As you can see, the market has been running and now it's pulled back. Nothing goes up forever; a correction is healthy and the last two weeks have given investors a chance to take a step back and breathe.
Experienced investors know that the underlying fundamentals behind the junior mining markets remain strong. Near zero and negative interest rates will continue to support the price of gold. Its consolidation above USD $1,300 is a great sign. The gains we have seen to date come off the backdrop of a brutal 5-year bear market, still leaving tons of upside. Plus, TSX Venture investors are notorious for reinvesting their winnings… and then some. We expect more big winners this fall.
A deal we took public in 2014, OrganiGram (TSX.V: OGI), at a CAD $35 m market cap is now trading well north of a $120 m valuation. Sector fundamentals continue to improve and with legalization on the horizon we have decided to invest in a second Licensed Producer, Emblem Corp. The recent Private Placement was done at a CAD $22.4 m pre-money valuation, a significant discount to its competitors. Emblem CEO John Stewart was responsible for bringing 11 pharmaceutical brands to market including OxyContin, when he ran Purdue Pharmaceuticals, one of the world's largest privately held pharmaceutical companies. It is backed by a trusted associate of ours with a lot of financial horsepower and enthusiasm for the business. We believe Emblem Corp. will be a winner this October when it comes to trade. I sent out a note regarding Emblem earlier this month – congratulations to those who seized this opportunity.
Millennial Lithium (TSX.V: ML), a name we recently brought to your attention, has successfully closed off on a CAD $4.75 m Strategic PP, which our network was involved in. Millennial has brought on Salta based Iain Scarr to run project development in Argentina. Iain was responsible for bringing the Sal de Vida lithium Brine project in Argentina through feasibility with Lithium One, which was acquired by Galaxy Resources. Following Galaxy, Iain completed the definitive feasibility on the Rincon project with the Enirgi Group. Technical expertise like this is hard to come by in a time where everyone is chasing Lithium in Argentina. Millennial is now trading at a CAD $1.57, or a $41 m market cap, which is a significant discount to its competitors. With positive catalysts, we believe a $2.50 share price is achievable in the short-term.
Some other housekeeping issues: Golden Predator Resources (TSX.V: GPY) which we introduced at $0.35 in May has just closed a $16 m placement with a $7.3 m lead order from Eric Sprott. Last trading at $0.93, they have had some very encouraging news from their 3 Aces Project including visible gold. Neo Lithium (TSX.V: NLC) is holding at $1.50 and is set to test how big their high grade 3Q deposit really is. With the market watching, there could be a speculative run-up when the drills start turning in the coming months.
Justus Parmar
