Our pick for this month is one that picks all of the criteria I like. Before I begin, let me talk about the company. Let me show you what I call my 5 ps of Junior Investing. I originally read this from Doug Casey (added a bit too it myself).
The 5 Ps
- People – This is the most important aspect of a junior company. The people who run the deals , they put the properties in them, they raise the money, they deal with the regulations , raise the money etc.. You want a management team with a history of success and building and selling companies.
- Properties – What makes a company is quality properties if they don’t have something economic it won;t work. You like to see something in an area with a history of production.
- Politics – You want to be in mining friendly countries and jurisdictions. If a country is unstable you could see problems at the mine, nationalisation etc…Many countries have a good solid history of mining laws and production
- Promotion – Well you do not want a company to be only promotion you need a company to be able to get investor interest. As they say, if a tree falls in the forest and no one hears it, did it fall? Well if a company has great results and no one knows about it no one will buy!
- Phinancing (with a ph) – To drill and build a project you have to have the ability to raise money and the like!
Dios Padre Project
Regency Silver fits the Bill on all accounts. Firstly, it has an excellent main project is the Dios Padres project which is located in Sonora, a mining province in Mexico. It is surrounded by numerous mines run by large cap and mid tier companies making it a prime take over target.
- Excellent access to infrastructure including a major highway, small plane access, power and skilled labour. Management has been working in the area for the last 18 years.
- The Dios Padre project contains two main targets. The first is the area around the historic Dios Padre silver mine.
- Dios Padre’s old silver mine workings contain a NI 43-101 inferred resource of 11.375 million AgEq ounces (94% Ag) at an average grade of 255.64 g/t AgEq. at a cutoff grade of 120 g/t AgEq. Dios Padre is a high-grade deposit as evidenced by its drill intercepts which include:
- Hole FMR 12-06 with 1.9 meters of 3220 g/t silver inside an intercept of 32.5 meters of 408 g/t silver
- Hole FMR 17-06 with 5.2 meters of 1145 g/t silver
- Hole RDP 18-12 with 12.4 meters of 558 g/t silver
- Hole FMR 15-06 with 28.8 meters of 467.8 g/t silver
11.4 millions of silver is not a huge resource; it’s roughly just over 140,000 ounces of gold equivalent .I believe that investors can become too obsessed with a resource. If a resource was that great in many cases then why hasn’t a major swept in and taken it over or even a mid tier. Because most of the grades are too low and are not economic. Many companies that get taken over don’t have huge resources because companies see the value and geology in the project and sweep in and buy the company out. As you can see as Regency is surrounded by other producers in the area it could be a prime candidate for take over. They are finalising a $2.5 million dollar financing which will be used for drilling in the coming months.
Political Situation
When it comes to politics Mexico has been mining friendly for decades. Recently, they had a far left President who was anti mining. But he could not run again and the ban on open pit mining will probably be deemed unconstitutional and the new prime minister despite some recent rhetoric hired a very mining friendly mining minister. We must remember the new President was the mayor of Mexico City and has all sorts of business contacts and she will not want to upset them.
Management
Management is lead by Bruce Bragagnool the EXECUTIVE CHAIRMAN & DIRECTOR
- Mr. Bragagnolo was a director of Continuum Resources Ltd. when it acquired the San Jose Mine in Oaxaca, Mexico. Continuum Resources Ltd. merged with Fortuna Silver in 2004 and the San Jose Mine is now its flagship asset with 2022 production of 5.76 million ounces of silver and 34,000 ounces of gold. (Source: Fortuna Silver website).
- Director Michael Thomson was a founding director of the company that eventually became Palmarejo Silver and Gold and was also a director of GR Silver Mining Ltd., a Mexico focused silver company.
- Therefore Bruce has a history of production and selling companies to mid tiers.
Gijsbert Groenewege is the President and CEO
- Managing Director at Silver Arrow Partners a NYC/Amsterdam based advisory firm.
- Co-founder of The Gold Arrow fund, investing in alternative investments since 2006.
- Co-founder of The Europe Company, a London based agency broker, in 1991.
- Served as director of several international mining companies
Promotion and Phinancing
The company has a strong marketing team and has gotten the word out in the past so they will be able to tell the story if there are more strong results.
Finally when it comes to financing the company should be well financed, Bruce brought the company out in 2022 in one of the worst junior markets I have ever seen. They are in the final phases of completing a 15 cent financing of $2.5 million (which I participated in) which will be used for the next drilling program!
Technically, I like the stock too. It has a very nice base with resistance around 15-16 cents if it can break that I think it can really run.
Go RSMX!
-David Skarica
Disclosure: Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to publish this article. This third party paid Timingwallstreet Inc., $1,400 to produce and disseminate this and other similar articles about Regency Silver and send traffic to them through paid advertising campaigns for 30-days from the date of 11/04/2024. 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. Mike Swanson is the President of Timingwallstreet, Inc. Because Regency Silver 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 publication date (11/10/2024). David Skarica was paid $7700 Canadian from Regency for this and contracted out third parties as for the marketing services. He also owns the stock. He will not sell the stock within 30 days of this writeup.
