Metals Up for Rebound.
May 16, 2022
In the entire financial universe nothing ever goes straight up or straight down with perhaps the exception of the 10,267-clipto currencies led by Bitcon. Corrections and rebounds happen on a regular basis.
I follow the Daily Sentiment Indicator closely as my regular readers are well aware. The DSI for the Stock Indexes and most foreign currencies hit near record lows in the last three weeks but have turned higher as the DSI for the Dollar Index has been dropping making the market for resources more favorable. Monday the 16th of May is a full moon and would be a great time for a rebound in shares including resource stocks that have been hammered over the past month. If there is a rebound, get cashed up.
I’m on record as saying I believe we are in the greatest financial collapse in history. I use as a comparison the DOW Jones dropping 89% between September of 1929 to July of 1932. But even during that period there were big rallies that managed to convince the ordinary investors, indeed even the “experts” that the worst was over.
So basically I think bonds are going to crash, the stock market is going to crash; the clipto currencies have already lost $1.7 TRILLION. In short, investors are going to dump everything that will catch a bid to get the margin clerk off their backs.
So I’m going to do my very best to find stories that are so compelling that they will hopefully remain afloat as the rest of the fleet sinks to the bottom.
Braveheart Resources (BHT-V) certainly qualifies by every measure. The company has two 100% owned properties. One has 100 million pounds of high-grade CuEq at the Bull River Mine in Cranbrook, B.C. It’s a project that has had $200 million spent on mine development for production between 1976 and 2010 and $100 million on existing usable infrastructure. Bull River has a 6.5-year life and an awesome ROI of 92% on an investment of $6.5 million. The project comes with $30 million worth of already mined ore at the surface.
The 2nd major project, a Copper-Nickel deposit, the Thierry Mine at Pickle Lake, Ontario contains 1.3 billion pounds of copper at 1.6%+ and an after tax NPV of $488 million at a 6% discount rate giving a 36%+ IRR with a fourteen year mine life. At today’s price for copper as I write, that is $5.3 billion worth of copper in the ground. That should be worth something.
Preproduction costs for the first three years in the latest PEA call for a total of $322 million offset by operating cash flow of $180 million so only $142 million would be required to put the 4,000 TPD mine back into production. Payback is a tiny 3.1 years.
It is no secret that we are not headed for a copper and nickel shortage. We are there.
If the world is to transition to an EV world we have to have a lot more nickel and copper than is being produced today. Both of these mines will be put back into production. While inflation is obviously an issue with any numbers people are guessing today, if diesel and electricity go up, so does the price of copper and nickel.
If Braveheart has an issue that has created the absurd situation where a company sitting on almost $6 billion worth of copper, nickel, gold and silver has a market cap of $17 million it is because the company is run by mine builders. They have a good website and lots of nice technical data but the market simply doesn’t understand the story. The stock is absurdly cheap and down 35% in the last month as the margin clerks ran havoc with the resource sector. The low for the last year is $.06 and frankly I don’t consider a 20% drop much of a risk.
I made a lot of money in early 2016 when the market went nuts buying a lot of stocks selling for less than $.10. This was over $.10 a month ago and buying today and selling at the high in the last 30 days would make almost a 50% profit. That’s worth doing.
Braveheart is an advertiser so I am biased. Do your own due diligence.
BHT-V $.075 May 13, 2022
RIINF-OTCBB 224 million shares