Canadian Palladium Makes a Debut
I first wrote about a company named 21C last May. The company has a pair of “green energy” projects, palladium in Canada and cobalt/copper in Europe and easily had the worse name of any company I ever knew. I hated the name 21C. What exactly did that mean?
Well, no thanks to me, the company changed the name to one of the very best names I have ever heard, especially valuable right now. They are now Canadian Palladium with the same symbol, BULL-V. Good timing as palladium went on a tear last week with prices touching $2602 USD before settling down. I would be quite comfortable with a correction; I hate it when any commodity goes curvilinear.
South Africa has gone stupid and socialist. What the government charges for electricity is lower than the cost of production. The mines across the country are getting killed with a constant lack of power. South Africa produces 78% of the world’s platinum and about 45% of the world’s production of palladium. We easily could have a multi-year shortage of both metals. Right now the near contracts for palladium carry a premium to the distant months indicating a severe shortage of the metal.
There are only a few juniors working in the platinum palladium space. Palladium has had a hell of a run lately while platinum has been about as exciting as watching paint dry. Personally I’d like to see the entire precious metals marketplace have a nice scary correction, bottoms are easier to see. But month after month the metals just keep climbing.
I love the fact that 21C changed their name to something highly meaningful. Just knowing what the company is about will bring in new buyers in what is a small area of the metals.
Canadian Palladium is well cashed up, just having completed a $4 million dollar placement as well as having Eric Sprott as a major investor. In the recent private placement the company issued 33 million shares and 33 million warrants exerciseable at $.18 which are already at the money. Should the price continue higher, that would bring in an additional $6 million which would pay for a lot more drilling. Days ago the company announced a 10,000 meter drill program designed to expand an existing 523,000 Pd ounce equivalent resource. Drilling has commenced.
With an $18 million market cap and $1.1 billion worth of metal in an inferred resource, Canadian Palladium is well positioned for an advance on any real success in their ongoing drill program. I don’t know if the palladium shortage reflects a real lack of physical metal but for now and at today’s price for palladium BULL looks like a good bet if you like the numbers on the metal.
Canadian Palladium is an advertiser and I have participated in a private placement in the past. Naturally that makes me biased so do your own due diligence.