Kaiser Bottom Fish OnlineFree trialNew StuffHow It WorksContact UsTerms of UseHome
Specializing in Canadian Stocks
SearchAdvanced Search
Welcome Guest User   (more...)
Home / Works Archive / Kaiser Blog
Kaiser Blog

Kaiser Watch February 9, 2023: Australians setting the James Bay tone

Posted: Feb 9, 2023JK: Kaiser Watch February 9, 2023 with Jim Goddard and John Kaiser
Published: Feb 9, 2023KRO: Kaiser Watch February 9, 2023: Australians setting the James Bay tone
Kaiser Watch is a weekly 15-30 minute audio show produced by KaiserResearch.com with Jim Goddard and John Kaiser discussing the junior resource sector. The show has three parts: the first is a general topic, the second discusses developments involving the KRO Favorites which as of January 1, 2022 are no longer exclusive to KRO members, and the third is a peek inside the members only KRO Bottom-Fish Workshop. KRO is transitioning into a Do-It-Yourself research platform that covers all Canadian and Australian resource listings and which also features a Bottom-Fish Workshop where John Kaiser highlights juniors with solvable "missing pieces". Companies that graduate from the Workshop may become part of the Annual Favorites collection whose profiles and related commentary are unrestricted for non-members. Visit the KRO Favorites Dashboard for quick access to all the unrestricted Favorites related content. KRO is not sponsored or compensated directly or indirectly by public companies. The business model is based solely on membership fees in the form of a USD $450 Annual Individual Membership that at some point will increase substantially to reflect KRO's shift to a research platform. However, when the change happens active members will be grandfathered to renew indefinitely at the current rate provided they maintain a continuous paid membership. Kaiser Watch is available at Kaiser Research YouTube and as a Podcast downloadable from KaiserResearch.com. Each episode will be made available through the publication of a Kaiser Media Watch blog report which will provide links to specific questions and include supplementary graphics. All episodes will be archived at Kaiser Watch.

Podcast Download

Kaiser Watch February 9, 2023: Australians setting the James Bay tone
Jim (0:00:00): What is new with Patriot Battery Metals?

This was the week trading shifted from Canada to Australia. PMET released results on Sunday ahead of trading opening on the ASX for Monday, announcing that 4 holes drilled east of hole 93 had intersected broad intervals of spodumene bearing pegmatite, adding 400 m to the CV5 pegmatite. It is another 1,600 m to the CV4 outcrop on the north shore. Angular boulders found 1 km south of the lake suggest the lake covers a continuation of the pegmatite. We may get a weekly report of stepouts.

Trading on the TSXV on Monday morning reflected PMET's move on the ASX and triggered a broad rally in James Bay juniors that helped Brunswick Exploration clear $1 on the upside. Even Dios Exploration broke through $0.10 on the upside. By Wednesday morning, however, the James Bay area had cooled and PMET traded as low as $15.25 before a late day rally took it back through $16 before closing at $15.93. The rally also swept up Brunswick which closed at its previous $1.05 high.

It is now clear that Australian investors are driving James Bay sentiment, in particular with regard to PMET. ASX trading begins at 10 AM Sydney time, which is 3 pm Vancouver time, two hours after Canadian trading has closed. It now seems to me that when Australians wake up early in the morning they are checking the Canadian markets and buying PMET in the last hour if is cheap and sentiment remains strong in Australia. This last hour rebound in PMET may be inspiring Canadian and American investors to buy the other area play juniors.

This action reminds me of the diamond play in 1992-93 when Canadians were still trying to get their heads around the concept of diamonds in Canada. Investors in Europe and South Africa understood what Dia Met's Ekati discovery was all about. In a similar vein Australian investors who have lived through Lithium Mania 1.0 understand what is now unfolding in Canada's James Bay area whereas North American investors are still skeptical that this just another battery metals flash in the pan. In London which is 8 hours ahead the Canadian market would be open between 2:30 pm to 9 pm, so if there was good news released in Canada, there would be a flurry of buying early in the trading session after which the Europeans would sign off when they went home for dinner. For the center of gravity to swing back to Canada we need to see evidence that a major company is taking interest in PMET or completion of a big $100 million plus equity financing from institutions such as Blackrock, not just the Canadian ones, which validates the current implied project value of $2 billion.

That CAD $2 billion implied value (on a 100% basis, as calculated from Dia Met's fully diluted, 29% net interest and stock price) was what Dia Met achieved in April 1993, a mere 15 months after news of the Ekati discovery broke in late November 1991. A $3 billion value was achieved in 1997 but when BHP bought out Dia Met for its 29% stake in Ekati in 2001 the valuation was about $2.4 billion. The dream in 1993 was that Ekati would yield a truly world class pipe comparable top Jwaneng in Botswana, but that never came to be. In terms of the rational speculation model the Corvette project's valuation is in S-Curve territory, which is only possible because investors see multiple occurrences of CV5 scale lithium pegmatites within the Corvette trend that could be developed simultaneously to feed a giant processing facility with a capacity much bigger than the scale limit for open-pit mining these linear bodies.

