TLDR: Gold mining stock poised to provide 800-1200% ROI over the next 3 months.
Laurion Mineral Exploration (LME.V on the TSXV) is a junior brownstone polymetallic mining company focusing on proving up resources on its flagship Ishkoday Project with the end-goal of a full-cash buyout in the near term. Assay results have shown a strong presence of Gold, Silver, Zinc and Copper mineralization throughout the property. As a result of the mineralization being near the surface, LME was able to first channel sample the property to create a 2D GIS model, and over the last couple years has executed a very successful drill program to turn that 2D model into 3D. Managements goal over the past few years has been to prove up resources amounting to 10 million Gold Equivalent Ounces (GEO's). Although an NI43-101 has yet to be filled, I believe they've managed to hit that 10M GEO target and as a result of the expansion of the original mineralized area (called the McLeod Zone) the number of GEO's being considered for a buyout could instead be in the neighbourhood of 12-15M.
The company doesn't hold any debt and has been able to fund its drilling programs through successful private placements over the last number of years that have all been oversubscribed. As it stands, assay results for 12 more drill holes are expected. To meet regulatory requirements, LME needs to hold an AGM by September, which leads me to believe that big news could be coming in the next 3-6 weeks. It was announced this week that the CEO has exercised options for 1,530,000 shares, many of which weren't expiring until the end of 2022, 2023, and 2024. If that's not a bullish signal for you that something big is about to happen, then I don't know what is. She's also never sold off any of her shares of LME, so I wouldn't be scared that she exercised her options, only to sell them at a good profit. In fact, she's LME's largest shareholder, which is why I have the confidence she's got her shareholders best interests in mind seeing as she has so much personal capital invested and so much to gain herself.
With the stock mostly trading in a $0.90 to $1.15 range for the past few months, where do we see it going from here? Earlier in 2022, another Canadian Junior Miner (GBR) was bought out by Kinross Gold for what I believe was $200/oz. Most of GBR's mineralization was at depth's of ~1800m, which makes it very difficult to access. If GBR was able to fetch that price per GEO, then what can LME reasonably expect to see on an offer sheet when an open-pit mine is feasible as a result of the mineralization being at the surface!?! Conservatively, if for some reason, the market downturn, and managements requirement for an all-cash deal results in LME receiving a similar price per oz as GBR then at 10M GEO's, they'd be looking at a $2 billion cash offer. With a little over 250 million shares outstanding, this results in a buyout price of $8.00/share, which is an 800% increase from current market prices. If we ere on the side of optimism with something closer to $300/oz. and/or 12-15M GEO's, then a buyout price of $10.00-14.00/share isn't unreasonable to expect.
From their latest PR, it's mentioned 81% of shares are held by "friends and family" insiders. This means there's at most 48 million shares up for grabs by the street. I doubt anyone within that insider category are willing to part with any of their shares if they have an inkling of an idea what the company's end goal is. With the prospects of a 10X investment being ripe for the pickings to anyone with an investment account, I find it hard to believe the share price isn't currently above the $2.00-4.00 mark. Clearly this company isn't being spoken about enough, and it's truly in the category of a hidden gem. With inflation hitting such high levels, gold is going to be the safest place for investors and I think LME provides tremendous upside potential.
Let me know if you have any experience with other junior gold miners and potential buyout targets as well as what was a price you've seen get paid per GEO.
Disclosure: I've added 39,000 shares to my portfolio over the past two months.