One of the small cap junior exploration stocks I own is Vendetta Mining, which trades on the TSXV as VTT and on the US OTC as VDTAF. I also had it as my top stock pick of the month back in July of 2020. Vendetta is a commodity stock as it is developing the Pegmont lead-zinc resource, which is strategically located in the heart of the world’s most important lead-zinc belt in Queensland Australia. Pegmont is a high-grade, largely open pit, resource with excellent infrastructure. The company recently completed an updated resource estimate indicating close to 10 million tonnes of open pit resource with additional near surface underground zones and it owns 100% of it.
Right now I personally own more shares of this mining stock than any other, but my position is dwarfed by that of a strategic institutional investor that has just bought up 19.89% of all of the outstanding shares in two tranches in a private placement financing it did with the company for over $4.7 million. This institutional investor is Singapore J&Y Investment PTE. Ltd. (“J&Y”), a Singapore based private investment firm operating in the mining and financial sectors, partnering with companies to build strong, successful, innovative
and sustainable businesses that strive to produce superior returns to all stakeholders. In the mining sector, J&Y pays attention to non-ferrous metal mining projects at various stages, and particularly in the upgrading and development of mining projects on important metallogenic belts in Oceania, North America, South America. In the financial sector, J&Y focuses on the investment of high-quality assets in the fields of ecological protection and sustainability. Vendetta is in its wheelhouse.
Here is the thing, J&Y recently bought the bulk of its shares in the second tranche of the private placement at $0.0825 a share. That’s higher than its current trading price, so anyone who buys in right now can get in at or below the price they paid! They were willing to pay up in order to be a able to get such a giant position in the stock is my guess as to why they did it. I’m sure they think it will go higher than that anyway.
Check out the chart.
VTT has done well this year while the Nasdaq and most stocks have fallen. That’s the story with most commodity stocks, but VTT also has a nice entry point here with the shares trading in a short-term range with six cents as support and last week high being 7 cents. The range is below the price J&Y paid so it makes me think that this stock is a STRONG BUY HERE.
In 2019 the company did an independent PEA way below the current metals prices which demonstrated that the Pedgmont property can be mined profitably:
Project Economic Highlights:
- Mine Life 10 years at 3,000 tonne per day open pit followed by underground
- Long Term Consensus Metal Prices: $0.94 /lb Lead, $1.09 /lb Zinc and $16.50 /oz Silver
- US Dollar to Australian Dollar exchange rate of 0.75
- Preproduction Capital of $170M and Life of Mine Sustaining Capital of $59M
- Pre-Tax NPV (8%) $201M and IRR 32%
- After Tax NPV (8%) $124 M and IRR 24%
- After tax payback period 3.5 years
- Spot price case after tax NPV (8%) $158 M and IRR 27%
- Spot price case after tax payback period 3.0 years
- Average annual production of 124M lbs of lead, 50M lbs of zinc and 298K ounces of silver
- Life of mine all-in sustaining Cash Cost (AISC) of $ 0.71 / lb payable lead in concentrate (after credits)
- Average net smelter return (NSR) 135 /t of ore
- Opportunities for continued refinement through further mine plan optimization and metallurgical test work
- There remain significant Mineral Resources not included in the PEA mine plan, which, with further drilling will potentially increase the mine life or increase production rate
The company also is launching a drill program in May to demonstrate more resources and value for the property. President and CEO Michael Williams, commented “We are looking forward to the upcoming drill program as we will be focusing on the key value levers associated with the current PEA mine plan. Coupled with the fundamentals for both lead and zinc remaining very positive, the incremental benefit of any one of these could be material to the Pegmont project. The program will also focus on resource growth again and will include testing of multiple key exploration targets where little or no drilling has occurred, including the Killer Bore (a high-grade zinc prospect), extensions to the Bridge Zone and the Wills Zones.”
You can access the complete 43-101 report done in 2019 by clicking here. Here is a video presentation to give you an idea of what the project looks like.
Disclaimer:
Mike Swanson owns shares of Vendetta Mining. Because it 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. In July of 2020 was compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Vendetta Mining during that. This third party paid Timingwallstreet Inc., $10,000 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns in July of 2020. 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.
