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One junior mining company’s issue is now being transformed into a big opportunity for investors.
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The issue? ValOre Metals (VO.V; KVLQF.OTCQB) boasts two exceptional projects, but each in very different sectors:
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• The Pedra Branca platinum-group-element (PGE) project in Brazil is a world-class project focused on commodities that are soaring in value. And ValOre just announced a doubling of its resource to 2.2 million ounces of PGE-plus-gold, with more to come.
• The Angilak uranium property in Nunavut is one of the best projects in the world in the red-hot uranium sector. Its 43.3 million pounds of uranium is set to grow with an upcoming exploration program.
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Here’s the problem: ValOre is arguably being valued by the market like it has just one of these projects, and not both.
Each is shadowing the value of the other.
The opportunity? ValOre has just announced a strategic review designed to unlock this hidden value.
For investors, this means that — in addition to the tremendous potential each project now offers — ValOre is also presenting the potential for a quick and profitable market re-rating.
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Turning A Key To Unlock Tremendous Value
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ValOre’s management team looked at the value the market is ascribing to its two core projects and decided earlier this month to look at strategic alternatives for those assets.
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Those alternatives could involve a spin out of either the Pedra Branca PGE project or the Angilak uranium project, the outright sale of either one, or some combination with another asset or company to daylight the value of each project.
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When made, this move should result in the market giving ValOre full value for Angilak, and its world-class uranium resources and full value for Pedra Branca and its similarly world-class PGE resources…with much more room to run on growing each one.
It’s rare to see one investment that yields two high-potential opportunities, with the price of that investment fully justified by just one of the opportunities.
But it’s also hard to imagine two more strategic opportunities, with the global geopolitical situation creating strong markets for both PGEs and uranium.
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Maximizing The Value Of Two Flagship Projects
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A quick look at both Pedra Branca and Angilak makes clear they make for great stand-alone projects.
Having spent just C$6.1 million on drilling since acquiring Pedra Branca in 2019, ValOre has doubled the 1.1-million-ounce resource it inherited.
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And that’s just the start, as the company has developed a powerful system for exploration that is allowing it to quickly identify new targets.
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A good example of this latter point came this month from the Ipuieras target, which was originally defined by Trado® auger drilling and then validated by trenching.
With a 2.2-million-ounce inferred 2PGE+Au resource to build on and a tried-and-true game plan for turning up more resources on this district-scale project, Pedra Branca will be a strong asset no matter where it lands.
And Angilak will be too. This 43.3-million-pound U3O8 deposit in Nunavut helped the previous version of ValOre achieve a market cap of C$90 million in 2011 during the last uranium bull market.
Global supply and demand dynamics are now quickly moving in uranium’s favor, making this a perfect time to have Angilak and its large uranium resource in its own pure-play vehicle.
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In looking at splitting up Pedra Branca and Angilak, ValOre Metals is meeting a market demand.
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The PGE investor and the uranium investor have different motivations and risk tolerances. As such, it makes good sense to give investors the option of investing in a pure play PGE resource and a pure play uranium project.
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With essentially two perfectly-positioned companies in one, the team at ValOre is confident that forcing the market to assign a value to each core asset is the best way to unleash the value of both assets.
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Exploration All Along The Way
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Bear in mind, ValOre will maintain full speed ahead on its exploration work on both projects while it mulls its strategic options for the projects.
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• At Angilak, ValOre has committed C$11 million to exploration, including 4,000 meters of RC drilling, geophysical and sampling work and 4,000 meters of diamond drilling.
The RC drilling has already begun and will build on the C$55 million of exploration ValOre has already done on Angilak. That work should allow the company to deliver strong results from the many exploration targets on the project.
• At Pedra Branca, meanwhile, that combination of Trado® drilling followed by trenching and then full-scale drilling promises to maintain the exploration pace on that Brazilian project.
The aggressive approach to building resources makes it apparent that the 2+-million-ounce resource is just the start.
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In short, this will be anything but a quiet period for ValOre Metals, and work on both projects in the days just ahead promises to keep the company top-of-mind with investors while it investigates alternatives.
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Whatever route the ValOre management team chooses, the odds are that the separation of Pedra Branca and Angilak will allow both projects to flourish.
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As a potential investor, you have a rare opportunity to own ValOre Metals before this value-triggering event plays out.
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A booming economy and a global focus on climate change ensure PGEs will continue to see high demand in their emissions-reducing role in catalytic convertors.
And as the war in Ukraine rages on, the undesirability of uranium and natural gas from Russia and Russian client states ensures the United States and the West will continue to look for domestic sources of uranium to shore up their nuclear power needs.
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It’s a combination of forces that makes ValOre’s plan to maximize the value of two legitimate, flagship assets…with each one offering the potential to make investors a lot of money in the near future.
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But the timing is key: To reap the full benefits of the eventual strategic decision by the company, you’ll need to consider investing in ValOre Metals today.
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