Last month I didn’t release a stock pick of the month, because I didn’t see anything lined up the way I like. I am not one who just puts out stock picks for the sake of putting out stock picks. Sometimes I don’t see anything worth people buying, but when something really lines up it is time.
Now is the time.
My stock pick for November is small cap silver exploration stock Aftermath Silver, which trades on the US OTC as FLMZF and in Canada as AAG.
I first mentioned the stock in my private trading group in June and then made it my stock pick of the month for August. Now things are happening with it that suggest to me that it is poised to run into the end of the year.
News came out on the stock that is not priced in yet in my view.
First here is the chart.
The stock had a tremendous run in August, but then peaked out around Labor Day to pull back along with the price of gold and silver. Aftermath Silver dipped along with the sector, but now that gold is back above $1500 and silver is above $17.50 it appears that this correction in the metals market is now over.
The price low Aftermath Silver stock made in October should now be solid support for the stock, which means that there is little downside risk in the stock now to set shareholders up for a fun November.
Aftermath Silver is a ground floor company whose stock has a market cap of around $5 million USD. That’s why the stock is so cheap. And the biggest gains in the mining world come from stocks that start from a low price and then go up.
In fact the company’s stock was considered to be akin to a shell company by the exchange at the beginning of the year. That’s why it did very little volume in the first few months of 2019. But now this is changing as the company announced the completion of a major transaction last week.
The company announced that it raised over $2.5 million in a private placement during the months of June to July that closed last week. It is using this money to close the purchase of rights to explore and mine the Cachinal-Silver-Gold Project located in Chile. The placement funding also gives it the money to begin exploration drilling of this property next year.
The announcement also represents a milestone in the company as it means that it is no longer a blank check shell company. The stock is now going to be able to graduate to the TSX Venture Exchange as a Tier 2 category issuer.
That should happen soon.
The company also is in the process of finalizing another private placement raise at 20 cents CAD to close another property transaction – the Challacollo property, which has even more indicated resources than the Cachinal project. Together the two properties have indicated over 47 Moz of silver on them. The company’ goal is to define over 100 Moz through more drilling and exploration. If it is successful in that the potential for shareholders getting in at this current level should be tremendous.
That’s why I invested in the stock and still own it. But the chart situation and last week’s news is why I am NOW making it my stock pick of the month.
For more details on the company check out its corporate presentation by clicking here.
-Mike
Disclosure: Mike Swanson owns a position in Aftermath Silver. Because it is a small cap stock with less than $100 million in market cap he is placing himself on a voluntary 30-day trading restriction period from the date of this post in which he will not buy or sell shares of it.
