Month: April 2021

If you’re still waiting to buy physical silver to start a stash, you’re now playing financial Russian Roulette… with four rounds in the cylinder.

The chat rooms talk about buying silver and gold when they decline in price. “If silver goes down to 22, I’m all in!” “When these ‘excessive’ premiums drop a few dollars, I’m backing up the truck.”

1) Emotion and Sentiment

Believe it or not, buying on a price drop goes against human nature.

It is a bit strange, because if you go to the store and find your favorite grass-fed beef on sale, you’ll probably see how much you can stuff in the freezer. But back to the metals.

How many people do you know who purchased silver in the spring of 2020 when it fell briefly to $12? Or in 2008 when it fell to $9… before rising to $50 less than three years later? Did you?

Another big change, seemingly contradictory — is that increasing numbers of well-studied investors are buying whether the price goes up or down, with retail supply getting continually whittled away.

Their sentiment seems not as heavily impacted as others, who remain fearful of declines, or — as is still the case with most Americans — are not yet aware of how quickly government-induced inflation is eating away at the value of their pensions and the greenbacks in their wallets.

During market turbulence, the news invariably causes a decline in sentiment, making it difficult even for those of us who’ve been in these markets for many years, to go ahead and buy.

One of the most important characteristics of an investor who succeeds long term over the majority who do not, is the ability to “Buy when others are selling and sell when others are buying.”

It’s like the habit of going to the gym. At some point it never gets any easier. No matter how strong your original motivation was, it still can be hard to push yourself out the door and keep at it.

To handle buying more silver when sentiment is negative — like it is now — simply go out, as Galactic Update’s Stewart Thomson says, and “Buy less than is rational.” How much is less important than keeping the habit.

This is where a periodic auto-buy setup works so well. The decision has previously made and, since it’s automatic, less second-guessing gets in the way.

2) Premiums

A decade ago, the premiums didn’t change much. Now there’s a different metric. When the price drops, people buy more.

Supplies dry up because silver miners are producing less and just as important, legitimate sellers — who are not trying to gouge anybody — raise premiums because they’re paying way more for supply. If they sell what they have for a silly paper price unreflective of market reality, then they have no product.

To make matters worse for the contrarian who’s waiting for a price drop, premiums rise to the point that their cost goes up even more than the drop in the physical price. For example, the going rate for American silver Eagles used to be about three bucks over a bullion coin of the same weight.

These days, an Eagle can set you back at least $10 over spot. So if you’re waiting for $22 silver (and, should it actually get there), you’ll pay $32 per coin for the privilege — That’s if you can find any.

Blame Canada. If you’re one of our unfortunate neighbors to the north, and you didn’t buy any silver some years ago when the Cando was trading at par with the US dollar, you now get to pay an extra 20% because of a much less favorable exchange rate.

A double-cost “premium” by a different name? Pardon our Canadian friends for having a hard time “backing up the truck” just now!

3) Supply vs. Demand

In the Old Days when the price dropped, you could simply go in and get what do you wanted, because people stopped buying and there was plenty around, in part due to global silver production running a surplus each year.

Yields at the relatively few primary silver miners have been dropping for over a decade, but the decline in total ounces produced just started showing up in the annual figures during the last few years.

2021 is likely to mark the fourth consecutive year in this pattern. Thus, a profoundly altered and systemic supply metric is now in play.

An Historic Anomaly. Tying all of this into a bow are two structural changes — each “a first” for anyone now alive.

As mentioned above, we’re well into a structural ongoing supply decline — made worse because most silver used in modern applications is not recoverable, and is thus lost for reuse. The trickle of additional new silver production coming online is simply not going to change this anytime soon. Slammed against this drop is a sea wave of new demand from both investors and industry.

Like palladium, which went through the same supply demand alteration (deficit) on a smaller scale, the result before long is going to be an upside price explosion.

Also, whether or not you believe in “conspiracy theories,” silver, unlike any other commodity on the board has, for the past few decades been massively “manipulated” by short sellers who push paper silver derivatives into the market in order to keep the true price well below where, all things considered, it should be.

In the process, they profit by the resulting volatility in both directions.

