On the last day of November Jerome Powell spoke and said what everyone wanted – the Fed is looking to reduce the rate of its next rate hike to 50 points. That reduction drove bulls into stocks and precious metals, with silver going up more than the S&P 500. In fact as you can see from this relative strength plot on the bottom of this chart the SLV silver ETF is now outperforming the S&P 500.
Resistance for silver is cleared. Big cap silver mining stocks have gotten a big bid in the past few weeks and look set to rally into the end of the year and beyond. An easier Federal Reserve, when compared with other central banks around the world, should translate into a decline in the US dollar index next year and a rise in precious metals.
When gold and silver go up, typically the big cap mining stocks go up first and then small cap mining stocks follow.
The small cap exploration and junior mining stocks took a big hit this summer and now there is chance to look for value buy points in depressed stocks in that sector.
One such stock is Norseman Silver, which trades as NOC on the TSXV and as NOCSF on the US OTC. The stock is trading with a market cap of around $3.75 million USD. In metals bull runs small cap stocks in the mining space tend to reach markets caps of on average $25 million USD.
That’s how depressed the sector has gotten.
The company is focused on acquiring, exploring and developing silver assets with significant upside potential. Norseman’s current property portfolio includes the Cariboo, New Moon, Silver Vista, and Silver Switchback projects. All four properties are located a prolific mining region in mining friendly central British Columbia, Canada.
It also has a two silver properties in Argentina.
The goal of companies like it is to explore the properties with drilling to hopefully build value on the reserves to demonstrate viable mining. Then they either raise more money to mine it or look to do a joint venture deal with a major mining company. Sometimes they can even get totally bought out by a bigger company.
The small cap exploration stocks typically will do a financing to then execute an exploration drilling program, which can provide positive news flow for a stock.
Norseman raised money in a private placement in May and is now drilling on its Taquetren property in Argentina.
In September it announced a positive exploration results in a press release:
The company was please to “announce rock chip samples which were collected from the Veta Nueva vein, another significant vein structure located about 5 kms. northwest of the Veta Juan vein, picked up very encouraging assay values. Norseman Silver has an option to acquire a 100% interest in the Taquetren Project.”
“These recent results highlight the potential of the Taquetren Project which is very unique, since it has seen little or no previous exploration for base or precious metals. Considering the projects proximity to significant discoveries and the sheer size of the project (6 cateos or prospecting permits totalling ~59,000 ha), this represents an exciting opportunity for Norseman. The results to date, in particular the copper grades are very encouraging.” Stated Sean Hurd, President & CEO.
“The upcoming program at Taquetren will involve more detailed surface work along the 5-km. target corridor. Multi-element soil grid geochemistry as well as more detailed geologic mapping and rock sampling shall be carried out within an area of about 3,000 hectares. The same soil survey area shall also be covered by ground magnetics, the complementary results of which will eventually be utilized to design the ground IP-Resistivity survey layout,” the press release stated.
The company expects, “through the course of the detailed surface studies at the initial target area, prospecting work shall be carried out simultaneously within the rest of the expanse of the six (6) cateos. With the encouraging results of the 2021 surface exploration work, the likelihood of finding additional target zones for further detailed studies remain high. Rock chip samples which were collected from the Veta Nueva vein, another significant vein structure located about 5 kms. northwest of the Veta Juan vein, picked up very encouraging assay values. Two (2) samples showed average values of 4.11% Cu and 67 ppm Ag. The vein which has a currently exposed width of 2.70 meters resembles closely Veta Juan and is characterized by strong disseminations of chalcopyrite and bornite associated with malachite and azurite.”
With a market cap this low for Norseman and an exploration program in progress this is a deep value pick in the mining space just at the right time. The company’s chairman, Campbell Smyth, did an interview in May with Mining Network about what they are doing.
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Disclosure: Because Norseman 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 post (12/01/2022). 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., $9,700 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for December, 2022. 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.
