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I have a confession to make. You see, I like silver stocks, but they are very rarely cheap enough for me. Specifically, there’s a stock that I’ve been watching for several months that is super interesting but is not yet (and may never be) a screaming buy. The reason being that I like very cheap stocks whose charts look like they’ve been left for dead, and the market cap is dangerously low relative to the assets.
However, I just came across a clever way to indirectly play one of these silver target companies at an entry price that will knock you out of your chair.
To encounter Northern Lights Resources (NLR.C)a company with a small market capitalization with two very interesting projects in the United States for the exploration of gold and silver.
The first project is the 100% owned Secret Pass in Arizona. It is 15 km north of the historic Oatman Gold Mining District which produced 2 million ounces of gold between 1892 and 1940 at an average gold grade of >15 g/t. Pleasant!
Drilling in 2021 confirmed gold in their licenses as shown below:
The second project is Medicine Springs, and here’s my “in” for playing a money company that’s too forward-looking to ignore. Medicine Springs is located in Nevada and has the potential to hold a replacement carbonate deposit, which is geo-speak for juicy and big.
Reyna Silver, their JV partner, can earn up to 80% equity in the Medicine Springs project by spending a minimum of US$2.4 million plus other commitments plus a cash payment of US$1 million in Northern Lights no later than December 31, 2023.
The 2022 exploration program at Medicine Springs will include a 5,000 to 7,000 meter drill program. Reyna Silver, if you don’t know, is a little junior silver out of MAG Silver, a 2b juggernaut producer.
Here’s what they have to say about this silver project:
“What we see at Medicine Springs includes 10 of the 13 key features we expect to see at the very top of a large CRD system…and we see them before we drill our first hole!“, said Dr. Peter Megaw, chief exploration adviser to Reyna Silver – who happens to be the director of exploration at MAG.
See the video below:
OK, so now let’s do some math.
Reyna Silver may own up to 80% of this project, which they seem super excited about (I should know, I spoke to them personally) is sitting at a market cap of 38 million. Yes, they have other licenses and projects, but this seems to be their baby, and they are pouring money into this deal right now.
Northern Lights, which owns 20% of the project, sits at a ludicrous market cap of just 700k. Yes, you read that right, less than 1m CAD.
Now, nothing is guaranteed in the world of mining and there have been relentless sell-offs in stocks this year, but it’s a risk/reward I would take all day.
Drilling is ongoing and I am watching this VERY closely. It is very likely that by the time you read this I will be starting a post. Crossed fingers!
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