The distortion between price and value has been so out of kilter for so long that it’s safe to say none of us really has a handle on what that price should be. Before long, we’re likely to find out…

All in all, hanging around for “More affordable” silver prices doesn’t really make cents. It doesn’t make dollars either.

      

Source: Maurice Jackson for Streetwise Reports   04/26/2021

Peter Ball, the CEO of NV Gold, updates Maurice Jackson of Proven and Probable on his company’s recently announced partnership with Hochschild Mining on a project in the Cortez Gold Belt.

Maurice Jackson: Joining us for a conversation is Peter Ball, the CEO of NV Gold Corp. (NVX:TSX.V; NVGLF:OTC).

A pleasure to have you join us, as NV Gold has several updates to provide shareholders, including some breaking news involving Hochschild Mining Plc (HOC:LSE). Before we begin, please introduce readers to NV Gold and the opportunity the company presents to shareholders.

Peter Ball: NV Gold is 100% focused on making a gold discovery in Nevada. It was formed a few years ago by some of the legends of exploration from Nevada, which has attracted several strategic investors that have invested in NV Gold, specifically for the talent, and the project portfolio that we control a hundred percent of in Nevada, and the opportunity that we are 100% focused on…which is making a discovery in Nevada!

Maurice Jackson: In previous discussions, we focused on the Sandy and the Slumber projects, respectively, and I know you have some important updates to share with us regarding them. But I want to jump right into your recent press release, as NV Gold has some very exciting news to share with the market, which involves Hothschild Mining.

Sir, take us to the Cortez Gold Belt, to the SW Pipe Gold Project, which is located in north-central Nevada, and share with us the company’s latest accretive success.

Peter Ball: The SW Pipe Gold Project is going to be an interesting project and we are very excited that Hochschild recognizes the opportunity there. First of all, the SW Pipe project was acquired for staking costs a couple of years ago. We recognized the location, which is immediately adjoining and surrounded by Newmont Corp. (NEM:NYSE) and Barrick Gold Corp. (ABX:TSX; GOLD:NYSE), which, of course, now has formed Nevada Gold Mines as a joint venture in their mining operations in the Cortez Trend and several other areas in Nevada. So location is everything when you are exploring.

The second interesting part of the SW Pipe is that it has a historical, which currently is non-compliant, resource that was drilled off years ago in the range of 40,000 to 45,000 ounces of low-grade gold within the first 300 meters of surface, in strike length about 1.2 kilometers by 800 meters.

First, we got the location. Second, we have gold on the project. And third, we’re sitting right next to and within the Cortez Trend. If we focus on our neighbors directly adjoining the project, Nevada Gold Mines, they have the Robertson, Pipeline, Cortez mines, and the Gold Rush and Four Mile discoveries as recent as 2015 or 2016. So they’re operating a gold mine. We’re right next to them. Hochschild recognizes that sometimes when you see a project sitting next to a major, never a better place to further test a project and get a little crazy in some exploration. So we’re excited. It’s an interesting and exciting time for NV Gold to partner up on this particular project.

Maurice Jackson: Now, is the goal there to twin the historical?

Peter Ball: The goal is to look at what’s happening next door at the Pipeline, which I believe mined 12-and-a-half or 13 million ounces of gold, and to go deep on drilling right next door on SW Pipe. We’re chasing the lower plate rocks similar to next door at the Pipeline project. And we’ll see what happens. It’s a US$10 million option earn-in for 75%, where at the end of the day, after a potential even bigger cash payout, we will still retain a 2% NSR (net smelter royalty), which could be even more valuable. It’s going to be one of those programs that investors who invest in the Cortez Trend is going to want to watch. And Hochschild is a great group. They like to swing for the fences per se. So here we go. We’re going to get this project going here later this spring.

Maurice Jackson: Now this is one heck of an accomplishment, and it’s such a big, big feather in your cap. We referenced the Sandy and Slumber projects earlier. What can you share with us regarding the assay results there?

Peter Ball: We finished the Slumber Gold Project in early January, [and] we would look to have the assay results and the internal geological modeling out to the market here probably in the next seven to 10 days. And then we will be onto the Sandy Gold Project, which we’re still waiting for the assays, which I suspect will probably be available mid-May.

