Opinions
Joe Mazumdar
Regulus Resources Inc.
REG-X
TOP PICK
Mar 05, 2019
Stock price when the opinion was issued
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REG is a mineral exploration company that acquires mineral resources that management feels have overlooked potential, it adds value by investing in the sites, and monetized by selling to a major mining company. In 2005, it acquired Antares Mineral, invested in exploration on the site, and sold to First Quantum in 2010 for $650M. Currently, it is focusing in its flagship project, the AntaKori copper-gold project in Northern Peru. REG is conducting drilling programs at AntaKori, and has some partnerships with Osisko Gold Royalties in respect to AntaKori. It could sell the project down the line to monetize it and add shareholder value. For now, it is pre-revenue, its momentum has been good, and the management team is experienced. We think it looks interesting, but being a small company and with no revenues, we would consider it to be on the riskier side. We would be OK with a small position, while acknowledging its small-cap risks, and slightly more speculative in nature.
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He's a fairly big shareholder and a fan of management. Absolutely believes Peru project will become a mine. Copper price has done well, and gold price has done extremely well. Ongoing regulatory and capital challenges. Expects stock volatility, but much higher over next 3 years. You'll need to be patient.