Copper Co. Has Upcoming Drill Program and Growth Potential

Source: Michael Ballanger 07/23/2024

Michael Ballanger of GGM Advisory Inc. shares his thoughts on the current state of the market, as well as one copper exploration company he has his eye on.

The USD index futures are higher by 0.14% with the metals complex mixed as gold (+0.54%) is up, but silver (-0.33%), copper (-1.01%), as well as oil (-0.59%), are all lower. Stock index futures are slightly lower across the board after yesterday’s strong rebound.

Although the S&P reclaimed the 20-dma, the Invesco QQQ ETF (QQQ:NASDAQ) did not. The DJIA remains well above the 20-dma. Bitcoin is down 1.89% and is flashing a “risk-off” sentiment warning, albeit small.

Vortex Metals

Yesterday, I had a superb ZOOM call with Vortex Metals Inc.’s (VMSSF:OTCMKTS; VMS:TSX; DM8:FSE) Chairman Michael Williams (also Chairman of Aftermath Silver Ltd.) and CEO Vikas Ranjan. I must confess that having first met Vikas a few months ago, I am increasingly impressed with his stewardship of this little exploration junior.

We went over the budget for 2024, which included the upcoming drill program at Illapel in Chile. To get a really decent “look” at the Illapel geology and evaluate the current drill targets, project manager (and ex-BHP country manager) John Larson believes that a 10-hole program is required.

There are two copper and one gold targets identified as a portion of the Phase 1 program, but at US$300-350/meter, drilling costs will allow for only five of the ten proposed (and required) holes. The company raised CA$1.7 million (net CA$1.5m after fees) back in May and then proceeded to get their receivables in line, which left enough to drill half of the holes needed to complete Phase 1. (That is a direct consequence of the challenging funding environment for the junior explorers.)

Nevertheless, the Illapel targets are adjacent to and on strike to the RIO-27 mine, a 6.2m/t copper-gold porphyry carrying average Cu-equivalent grades exceeding 1.5% and according to Larson, have an above-average probability of encountering economic-grade Cu mineralization.

Having been an investor in a number of Michael Williams deals over the past 15 years, I have noted that he is generally able to deliver acceptable returns in most market environments, but those returns are accentuated when he has a hot commodity market as a tailwind or when he gets drill results that are positive.

In the former, silver was just starting to take off from the 2019 bear market lows when Aftermath was introduced to subscribers in the CA$0.15 range. It topped in 2021 at CA$1.70 before succumbing to the peak in silver. In the latter case (drill results), Underworld Resources made a gold discovery in Canada’s Yukon Territories in 2008 and became a junior gold market leader in both volume and performance before Williams sold the company for US$139 million to Kinross Gold. It was a wonderful pass for many shareholders (including me).

I see the Vortex opportunity unfolding similarly to the Underworld case example, so with drilling scheduled to commence in about three weeks, I am excited about the prospects. The potential at Illapel is to grow to a mid-tier copper deposit, unlike RIO-27, which values VMS in the US$350 million range (assuming 100% interest). I should add that the two projects in Oaxaca, Mexico (Zaachila and Riqueza Marina) are both highly prospective volcanogenic massive sulfide (or “VMS”) targets that I studied intensively a few years ago with the late David Jones, one of the world’s foremost authorities on the geology surrounding collapsed calderas (volcano craters).

The only reason that management pivoted to Illapel from Oaxaca was the shift in politics in Mexico a few years back that has stalled the permitting process. However, Vikas informed me that negotiations are progressing well with communities representing one of the projects. The one that I particularly like is Riqueza Marina.

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Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Vortex Metals Inc. and Aftermath Silver
2. Michael Ballanger: I, or members of my immediate household or family, own securities of: Vortex Metals Inc. I determined which companies would be included in this article based on my research and understanding of the sector.
3. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
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Michael Ballanger Disclosures

This letter makes no guarantee or warranty on the accuracy or completeness of the data provided. Nothing contained herein is intended or shall be deemed to be investment advice, implied or otherwise. This letter represents my views and replicates trades that I am making but nothing more than that. Always consult your registered advisor to assist you with your investments. I accept no liability for any loss arising from the use of the data contained on this letter. Options and junior mining stocks contain a high level of risk that may result in the loss of part or all invested capital and therefore are suitable for experienced and professional investors and traders only. One should be familiar with the risks involved in junior mining and options trading and we recommend consulting a financial adviser if you feel you do not understand the risks involved.

( Companies Mentioned: VMSSF:OTCMKTS;VMS:TSX;DM8:FSE, )