Just a quick reminder, the Slumber project is in northwestern Nevada, by Winnemucca. It is a similar geological model that we’re trying to look at as the old Sleeper project, which is one of the highest-grade gold discoveries and highest-grade gold projects that was ever mined in Nevada.

And then the Sandy Gold Project is located just outside of Yerington, or down by Reno, in the southwest portion of Nevada. And that was a very interesting project. We ended up doubling our reverse circulation drill program up to just over 5,000 meters from the original 2,000 meters planned. The rocks looked very interesting. We think we’re on to something that may be at depth at Sandy and the assays will tell us where to go, or where to vector. And we’ll be doing an IP geophysical program on the project to combine the assays that we’ll finally get here the next two to three weeks.

With the geophysics, put them together, and we’ll see where the core rig will go in regards to testing the project with some deep holes. And again, it’s in the Comstock area. It’s one of the most well-known mined areas in Nevada and which built Nevada a hundred years ago.

Maurice Jackson: Peter, you must be an accomplished chess player. As much of the focus has been on the Sandy and Slumber, and then we have today’s announcement with the SW Pipe Gold Project. I’m just curious, are there any other pending joint ventures (JVs) out there that are in the works that you might be able to touch on?

Peter Ball: That’s a good question. Interesting, I mean, with Nevada being one of the top places to explore with the large portfolio of projects, that we haven’t touched in 9 or 10 years as we were focusing on other projects. We have been touring other majors and intermediates and a couple of juniors are sniffing around on our projects. We have signed some confidentiality agreements, or CAs, on these projects. We recently just completed another couple of tours three days ago. These are projects that do deserve the drill bit to further test these projects.

Again, all 14 of our projects have good exploration on them. They all contain gold and have good trenching, drill holes, along with geophysics and some geochemical signatures indicating potential opportunities for the various project. So yeah, I believe that we have the opportunity to get maybe another couple of joint ventures in 2021.

But on top of that, I wanted to touch quickly on our incredible find of our new exploration manager, Thomas Klein. We were lucky enough to steal him from Newmont. He was one of their senior geologists always tasked with finding the next big discovery in Nevada. And with a track record of multiple discoveries to his name, we are looking at some interesting projects to acquire here very shortly that we believe could change the face of NV Gold in 2021, and provide a very aggressive exploration program rollout, testing multiple projects in 2021.

Mr. Klein was a perfect addition to our team. We’re so pleased to have him on the team and he knows a couple of our team members very well.

Maurice Jackson: Speaking of those other team members, you have some of the most accomplished names in the resource space serving in management roles and advisory roles. Who are those prominent names on your team?

Peter Ball: Yeah, great question. I mean, as I mentioned earlier, this company was formed really by three individuals and originally founded by our chairman, John Watson, who also is our largest shareholder. John Watson was joined by a couple of his good friends, Dr. Quinton Hennigh, and Dr. Odin Christensen. They’ve known each other for many years, and when you’re good friends and all you love to do is find gold, you’re not worried about making money for yourself. It’s just making that discovery. They got together, put together a portfolio, which about four years ago. I sold these projects into the company from another company that I was running.

So yes, nothing better than Quinton and Odie and John as our board members and also technical advisors of what to look at. And you now add in Thomas Klein. And of course, we have another great, fantastic geologist/investment banker/broker/individual, Alf Stewart, out of Vancouver, a good friend of mine helping us push forward also over the last couple of years on the board.

Maurice Jackson: Those names don’t show up on the balance sheet nor the income statement, but they’re so important on the geological and commercial success of NV Gold. We hope that readers appreciate the value proposition that you’re not just having the ground, but with the people. The team in many regards must be equal if not important to the project. And you’ve just done an exceptional job here. I just have to foot-stomp that. That’s a big, big feather, again, in your cap as well.

Peter Ball: Thanks, Maurice.

Maurice Jackson: Leaving the people, let’s look at some numbers. Mr. Ball, what is the current capital structure for NV Gold?

Peter Ball: Again, as large shareholders, our chairman being the largest shareholder, I’m one of the top shareholders. With Eric Sprott and a couple of great institutions out of the U.S., Crescat Capital, EMA, and another few out of Europe, we focus on ensuring our share structure is tight.

