In October 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.
So in November I made small cap silver stock Aftermath Silver my stock pick of the month and recent developments with the company force me to make it my top stock for December too.
There are times when you get a chance to get in something big at the start if you pay attention to where the big money goes.
The other week company announced that it was closing a major private placement financing worth $3.3 million dollars, of which $2.98 was done by mining legend Eric Sprott. The shares were purchased at 20 cents Canadian and come with warrants to buy more at 25 cents.
With this purchase Sprott now is a major insider in the company owning 19.51% of outstanding shares.
Eric Sprott is on the Forbes billionaire list and is famous for having founded the Sprott Inc. Toronto based asset management company, since which he has retired from serving as Chairman of.
This news though should get even more eyes on the stock as a lot of people follow Sprott’s moves in the mining world and often buy what he buys. A few years ago I bought shares of Wallbridge Mining for under 10 cents. Sprott bought big positions and today the stock is over 60 cents. The company has demonstrated very impressive drill results and is another reason people think Sprott has a “Midas touch.”
Aftermath Silver trades on the US OTC as FLMZF and in Canada as AAG.
I first mentioned the stock in my private trading group in June. But a flow of events happening with it that suggest to me that it is poised to run into the end of the year and beyond.
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 simply broke away from it last month. While gold and silver are still off of their highs Aftermath Silver made a new high last week.
Here is an interview with the company’s CEO.
Aftermath Silver started this year out as a ground floor company whose stock had a market cap of around $5 million USD.
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 in October the company announced the completion of a major transaction.
It closed the purchase of rights to explore and mine the Cachinal-Silver-Gold Project located in Chile. The recent full funding also gives it the money to begin exploration drilling of this property next year.
The company also closed 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 corporate transactions, chart situation, and last month’s news of the Eric Sprott position is why I am NOW making it my stock pick of the month for December.
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 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.
