While technology stocks rolled over in the fourth quarter to enter a vicious bear market in 2022, gold, silver, metals, and mining stock broke out in January to launch new bull markets. They are outperforming the S&P 500, along with the overall commodity complex, and the best way to beat the market is to be holding and buying the things doing just that on dips.
I own a lot of gold and silver mining stocks, but they are not all there is to the metals world. Uranium has seen a big bid and so has the price of copper. You can see from this chart how it had a massive surge after bottoming in 2020 and has since been one of the steadiest metals you can see in the markets.
I have positions in copper giants such as Rio Tinto and BHP and have mentioned them in the past. Last week I also took a position in small cap copper junior exploration stock Allied Copper Corp, which began trading just last year under the symbol CPR on the TSXV and CPRRF on the US OTC.
The stock is a deep value play as it has a market cap less than $5 million USD. In bull cycles stocks like this typically reach market caps of five times that value. This exploration company has assets in mining safe Nevada, Colorado and Utah with a multi-year growth pipeline
The company has three key exploration properties in play. They are the SK, Klondike, and Stateline Properties.
The company is brand new and came public through a private financing and has now launched new exploration programs on the SK and Klondike properties to demonstrate their mining value.
On April 7, Allied Copper announced that it had completed a 3D (IP) Survey on the SK Property and discovered a large anomaly. According to a press release, “The anomaly measures at its longest approx. 1.1 kilometres, at its widest approx. 850 metres and from surface maximum survey depth penetration of approx. 500 metres. Dias Geophysical undertook the survey on behalf of the Company.”
The Chairman of Allied Copper said, “With the confirmation of a large chargeability anomaly in the SK area of the property, we are delighted about the incremental de-risking for a potential for discovery during our 2022 drilling program. Now that we have three properties in exploration, we are examining the most effective and economical approach to the drilling campaign. All three properties have a high potential discovery and we are in a unique position of not having all of our eggs in one basket. We have an experienced exploration team and will quickly mobilize additional funding and resources to take advantage of any positive drill results at any one of our three locations.”
Just last week the company also filed a 43-101 Technical Report for the Klondike Property, Colorada with SEDAR. The company bought a 100% ownership mining rights to the property in December. It stated that, “At Klondike, documented copper exploration ceased in the 1960s with subsequent exploration targeting uranium during the 1970s. Previous work reported high-grade copper mineralization highlighted by results of 6.3% copper and 23.3 g/t silver in rock outcrop. In addition to its high-grade potential, disseminated copper-silver mineralization has been observed which may be amenable to modern open pit mining with Solvent Extraction Electro Winning (SXEW) processing similar to the Lisbon Valley Mine. Sedimentary-hosted copper deposits are an important contributor to world copper production, accounting for more than 20% of the world’s copper supply annually.”
The Chairman of Allied Copper explained at the time that “it is our plan to drill prospective targets at each property in H1 2022 and then develop utilising our significant treasury raised in 2021. The Allied management team has a track record of taking an asset into production and in replicating this at our portfolio of assets, we hope to be able to meet the anticipated copper shortage with these properties. We are extremely excited to be adding an asset that shows such promise and will continue to evaluate further strategically located assets.”
This plan is now coming to fruition.
The overall market volatility has created a short-term opportunity, I believe, to buy Allied Copper in what is a deep value price.
A few weeks ago the Youtube channel The Market Mindset did an interview with one of the directors of Allied Copper who gave an overview of their plans.
You can find the most recent investor PDF presentation for Allied Copper here.
-Mike Swanson
Disclosure: Mike Swanson owns shares of Allied Copper. Because Allied Copper 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 (05/02/2022). 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 Allied Copper. This third party paid Timingwallstreet Inc., $14,000 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.