So issued shares right now are about 64.5 million (64.5M) shares outstanding. We’ve got a number of warrants that are actually in the money. We’ve got about 13M warrants outstanding, of which about 9M are at $0.20 of those and 4.5M are priced at $0.40 warrants. We have $1.7M of warrants in the money. So fully diluted we are at about 84.5M shares outstanding.

A little quick note on the options. Every time we issue options, we usually issue them at a 35% to a 50% premium to our trading price. So we can chase the price, not give ourselves some nice low options. We’re going to have a busy year and some great shareholders. It’s a solid share structure, nice and tight.

Maurice Jackson: Before we close, what would you like to say to shareholders?

Peter Ball: At NV Gold, again, we are in one of the best places in the world to explore for gold. We have some of the best technical team members that take ownership of what we do every day at NV Gold. Management has taken a big stake. We have taken a big stake in this company. We have no plan on selling and thus are aligned with the shareholders.

It’s going to be probably one of our biggest years. Our goal is to make a discovery and create value. We have several projects and we thoroughly test them. If it doesn’t work out, we’re onto the next one. We keep our share structure tight for that day when we hit that one project, and we’re confident that we’re going to hit. We’re looking to have multiple projects tested this year. It’s going to be a very busy year, and with a solid share structure, good investors with patience, a good team. . .we are excited.

We see gold having a good push later this year. It looks like it’s in the cards. The street, or the herd mentality, is that the market’s going to get a bit stronger and we’re into a metal supercycle. I don’t get into that part of the market, but I’ve been in the industry since, probably before I was born. So I’m an optimist.

Maurice Jackson: Peter, what do you think are the next steps or upcoming catalysts for NV Gold?

Peter Ball: Well, first of all, we have the news out on Hochschild. That’s going to be key and that’s going to be a really interesting program to follow along. People are going to want to put us on their radar if you’re not an investor currently in NV Gold.

Other catalysts will be some assays coming out soon, project modeling and interpretation on our Slumber and Sandy projects. That’s going to give us an idea of how we tackle both of these projects on our follow-up drill programs. I suspect it’s going to be some deeper, core-driven programs to test the depth at Slumber, because we’ve already advised the market on Slumber that we ran into some water problems. In other words, our reverse-circulation (RC) rigs couldn’t handle the amount of water that was flowing out of the ground, so we couldn’t drill a few of the targets we wanted to, our priority targets.

At Sandy, we are seeing some good visuals in the RC chips at depth. We want to test that project with core also, understand the structures of the veins that we saw the chips in, and allow us to vector in. So you’re going to see some news flow in Slumber and Sandy on the next steps.

You usually never make a discovery on a gold project on the first go. We’re also looking to add other projects that will also be drill-ready, and we will look to drill them later this year. It’s our goal is to accelerate everything on every level.

So lots of newsflow, lots of catalysts, and with a tight share structure and our shareholders know that we put all the money into the ground and we manage the money very well for our shareholders and minimize the dilution.

Maurice Jackson: Peter, if readers want to get more information about NV Gold, please share the contact details.

Peter Ball: Our website is www.nvgoldcorp.com, I may be reached at peter@nvgoldcorp.com or by phone at (888)393-8993.

Maurice Jackson: Mr. Ball, always a pleasure to speak with you. Wishing you and NV Gold the absolute best, sir.

And a reminder, I’m a licensed broker for Miles Franklin Precious Metals Investments, where we provide unlimited options to expand your precious metals portfolio, from physical delivery, offshore depositories and precious metals IRAs. Call me directly at (855) 505-1900 or you may email Maurice@MilesFranklin.com. Finally, please subscribe to www.provenandprobable.com, where we provide Mining Insights and Bullion Sales, subscription is free.

Maurice Jackson is the founder of Proven and Probable, a site that aims to enrich its subscribers through education in precious metals and junior mining companies that will enrich the world.

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Source: Peter Epstein for Streetwise Reports   04/26/2021

Copper is gaining momentum, according to Peter Epstein of Epstein Research, and Pampa Metals is “cashed-up” and drilling for new discoveries “in the shadow of giants.”

