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Michael GiordanoRoyal Nickel Corp RNX.TOPARTIAL BUYMay 28, 2013

This has the Dumont nickel property in Québec and is obviously leveraged to the price of nickel. Has gotten so beaten up that you could nibble away at these prices.

Michael Giordano

Unlock Rating

$0.58

Stock price when the opinion was issued

$0.48

As of Jun 16, 2020. Market Open.

Mining

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DON'T BUY

This should be going up as with other stocks in this sector. If it is not, then you should own something else. There was a bottom in May that we tested, so that is positive. The relative strength vs. the index is not good.

COMMENT

RNX is producing as opposed to drilling like many companies are. They're also generating good cash flow. But continuity is a concern. Brent Cook: restrictive, small but high-grade veins.

WATCH

They used to be a nickel asset but the focus is now on gold assets in Australia. It is a low grade/high cost mine. They found the gold zone was small but now got into another zone with fantastic grades. The market has soared. They have now mined out the high grade zone. The risk reward is unfavorable at this price. He is watching the name.

DON'T BUY

Once in a while they have a big run. He hasn't look at this in years, but he feels this doesn't gain traction for very long. If you do buy, determine an exit level (selling price), because it never seems to go up and stay up.

RISKY

They have announced a gold find in Australia recently. He thinks it is very early days and they need to prove things up. He thinks investors are looking for this company to be acquired. He hopes they are successful, but views it as speculative at this point.

WATCH

He's watching it. It's likely that money will flow into precious metals. But names like this are highly spectulative. If he'd buy it, it'd be a small position.

COMMENT

It's harder to apply technicals to a small-cap stock. They've had a downtrend since 2014, but only recently broke this into a sharp uptrend. You want to see it hold at 60-cents. They need to announce some good news to push the stock up. Technicals can reveal only so much.

DON'T BUY

They hit an amazing seam of gold. But he doesn't see enough geological information to assume a lot of material there, though the grade appears to be spectacular.

WATCH

You have to have a lot of patience with these stocks. A lot of companies go through these changes where they transform to something completely different. It looks like it is going through the phase of the next press release causing the next upside move. If it gets above $0.90 it would be a breakout and definitely above $1.10. It has to break out before you buy it. If you bought below $0.10 then take half your position off.

RISKY

Doesn't generate much free cash flow but occasionally they find very high-grade nickel like recently. This has helped their debt. They are now focused on Beta Hunt in Australia. It's a nice speculative play.

COMMENT

They were trying to sell their Australian gold assets and found gold in the process. There is much talk of the Quebec nickel project that would require a $1 billion of investment. They ran out of patience waiting for projects to be developed, so have not bought back into it.

WATCH

They did a royalty deal. They are getting caught up in the cobalt story. He has been in and out of the name. It is a morphed animal. You will get a little more press on it. He is out for now. He is watching it.

COMMENT

In some way, this company has transitioned positively. They now have revenues. Have lowered their operating costs. Still losing a lot of money, about $12 million last quarter. A few years ago, they had around 90 million shares, but now have about 307 million shares, which makes it very, very hard on the upside. There could be a further dilution. Speculative.

COMMENT

This is a small-cap company. He recently did a flow-through financing for them. Despite the name, this is going to be producing gold and copper in the 2^nd half of 2017. It will probably generate $15-$20 million in cash flow in the 2^nd half of 2017.

COMMENT

(Market Call Minute.) Doesn’t understand the gold deposit well enough to own it at this price.

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Michael GiordanoRoyal Nickel Corp RNX.TOPARTIAL BUYMay 28, 2013

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