This is a fascinating moment in the markets, because we have seen a pullback in many popular trends in the market that has caused a pause in many stocks and exchange traded funds. This is creating an entry point for the stocks in position now to benefit on the trends that will enfold and is also causing an opportunity in stocks that people have been completely asleep on.
One stock that has yet to be noticed by stock traders and I think is about to in a big way is that of Pacific Ridge Exploration Ltd. (OTCMKTS: PEXZF). It trades on the US OTC with the symbol PEXZF, with its main listing on the Canadian stock exchange as PEX.
The company owns copper and gold mining exploration properties in Canada. Few things have gone up as much as copper have as you can see from this chart.
Most commodities pulled back in March and copper did too. However, major copper stocks, such as Rio Tino mining, which I own a position in, are just barely off of their 52-week highs. Copper just can’t be stopped as its price has been rising ahead of the economic expansion to come. The global economy shutdown last year in the spring and now is only starting to come back online week by week. Copper is needed in just about everything you can think of and the Biden infrastructure plans only will make copper demand grow. It’s also a key element for the production of electronics, electronic vehicles, and the batteries that fuel them.
Pacific Ridge Exploration Ltd. (OTCMKTS: PEXZF) is focused on copper and gold. Gold, though, is why people have not yet piled into the stock. Gold soared last year from April through August, but entered a pullback/consolidation phase that lasted so long that most traders simply lost interest in gold and mining stocks. But now gold made a double price bottom in March and looks like it is ready to clear resistance at $1750 to begin a new rally.
Look for gold to start to rally big once it closes above $1750.
When gold turns up interest will return to gold mining and exploration stocks and you can expect them to go up together as a sector, but the stocks that tend to go up the most when a sector rallies are those that barely drop at all when the sector pulls back. Such stocks often go up ahead of their sector too. Pacific Ridge Exploration (TSXV: PEX), barely dropped at all during this recent pullback in gold and other commodities in March, because it is a new stock that not a lot of people know about yet. That means opportunity. Check out the chart.
PEX is trading in a range with solid support at 10 cents and resistance at 13 1/2 cents.
The stock has tremendous upside potential, because it is trading as a value stock with a market cap of less than $3.6 million USD. Most pure gold exploration stocks trade with market caps around $25 million in metals bull markets. Recently, Kingfisher Metals Corp (TSXV: KFR), another company focused on copper-gold projects in B.C., just went public and now trades with a market cap around $33 million USD.
Yep, that makes for an incredible opportunity right here and it’s only happening because the consolidation in gold went on for so long that so many took their eyes off the sector and the recent pullback overall in commodities in March.
Pacific Ridge’s flagship project is the advanced-stage Kliyul copper-gold project, located in the Quesnel Trough, approximately 50 km southeast of Centerra Gold’s Kemess project. The company is planning to launch a drill program on this property this summer and has just completed a $1.1 million private placement financing, so it that is has all the money needed to do it. You can see the complete NI 43-101 Technical Report for this propertyhere. The Kliyul copper-gold project is in a similar geological environment as GT Gold’s Saddle North deposit. GT Gold is being acquired by Newmont for over $311 million $USD.
What exploration companies do is buy the rights to mine a property and then explore them to prove up a deposit in order to increase the value of the property. They can then move into production or sell it at a high value or partner with a larger company to mine it. On the map above you can various mines and other exploration properties in the area. Pacific Ridge Exploration also owns an interest in Redton.
Redton adjoins Serengeti Resources Inc.’s Kwanika project – the Central Zone deposit at Kwanika hosts a Measured and Indicated Resource of 223.6 million tonnes grading 0.27% copper, 0.25 g/t gold and 0.87 g/t silver containing 1.32 billion pounds of Cu, 1.83 million ounces of Au and 6.27 million ounces of Ag (Serengeti news release, March 3, 2019) – and is road accessible.
Redton is located in a highly mineralized belt that has gotten attention thanks to Serengeti’s acquisition of Sun Metals Corp for the creation of the new combination company Northwest Copper.
Pacific Ridge also owns interests in five additional properties in the Yukon, but its primary focus for 2021 is on the Kliyul copper-gold project and Redton. One of its Yukon property partners is due by year end to help finance its exploration next year.
With the company fully funded to execute in 2021 it hired a new CEO on January 4, 2021 to take charge of its operations in Blaine Monaghan,who “has worked with a number of companies that were subject to M&A, including True Gold Mining Inc. (acquired by Endeavour Mining Corp.), Canplats Resources Corp. (acquired by Goldcorp Inc.), Western Prospector Group Ltd. (acquired by a subsidiary of China Nuclear National Corp.), Nu Energy Uranium Corp. (acquired by Mega Uranium) and Wheaton River Minerals Ltd. (which merged with Goldcorp in 2005).”
“This is an important step forward for Pacific Ridge”, stated Dr. Gerry Carlson, Executive Chairman of Pacific Ridge. “Blaine’s appointment significantly strengthens and diversifies our existing management team. He has a track record of creating shareholder value and a broad range of experience in management, corporate finance and investor relations. When you couple Blaine’s capital markets’ expertise with management’s technical expertise, I believe that Pacific Ridge is positioned for success.”
“My goal is to create one of British Columbia’s leading copper-gold exploration companies,” said Blaine Monaghan, President and CEO of Pacific Ridge. “I look forward to working with Gerry and Danette Schwab, Pacific Ridge’s VP Exploration, as we advance the Kliyul copper-gold project, our flagship project, and acquire additional copper-gold projects to achieve that goal.”
So we got a stock that is truly a value play with a market cap 1/5 what would make it fully valued in a company ready to take advantage of the copper trend, which is obvious to everyone, and a gold trend that few are paying attention to anymore, but I believe more soon will be. Put it all together and it’s my top stock pick of the month. Go PEX! Go PEXZF!
-Mike Swanson
Disclosure: Mike Swanson owns shares of Rio Tino and Pacific Ridge Exploration. Because Pacific Ridge Exploration is a small cap stock with a market cap of less than $100 million he has put himself in a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post (04/04/2021). Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Sonoro Gold Corp. This third party paid Timingwallstreet Inc., $16,000 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for 30-days from the date of this post (4/04/2021). This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.