Copper = Cu / Copper Equivalent = Cu Eq. All dollar figures in US dollars unless indicated otherwise. All Cu prices in US$/lb (converted from US$/metric tonne).

Copper is red hot, up 104% from COVID-19 lows in March 2020.

The most important source of primary copper is from a type of mineral deposit known as a porphyry, which provides ~60% of the world’s copper, a significant amount of its gold, and nearly all the world’s molybdenum. Porphyries are generally large, bulk tonnage deposits. They can be tens to hundreds of millions, or even billions, of metric tonnes (Mt) in size.

In looking at the latest U.S. Geological Survey data, global mined copper was down modestly in 2020 to 20.0 million Mt. Chile was, by far, the largest producer at 5.7 million Mt, equal to a whopping 28.5% of last year’s mined supply.

Cu is perhaps the only metal to benefit from all of the following: 1] giant new infrastructure programs; 2] wires/cables/motors/structures from new energy projects (with renewable energy 5–6x more Cu-intensive); 3] paradigm shift to electrified transportation (including massive buildout of Cu-intensive charging systems); 4] incremental power hookups for the “Internet of Things;” 5] Post COVID-19, new Cu uses in hospitals, schools, mass transit hubs, etc., due to its antimicrobial properties; 6] new and replacement electric grid and telecom infrastructure, including wireless towers and 5G wireless network base stations.

According to Bloomberg Intelligence, the average lead time from discovery to first production has increased by 40% from previous commodity cycles, to nearly 14 years. Consider this: Mined copper grades are falling, mines are getting deeper and haulage trips from mine to mill are getting longer. These factors, as well as higher labor, electricity and water/infrastructure costs, is fueling cost inflation.

Copper fundamentals have rarely been stronger

Longer lead times and copper prices below $3/lb resulted in a serious lack of exploration and development for most of the 2010s. Freeport-McMoRan Inc.’s (FCX:NYSE) CEO said recently that even if copper soared to $10/lb tomorrow, it would take seven or eight years to deliver new production.

In my opinion, all roads lead to higher prices. Some well-respected copper bulls including Robert Friedland and Gianni Kovacevic now believe that demand growth will be 4% or 5% in many of the next 30 years. Adjusted for inflation, 2011’s all-time nominal high would be ~$5.5/lb today.

The world’s #1 copper trader, Trafigura Beheer BV, expects the price to break through $4.54 this year, before entering a multiyear range of $5.44¬$6.80/lb Goldman Sachs raised its price deck to $5/lb next year and $6.80 by 2025. Does that level sound crazy? Although it’s 59% above the current price of $4.28, readers are reminded that today’s level is 104% above last year’s low of $2.10/lb.

This bullish narrative makes intuitive sense. On top of increased demand from population growth, urbanization, expanding middle classes, electric vehicles (EVs) and the production, storage and transport of renewable energy, there’s Africa. By 2075, the African continent is expected to host four of the 10 largest cities on the planet. The scale of infrastructure building needed there will be breathtaking.

Cu demand soaring: EVs, building/rebuilding electric grids + renewable energy

The world’s intensifying efforts to decarbonize/combat climate change is a very important tailwind for copper utilization. Each one degree Celsius of avoided global warming will require millions of Mt of copper/year to achieve and sustain. Major mining companies like BHP Billiton Ltd. (BHP:NYSE; BHPLF:OTCPK) and Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) are carefully studying the impacts of climate change on demand for their critical metals.

Kovacevic astutely points out that most of the last decade’s preliminary economic assessments (PEAs) and feasibility studies (PFS) were done at around $2.75 to $3.00/lb Cu. And, most of those projects have been stalled for years due to mediocre (or worse) economics.

After-tax internal rates of return (IRRs) of 12-15% for projects with multi-billion dollar capex budgets, with upfront capex significantly higher than after-tax net present value (NPV), are difficult to green light, especially in jurisdictions outside of Canada, the U.S., Chile, Peru and Australia. Note: Some of the largest existing and future copper mines are in Indonesia, Russia, the Democratic Republic of Congo, Zambia, Pakistan, Mongolia, China and Panama.

