Eagle Plains: Its Time to Shine
I have been pounding the table that we had a low coming since at least August. I did an interview on September 1st and I said we were at or near a tradable low. Then a week ago I followed up with another article saying investors should recognize we had a low in September as I predicted and one way to make a lot of profit was to buy the lowest price, most beaten up stocks. I listed ten stocks that were at yearly lows and were selling for less than $.05. And since clearly I think this is a great time to be picking up good high quality stocks on the bargain table cheap, I did an interview talking about an alternative to the cheapest of the penny dreadfuls, the ultra high potential projects that are like money in the bank.
There is an interesting stock that is neither a sub $.05 stock nor drilling a billion dollar project even if it has fingers in a lot of pies. That would be Eagle Plains (EPL-V). It is unlike any other company I own and follow because it goes its own way.
While it is known as a project generator and brings in over $1 million a year in net income for the past five years the greatest value to shareholders was in the form of shares in top notch projects which were spun out to EPL shareholders. That total is greater than $100 million worth of shares in Copper Canyon and Taiga Gold Corporation handed to Eagle Plains shareholders.
Eagle Plains is preparing two more possible spinouts in the future. The company is drilling the Vulcan Sullivan style SEDEX deposit located about 30 km from the famous Sullivan Mine in production for 92 years. Sullivan style deposits are more familiar to investors as Black Smokers, an underwater hydrothermal vent spewing silver, lead, and zinc minerals. In mid-October EPL release preliminary results from a three-hole drill program conducted this year. Of course assays still take eons to get results but the company used XRF devices to get some idea of what the drilling revealed while they await formal assays.
The results from this year were highly encouraging with local geological experts commenting that hole VU22004 is believed to be the most significant technical discovery ever drilled in the region outside the original Sullivan Mine. Funding and permits are in place for another drill program starting in Q2 of 2023. Depending on which source you want to believe, estimates for the total value of ore coming out of the 92 years of production from the Sullivan Mine were between $20 billion and $40 billion so Eagle Plains hitting another Sullivan style deposit next year would rocket the shares higher to Mars and beyond. And Eagle Plains would then spin that project out to shareholders.
But Eagle Plains has yet another arrow in its quiver. On the 9th of November the company put out a press release announcing packaging all of their many Royalty Assets into its own subsidiary. That of course is exactly what you would do if you were preparing to spin that sub out to existing shareholders just as they have done several times before.
The most important of the thirty total royalties would be the 0.5 to 2.0% royalty on the McQuesten project including the AurMac property presently being drilled by Banyan Gold led by the beautiful and talented Tara Christie. Tara is one of the most experienced placer miners in the world and is married to John McConnell, president and CEO of Victoria Gold located nearby to the Banyan operation so her company is well versed with all of the issues and opportunity in the Yukon.
Eagle Plains has a royalty between 0.5 to 2% on claims underlying the Airstrip and Powerline deposits currently part of a 60,000-meter drill program being conducted by Banyan. In June Banyan released a current 43-101-resource estimate of 3.99 million ounces of gold in a pit-constrained shell.
Tim Termuende, President and CEO estimates the royalty for Eagle Plains on the AurMac/McQuesten project of Banyan would total about 20,000 ounces currently but obviously will increase with more drilling and discoveries. At Friday’s price of gold that would represent a $47,000,000 windfall to Eagle Plains shareholders as the gold is mined by Banyan.
Based on last Friday’s price for EPL at $.185 that gives the company a total market cap of just over $20 million CAD. Given the blue sky potential of a possible Sullivan discovery and a single royalty on Banyan gold worth $47 million over time a valuation of $20 million seems absurd. When you figure in $10 million in cash and $1 million net income a year, clearly the market doesn’t understand the potential.
I have been pounding the table for many months that we were approaching a low for the metals and resource stocks. That took place in September and October just as I forecast in advance. We are going to have a six to seven month blast higher in the metals and in resource stocks. When I see a correction coming, I will do my very best to call it just as I did in August of 2016. But gold has shot higher by $170 in just six trading days so a short pause would be perfectly healthy and natural.
I think Eagle Plains can be bought safely in here regardless of any short-term swings in the market. Many of the really cheap sub $.05 shares I wrote about on the 3rd have already climbed 50% to 300% in a week so it’s time to look for the highest quality stocks.
I am a shareholder of shares bought in the open market and Eagle Plains is an advertiser. Naturally I am biased. You need to do your own due diligence.
Eagle Plains Resources Ltd