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Tracker - December 27, 2019: Spec Value Rating for Amarc Resources Ltd (AHR-V)
 Amarc Resources Ltd was downgraded from a Bottom-Fish Spec Value rating on December 27, 2019 to a Zombie Spec Value rating following a lacklustre market performance during the 5 years since acquisition of the IKE copper-moly-silver porphyry project in southern British Columbia. Amarc has been part of the Hunter-Dickinson group since the mid-nineties when it peaked at $4.25, and has operated as the group's BC exploration arm for the past two decades during which Bob Dickinson hoped to repeat the Kemess and Mt Milligan discovery successes. During this period HDI created a number of new companies with advanced projects of which the most important became the Pebble copper-gold project acquired by Northern Dynasty from Teck which gave up on Pebble for two reasons, one being the so-so grade of the known resources and the other being the location in Alaska where open pit mining might potentially impact the salmon fishery. Northern Dynasty solved the grade problem by using geophysics to discover a deeper, much richer resource that turned Pebble into a world class copper-gold resource similar to what Robert Friedland's Ivanhoe accomplished with the Oyu Tolgoi hand-me-down from BHP in Mongolia. But Northern Dynasty is still struggling to overcome entrenched opposition to Pebble's development. Amarc was an also ran during the 2003-2011 resource sector boom cycle, but IKE caught our attention in late 2014 as an emerging grassroots discovery which Dickinson bankrolled with a $1 million loan. Diane Nicholson was brought on as CEO to run Amarc which beefed up the Duke and Joy projects in northern BC, shunting aside the Newton and Gallileo disseminated gold plays that were the focus during the 2000's. IKE, which is a district scale copper system, attracted Thompson Creek as a farm-in partner in late 2015 but the option was dropped in early 2017 when Centerra Gold acquired Thompson Creek. By mid 2017, however, Amarc had attracted a strong farm-in deal from Hudbay for IKE, and a few months later for Joy, but in January 2019 Hudbay dropped both options. Since acquiring IKE Amarc has done only one financing for $2.6 million at $0.20 with no warrants, but at the end of 2019 Amarc had negative working capital of $800,000 and a stock price below a nickel reflecting market skepticism that Amarc will be able to attract a strong farmout deal for IKE after two producers dropped their options. In late 2019 Amarc extended the $1 million unsecured loan from Bob Dickinson for another 5 years at 10%, and issued 16 million bonus warrants at $0.05 for 5 years which lifts fully diluted to 196.6 million shares. Because Dickinson at 27.8 million shares is by far the largest shareholder, and also the major lender, with no other members of the HDI group with any meaningful visible skin in the game, the destiny of Amarc rests entirely on his shoulders. IKE needs to deliver a substantial zone with a better grade than 0.2%-0.3% copper to become a development candidate, and short of finding another partner, there is little Amarc can do to advance its BC projects without undergoing substantial dilution. As long as the junior resource sector remains bearish for base metals and Northern Dynasty the top priority for the HDI group, Amarc Resources Ltd will trade like a zombie junior.
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