Kovacevic adds that today’s open-pit mined copper grades of 0.45¬0.65% are being replaced by ~0.3% Cu Eq. grades on a meaningful portion of future production. Assuming $3/lb Cu, that’s $19.84/Mt of ore. Sub-$20/Mt does not make the grade for the next generation of bulk tonnage mines, with tens of billions of dollars in upfront capex ahead of them.

Experts and analysts calling for US$6/lb-plus copper in coming years

Incentive prices to warrant developing higher-risk, lower-grade operations that take years longer to develop will have to be well above $3/lb Increasingly, pundits and analysts are saying $5/lb might be needed. At 0.4% Cu Eq. and $5 Cu, a deposit would host ore with a gross in-situ value of $44.10/Mt. Five dollars per pound is only 17% above today’s price.

Most of the challenges of bringing on new copper supply are being felt globally. In western Canada, one can avoid ultra-high altitudes and have far less worries over water—but some mines there are already operating at less than 0.3% Cu Eq., leaving little room for error.

Juniors with properties in world-class jurisdictions are very well placed to benefit from a rising copper price. All else equal, for a resource of 500 million Mt, each additional 0.10% of Cu Eq. grade equates to an incremental $4.4 billion in un-discounted life of mine revenue! That’s why Chile’s 0.4-0.6% Cu Eq. porphyries can be so much more valuable than western Canada’s 0.3% mines.

Newly listed Pampa Metals Corp. (PM:CSE; PMMCF:OTCQB) controls a 100% interest in eight exciting exploration projects along proven mineral belts in northern Chile, one of the world’s top mining jurisdictions. The total portfolio of 59,000 hectares is prospective for copper and gold, but management’s primary focus is on maiden discoveries on copper-heavy porphyries.

The properties were secured by other companies over the past 10 years, and represent the best of dozens of opportunities reviewed across South America. These targets are located along proven, prolific mineral belts. Importantly, none sit at ultra-high elevations. Each is less than 3,000 meters above sea level and are fairly near the coast.

Pampa farms out two gold-copper projects to focus on copper-heavy targets

Pampa farmed out two of its eight prospects to Austral Gold Ltd. (AGD:ASX), which has an option to earn up to an 80% joint-venture (JV) interest in both the Cerro Blanco and Morros Blancos projects. To earn an initial 60% JV interest, Austral must invest a total of $3 million ($3M) in exploration over up to two years and return for cancellation ~3M Pampa Metals shares (taking Austral’s subsidiary, Revelo Resources, ownership in Pampa down to 12.8%).

Austral can increase to 65% by producing a preliminary economic assessment (PEA) on either or both projects. Finally, Austral can climb to an 80% JV interest by delivering a bankable feasibility study (BFS) on either project.

It’s impossible to overstate the difference in market sentiment between $2.5–$3.0/lb and $4.0–$4.5/lb Cu. Just imagine the excitement if/when the price surpasses $5 bucks.

Julian Bavin, CEO of Pampa Metals, commented: “The Company is advancing rapidly with its exploration program, with two, Arrieros and Redondo-Veronica (R-V), substantially advanced. We’re especially pleased with results at R-V, where significant geological outcrop gives us a good idea of targets to be followed up on. Arrieros, largely devoid of geological outcrop, requires completion of geophysical surveying. We’re planning an initial drill program on R-V to start in May and will continue exploring other projects in Pampa’s portfolio.”

R-V is ~40 kilometers north-northeast of the massive La Escondida–Zaldivar copper mining district, home of the world’s largest porphyry copper operation. Historic work at R-V includes geological mapping and geochemical sampling.

Five separate zones of hydrothermal alteration characteristic of porphyry copper deposits have been identified and mapped on R-V, all of which, subject to geophysical results, are likely to provide valid drill targets.

All areas of interest are large (2–4 square kilometers), with three having been subject to 1 or 2 historic drill holes (of unknown origin and drill results). One priority area has had no evidence of drilling. A fifth area has seen significant historical drilling and has evidence of copper oxides.

Conclusion

Pampa Metals’ world-class portfolio in northern Chile, combined with a highly experienced management team, a healthy cash balance of CA$4M (no debt), means that the company is well placed to deliver on key objectives in a rising copper price environment. With an enterprise value (market cap + debt – cash) of just CA$18M, Pampa offers a compelling risk/reward proposition.

