger for the simple reason that the actual assays of the more recent holes were some distance away. Now, I suspect, they are imminent.
The fact that BIG is $0.30 off its November 16 high of $1.50 was also a factor. Junior resource companies are fueled by emotion. FOMO, buzz, and glimpses of unassayed core all combine to push prices beyond a sustainable level. As the expression goes, the shares get ahead of themselves. Seeing the shares consolidate over the last month is encouraging.
Reality is going to arrive with the assays on the next few holes. The winning lottery ticket would be if most of those assays confirmed the results of the original deep hole. Possibly with a bit of gold as that is common in porphyry systems.
More likely, because Hercules is drilling blind, the next few holes will be a mixed lot with significant intervals of mineralization but with a good deal of ambiguity as well. In which case the impatient retail money will overreact to the negative and I’ll be able to buy more shares cheaper.
My investment thesis on BIG rests on the Barrick commitment, the likelihood of a porphyry and the persistent rumours that the core shows chalcopyrite and bornite which are easy to detect and strongly suggest high-grade copper. With the Barrick cash and geological expertise, Hercules can do the exploration drilling which is required to confirm and begin to define a porphyry system.
The endgame for BIG could come very quickly. If the drilling suggests a decent-sized porphyry system Hercules will become a takeover target even without a 43-101 Mineral Resource Estimate. There are just not that many undeveloped copper porphyries left in the world. Idaho is a very mining-friendly jurisdiction, there is power crossing the property and the project is road accessible from a highway. The property has grandfathered exploration and mining permits.
One other bit of data which tipped my bid, Graeme O’Neill, Bayhorse’s CEO, told me that his people on the ground along the Snake River, which runs along the boundary of the Izee/Old Ferry terranes, are reporting a lot of staking activity. Which suggests a district level of interest.
[Disclosure: Graeme O’Neill is a friend. I own shares in Bayhorse Silver (BHS.V), a lot of shares, and may buy more or sell some or all at any time. I now own shares in BIG.V and may buy more or sell some or all at any time. This is not investment advice. Do your own due diligence. ]