RCKS Talk

Friday, February 16, 2018 Derek Macpherson

2018 Outlook: Discovery, Batteries and Zinc


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With 2018 just underway, we have reviewed the data and identified three themes and related companies that we believe investors should pay close attention to this year. In the precious metals space, we believe discovery and other value creating catalysts are likely to drive investor returns versus metal price appreciation. We believe battery metals are going to continue to be strong, with both cobalt and lithium companies likely to have good years. Finally, zinc continues to be our favourite base metal; however, fundamentals appear to be improving for copper. For more details see the summary below, our video summary and our detailed report




Discovery, markets crave it – investors benefit from it.
Our focus remains the junior exploration space and while we are still in the early stages of a precious metals bull run, we are remaining focused on companies which, in our view, have significant discovery potential. Some of our favourite names include: Novo Resources (TSXV:NVO), Marlin Gold Mining (TSXV:MLN), Sailfish Royalty (TSXV:FISH), Red Pine Exploration (TSXV:RPX), Urban Barry Camp – Metanor Resources Inc. (TSXV:MTO) and Aurania Resources Ltd. (TSXV:ARU).

Energy Metals – Ongoing Battery Revolution plus Uranium? We continue to believe that forecasts for increased Li-ion battery production will drive demand for key components. In particular, we expect it to benefit cobalt and lithium focused companies. Plus we believe the uranium market may have reached a tipping point, suggesting it may be time to take a look at this space again. Some of our u names include: First Cobalt (TSXV:FCC), Brixton Metals (TSXV:BBB) and Standard Lithium (TSXV:SLL).

Base Metals – Zinc still has strong fundamentals, Copper poised for a comeback. Last year, zinc has seen significant price momentum ending the year at $1.50/lb Zn as zinc inventories continue to decline. With a continuation of the current trend, we favour pure-play near-term producers and explorers such as Bunker Hill Mining Corp. (CSE:BNKR) and Tinka Resources Ltd. (TSXV:TK). While the copper market was balanced in 2017, inventories remain low with a lack of significant production entering the global pipeline in the near-term. Our favourite copper explorer is Solgold Plc (TSX:SOLG).

For more detailed information on our outlook and the names we like please download the full report here.

Derek Macpherson | VP Mining Analysis
Victoria Ellis Hayes | Associate
Alex Pitcher | Associate
 
Red Cloud Klondike Strike Inc.
105 King Street East, 2nd Floor
Toronto ON, M5C 1G6

Priced as of prior trading day's market close, EST (unless otherwise noted).
All values in USD unless otherwise noted.

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Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, and the Yukon. Part of Red Cloud Klondike Strike Inc.'s business is to connect mining companies with suitable investors that qualify under available regulatory exemptions (the "Red Cloud KS Business"). Red Cloud Klondike Strike Inc., its affiliates and associates, and their respective officers, directors, representatives, researchers and members of their families (collectively, "Red Cloud KS") may hold positions in the companies mentioned in this publication and may buy or sell, or buy and sell their securities or securities of the same class on the market or otherwise. Additionally, Red Cloud KS may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
Red Cloud KS has prepared this publication for general information purposes only, NOT as part of the Red Cloud KS Business. This publication should not be considered a solicitation to purchase or sell securities or a recommendation to buy or sell securities. The information provided by Red Cloud KS for the purposes of this publication has been derived from sources believed to be accurate, but cannot be guaranteed. Opinions or analysis contained in this publication may be subject to change and Red Cloud KS does not undertake to advise the reader of such changes. This publication does NOT take into account the particular investment objectives, financial situations, or needs of individual recipients and other issues (e.g. prohibitions to investments due to law, jurisdiction issues, etc.) which may exist for certain persons. Recipients should rely on their own investigations and take their own professional advice before investment. Red Cloud KS will not treat recipients of this publication as customers or clients by virtue of having viewed this report.

Company Specific Disclosure Details
AbraPlata Resource Corp - TSXV:ABRA - 2,3,4
Adventus Zinc Corp - TSXV:ADZN - 3,4
Austral Gold Ltd - TSXV:AGLD - 1,2
Anaconda Mining Inc - TSX:ANX - 1,3,4
Aquila Resources Inc - TSX:AQA - 2
Aurania Resources Ltd - TSXV:ARU - 2,3,4
Aston Bay Holdings Ltd - TSXV:BAY - 2,3,4,6,7
Brixton Metals Corp - TSXV:BBB - 2,3,4
Bunker Hill Mining Corp - CSE:BNKR - 1,2,3
Bonterra Resources Inc - TSXV:BTR - 1,2
Ecobalt Solutions Inc - TSX:ECS - 1,2,3,4
First Cobalt Corp - TSXV:FCC - 1,2,3
Sailfish Royalty Corp - TSXV:FISH - 2,4
Goldquest Mining Corp - TSXV:GQC - 1,2,4
GT Gold Corp - TSXV:GTT - 2
Mawson Resources Ltd - TSX:MAW - 2,3
Marlin Gold Mining Ltd - TSXV:MLN - 1,2,3,4
Maverix Metals Inc - TSXV:MMX - 2,4
Monarques Gold Corp - TSXV:MQR - 1,2,3,4
Metalla Royalty and Streaming Ltd - CSE:MTA - 2,4
Metanor Resources Inc - TSXV:MTO - 1,2,3,4
Northern Vertex Mining Corp - TSXV:NEE - 1,2,3,4
Novo Resources Corp - TSXV:NVO - 1,2,3,4
Otis Gold Corp - TSXV:OOO - None
Orford Mining Corp - TSXV:ORM - 1,2,3,4
Pure Energy Minerals Ltd - TSXV:PE - 3,4
Red Pine Exploration Inc - TSXV:RPX - 1,2,3,4
Standard Lithium Ltd - TSXV:SLL - None
Sierra Metals Inc - TSX:SMT - 2
Solgold Plc - TSX:SOLG - 1,3,4
Toachi Mining Inc - TSXV:TIM -1
Tinka Resources Ltd - TSXV:TK - 1,4
Lupaka Gold Corp - TSXV:LPK - 3,4
Northern Empire Resources Corp - TSXV:NM - 1

1) A member of Red Cloud KS team has visited/viewed material operations of the issuer.
2) In the last 12 months, Red Cloud KS has been retained under a service or advisory agreement by the subject issuer.
3) In the last 12 months, Red Cloud KS has received compensation for investment banking services.
4)  Red Cloud KS or a member of the Red Cloud KS team or household, has a long position in the shares and/or the options of the subject issuer.
5) Red Cloud KS or a member of the Red Cloud KS team or household, has a short position in the shares and/or the options of the subject issuer.
6) Red Cloud KS or a member of the Red Cloud KS team own more than 1% of any class of common equity of the subject issuer.
7) A member of Red Cloud KS team or a member’s household serves as a Director or Officer or Advisory Board Member of the subject issuer.

 

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Red Cloud Klondike Strike Inc. is registered as an Exempt Market Dealer (EMD) in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Quebec, New Brunswick, Nova Scotia, Prince Edward Island, Newfoundland & Labrador, and Yukon.

 

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