Pilbara Minerals which today has a market cap of AUD $14.2 billion is an example of what PMET could become. PMET's price chart looks more impressive than that of Pilbara, but PMET has only 130 million fully diluted compared to 3 billion for Pilbara. One has to do the value math. The biggest obstacle to an aggressive move by the likes of Rio Tinto or institutional funding is concern that Canada, Quebec and its local First Nations groups lack what it takes to help make happen the 2030 EV goals seen as necessary for net zero emission by 2050. In the past the theme at PDAC has been what can the mining companies do to make the world a better place. I suspect this year the theme will be what can the government and First Nations do to help the mining companies make the world a better place.

Patriot Battery Metals Corp (PMET-V)

Unrated Spec Value
Corvette Canada - Quebec 3-Discovery Delineation Li

CV5 Drill Plan at PMET's Corvette project in James Bay

Implied Project Value Chart for Patriot Battery Metals

Exploration stage based IPV range chart for Dia Met's Ekati diamond project

Dia Met Price History and monthly peak Ekati IPV Chart

Pilbara Minerals Price Chart
Jim (0:09:52): Why did X-Terra do a 7:1 rollback?

The 7:1 rollback for X-Terra doesn't make a lot of sense. Post rollback there are 16.4 million shares issued and liquidity is gone. They raised $600,000 FT in December. Their Liberty property is on trend with the Jamar pegmatite of Winsome Resources which is helping Winsome raise AUD $60 million in a combination of flow-thru, rights offering and institutional private placement. Now the X-Terra stock is sinking. Cheap financing at a post rollback slumped price for the usual Quebec suspects at the expense of minority shareholders, or farmout deal with Winsome that pauses dilution? Winsome has moved on the basis of the Jamar showing whose apparent trend cuts through the corner of the Gallinee project of Azimut and Soquem which really has no implications for Azimut unless there are parallel repetitions, put the trend projects onto the X-Terra Liberty claim. Winsome's news releases and presentations very carefully avoid indicating what other companies are nearby, and since Jamar has emerged as the higher grade focus, graphics are all very small scale. X-Terra is an incompetent junior which has let somebody create the sort of useless web site popular with "battery metal" life-style juniors - lots of fancy dancing widgets but useless or outdated information and of course a "Frankfurt listing". They haven't updated their presentation since June 2022 and even then did not know that Winsome is the new owner of the Adina project. But I have taken the liberty to clip the map from the outdated presentation and marked it up to show how the trend of the Jamar pegmatite points at the Liberty property. I have also provided a snapshot of the web site as of February 9, 2023 to show how out of date it is. How lazy and irresponsible can a junior's management be?

X-Terra Resources Inc (XTT-V)

Unrated Spec Value
Liberty Canada - Quebec 1-Grassroots Li
Winsome Resources Ltd (WR1-ASX)

Unrated Spec Value
Adina Canada - Quebec 3-Discovery Delineation Li

Showing how Jamar Pegmatite in Winsome's Adina property relates to X-Terra's Liberty claim

Drill Plan for Jamar Pegmatite at Winsome's Adina property

Snapshot of X-Terra's fancy but hopelessly outdated web site

IPV Chart showing relative valuations of Winsome's Adina and X-Terra's Liberty projects
Jim (0:13:00): Why is Harfang Exploration catching market attention?
P>Harfang Exploration Inc, which since inception has been focused on gold and base metals exploration in the James Bay region, has gone on a lithium staking binge that draws on CEO Ian Campbell's experience as exploration VP for Avalon in the late 1990's when it discovered the Big Whopper pegmatite at Separation Rapids. Most geologists have never had reason to know much about pegmatites other than to recognize and avoid them because they had zero economic potential. Harfang has used lake bottom sediment geochemistry and geology to identify settings with potential LCT-type pegmatites. They aren't on trend or close to current hotspots, which is what makes them interesting when the company puts boots on the ground this summer. Its primary focus is Lake Marinek whose gold potential is being drilled now. The company has $8 million working capital and is part of the 2023 Bottom-Fish Collection. The IPV Chart shows that the market is assigning a value of only $16 million to Harfang's 100% owned projects.
Harfang Exploration Inc (HAR-V)

Bottom-Fish Spec Value
Lac Menarik Canada - Quebec 2-Target Drilling Au

Harfang's properties in southern part of James Bay

Harfang's properties in northern part of James Bay

Harfang IPV Chart showing low valuations of its gold and lithium projects
Disclosure: JK does not own any of the companies mentioned; Harfang is Bottom-Fish Spec Value rated

You can return to the Top of this page

Copyright © 2023 Kaiser Research Online, All Rights Reserved