The Arrieros project is covered by 14,000 hectares of exploration and exploitation concessions in an ~18-kilometer-long by 8-kilometer-wide, contiguous, north-south block. It’s centered 40 kilometers south of the Chuquicamata mine in the Antofagasta region of northern Chile.

The Arrieros property is 25 kilometers south of Calama, an important mining center with a population of 166,000. The town serves exploration/development projects and operating mines for companies including Codelco, Antofagasta Plc (ANTO:LSE), BHP, Freeport McMoRan and KGHM Polish Copper Ltd. (KGHPF:OTCPK).

Northern Chile hosts one of the highest concentrations of mid-tier and major Cu and gold producers in the world. In addition to the above five companies: Vale S.A. (VALE:NYSE), Rio Tinto, Anglo American Plc (AAUK:NASDAQ), Teck Resources Ltd. (TCK:TSX; TCK:NYSE), SQM (SQM:NYSE), Newmont Corp. (NEM:NYSE), Barrick Gold Corp. (ABX:TSX; GOLD:NYSE), Newcrest Mining Ltd. (NCM:ASX), Glencore International Plc (GLEN:LSE), Kinross Gold Corp. (K:TSX; KGC:NYSE), Yamana Gold Inc. (YRI:TSX; AUY:NYSE; YAU:LSE), Sumitomo Corp. (8053:TKY; SSUMF:OTCPK) and FMG have interests in the greater region of northern Chile. Pampa’s management team believes that a meaningful discovery would attract significant attention.

This is one of the strongest management teams I’ve come across for a company this size. CEO Julian Bavin, M.Sc., has 38 years’ experience as a geo and senior exec. He’s a former exploration director at Rio Tinto, and currently lives in Chile. Non-executive chairman Adrian Manger, CPA, has 30 years’ experience, including 20 at BHP. He was involved at a senior level in the $1 billion Spence mine development in northern Chile. He has an extensive background in equity/bank financing.

Director Yannis Tsitos, M.Sc., has a 30-year career as physicist, geophysicist, explorer, deal-maker and business development manager at BHP (19 years). He’s an expert in project evaluation and risk management, and is president of Goldsource Mines Inc. (GXS:TSX.V). Director Timothy Beale, M.Sc., has 35 years’ under his belt as a geo. He has strong experience in mineral exploration, and has worked with BP Minerals, RTZ, Rio Tinto, Hochschild Mining Plc (HOC:LSE) and Anglo American. He’s lived and worked for more than 20 years in Chile, Argentina and Peru.

In the end, a strong management team can only take a company so far, it requires strong prospects as well. Pampa Metals has great properties, two of which have been farmed out. The company is cashed up to conduct a lot of exploration on multiple properties, while its strategic partner Austral invests in two projects to earn 60% JV interests.

Pampa is in the right place at the right time with the right commodity. Relatively few, if any, copper juniors have as large a property portfolio in northern Chile. Fewer still control 100% of their prospects, although early-stage properties that get drilled this year and next already enjoy a substantial headstart on greenfield projects.

Flying under the radar, Pampa remains unknown to investors, and has an enterprise value of CA$18M, with CA$4M in cash. Drilling by both the company and Austral in coming months offers considerable discovery potential on multiple properties. Any discoveries could lead to satellite deposits for one of the many large mines/development projects in the area.

Peter Epstein is the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University’s Stern School of Business.

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At the time this article was posted, Pampa Metals is an advertiser on [ER] and Peter Epstein owned shares in the Company.

Readers understand and agree that they must conduct their own due diligence above and beyond reading this article. While the author believes he’s diligent in screening out companies that, for any reasons whatsoever, are unattractive investment opportunities, he cannot guarantee that his efforts will (or have been) successful. [ER] is not responsible for any perceived, or actual, errors including, but not limited to, commentary, opinions, views, assumptions, reported facts and financial calculations, or for the completeness of this article or future content. [ER] is not expected or required to subsequently follow or cover events and news, or write about any particular company or topic. [ER] is not an expert in any company, industry sector or investment topic.

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