I am a big believer in investing in gold and silver, but there is more to the metals world than them. In fact we have been seeing commodity prices continue to rise this year and the price of copper has been on a tear now for a year and half. This new copper exploration stock is in perfect position to benefit from this overall trend and has a great chart pattern right now for an entry point. This is a stock that I expect to do very well in the coming months and for the rest of the year.
The shares are that of Red Metal Resources, which trades as RMESF on the US OTC and as RMES on the Canadian Stock Exchange. It is a new issue, that has only been trading since early December. That makes a great opportunity to get into something new, while it still isn’t widely known yet by the general public. The company has a market cap of around $10.50 million USD. Most exploration stocks like it get to markets caps of around $25 million USD during bull runs.
It has been trading in a very nice definable trading range with clear levels of support and resistance. The clear support level enables one to define their risk on an entry point, while the fact that it has two obvious resistance levels, not far from its price, gives it good upside potential once they are broken. As you can see from this chart, the first such resistance point is at 20 cents and the second one is at 24 cents.
The stock is cheap and looks ready to go, but understand that copper is key. I believe inflation is going to stay strong for the next few years, which means higher copper prices, but many also think that the EV trend provides its own bullish headwind for the needed metal. According to BlackRock’s global head of thematic and sector-based investing Evy Hambro, “We’ve got decades worth of high rates of investment into infrastructure as the world seeks to decarbonize. That’s a widely held consensual view. What we’re likely to see is strong demand that will keep prices at very very good levels for the producers for many years into the future, and that could be decades.”
What Red Metal Resources has is a start up portfolio of copper/gold properties in Chile with plans to boost their value through drill exploration and to even engage in future acquisitions. Chile is famous for world-class, low-grade, high-tonnage deposits and possesses massive potential in undeveloped mid-sized, high-grade, copper-gold deposits. Chile has consistently been ranked as one of the most politically stable countries in which to invest, contains excellent infrastructure and possesses a mining-educated workforce.
The company’s projects are located in the prolific Candelaria iron oxide copper-gold (IOCG) belt of Chile’s coastal Cordillera, host to the world class Candelaria and Mantoverde Mines. The coastal Cordillera is a world class, low elevation district in Chile where projects are close to major mining distribution hubs, infrastructure and experienced mining personnel. The jurisdiction is historically under explored due to focus on the monster porphyry deposit potential in the Andes and due to a complicated land tenure system that hinders consolidation of ground.
It’s flagship property is the Farellon property, consisting of eight, wholly owned, mining concessions totaling 1,234 hectares in the Carrizal Alto mining district located approximately 75 kilometres northwest of the city of Vallenar, 150 kilometres south of Copiapo and 20 kilometres west of the Pan American Highway. The property is easily accessible year round by dirt roads that crisscross the property and is located close to power, water and a major urban centre, Copiapo, with a readily available mining workforce.
This is a photo of a drill in operation at the property.
In January the company announced its first drill program in a press release, stating that “the drill program will consist of up to six holes targeting down dip extents of known mineralization to approximately 175 metres vertical depth. The mineralized zone is estimated to have a depth of approximately 500 metres based on historic mine records from the Carrizal Alto mine located three kilometres along strike on the same structure hosting the Farellon vein. A further four holes will target the same structure along strike where surface sampling in 2012 confirmed mineralized vein for a further three kilometres with assays of up to 5.78% Cu with 0.17% Co and 4.37% Cu with 0.06% Co.”
Caitlin Jeffs, CEO and President of Red Metal Resources, commented, “2022 is going to be an exciting year to be a copper explorer and we are looking forward to expanding on our known zones, and also drill testing new targets with fantastic potential.”
Drill programs like this typically bring positive news flow to a stock, but this is the company’s first press release of the year. More things will happen. I see this stock as a chance to really get in early on the ground floor of something as it has only been trading for two months.
Disclosure: Mike Swanson owns shares of Red Metal Resources. Because Red Metal Resources 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 (02/01/2021). 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 Red Metal Resources. This third party paid Timingwallstreet Inc., $14,500 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for 30-days. 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.