From the KereportAs usual for the Kereport here is an excellant exchange about Brixton:
On January 21, 2020 at 3:52 pm,
blazesb says:
Mathew, just letting you know that since last july several times via email i asked bbb to clarify just how far from hole #150 stepout followup holes would be and how many. Each time i was told that Gary Thompson would address this question when drilling results were released. That has not proven to be the case. Instead we make do with guesstimates from eyeballing site maps with their scale.
You are correct about brixton’s leverage to silver.
Gary Thompson has allowed his attention to stray from one of the best holes drilled ANYWHERE in 2019. Two stepouts near hole #150, six over three kms away at Chivas and sundry others scattered over the Thorn property. That doesn’t cut it.
I fear that the strength of Brixton’s four promising properties is becoming a weakness as Gary Thompson goes from property to property/priority to priority.
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On January 21, 2020 at 3:58 pm,
Matthew says:
That’s good to know, Blazesb, thanks for sharing.
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On January 21, 2020 at 9:37 pm,
b says:
” Each time i was told that Gary Thompson would address this question when drilling results were released. That has not proven to be the case.”
Big red flag, when management doesnt do what they say they will, thats trouble.
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On January 22, 2020 at 7:45 am,
Excelsior says:
blazesb – Good comments regarding BBB and their tendency to go “from property to property/priority to priority.” They seem to have ADD regarding what their flagship is going to be (Thorn, then Langis, then Hog Heaven, then back to Thorn, then Atlin, then Thorn, maybe Hog Heaven, now back to Atlin).
One of the biggest knocks against them is they keep pulling the market one direction – Gold focus, then Silver focus, then Cobalt hype, then spinning out a Cobalt/Silver company, then back to Gold focus, then Copper at Thorn, then back to the silver, etc…. They need to do a better job of picking the flagship property and succeeding at defining an economic deposit that can be mined, and then outlining a clear plan at the other properties, and if they aren’t going to work them, the JV them out to companies who will.
I’m a fan of BBB and have been invested at various position sizes since 2016, and added some more recently into the weakness, but they’ve had an identity crisis for the last few years, and need to crystallize their focus and approach moving forward.
Most investors discussing them on other forums have been mostly ignoring their Silver properties since 2017 and have been more focused on following the Gold & Copper drilling at Thorn, and the Gold exploration at Atlin. I’m happy to see they are at least going to do some drilling at their Silver property Hog Heaven this year, but that part of Montana is not easy to get a mine permitted in, and Coeur has been struggling to get mines developed there for years, so I’m not sure what good finding more Silver will be if they can’t get it back into production. I’m still disappointed that they mostly have walked away from Langis/Hudson with the high grade Silver/Cobalt values, as that is what really fueled their stock higher in 2016.
Wishing Brixton the best, but it would be nice to see some execution for a while moving Thorn forward as the flagship, or if it is going to be Atlin, then focus on it with guns blazing.
Ever Upward!
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On January 22, 2020 at 7:56 am,
Excelsior says:
Brixton abandoned the plan to spin out Langis/Hudson Bay into a Silver/Cobalt company 2 years back, as the steam came out of Cobalt, but in retrospect it may have been a good idea as they are getting 0 value out of those properties in their portfolio (which looked much more interesting than most of the prior work they had done at Thorn and Atlin). Also there was already a history of mining in Langis/Hudson Bay with plenty of infrastructure & power access & water access in place, so it would be the easiest path to production for them.
It may be wise to spin out a “New company” with both Hog Heaven and Langis/Hudson Bay combined, and create a Silver exploration and development focus for that company.
Then Brixton could stay more focused on Gold/Copper like they have been with Thorn & Atlin.
They’d clearly define the focus of both companies that way (1) Gold/Copper (2) Silver/Cobalt/Zinc/Lead and would attract more investors that don’t want to buy into an unfocused mashup.
On January 22, 2020 at 8:46 am,
Matthew says:
Brixton was actually done rising by the time the high grade Langis results were reported in 2016 so I’m not sure the property had anything to do with the rise. In fact, there was no great news to speak of during the huge move that year and the only press release the year before (2015) contained this at the end:
Brixton is an exploration company focused on the advancement of high-grade precious metal assets to feasibility. Brixton’s Thorn project hosts a district scale Triassic to Cretaceous volcanoplutonic complex with several styles of mineralization related to porphyry and epithermal environments. Targets include sediment hosted gold, high-grade silver-gold-lead-zinc-bearing diatreme-breccia zones, high-grade gold-silver-copper veins and porphyry copper-gold-silver. The 28,000-hectare Thorn Project is located in the Sutlahine River area of northwestern British Columbia, Canada, approximately 105 km ENE from Juneau, AK.
-end-
So it seems it has always been about Thorn. Still, so many silver stocks did so well that year that company-specific news of any kind probably played only a small role in the advance, in my opinion.
I bought quite a bit more at .155 today.
On January 22, 2020 at 9:49 am,
Excelsior says:
Most of the press releases in early 2016 were about Langis & Hudson Bay – Their silver properties. They had just acquired them in early 2016, and that is what was animating most of the share prices moves, and certainly why I started following them. They had been drilling on Thorn simultaneously but many were realizing they hadn’t drilled up enough to make an economic deposit, so the narrative was definitely getting more Silver focused in 2016.
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This news release in Feb 2016 was what really kicked off the fervor in Brixton back then:
BRIXTON METALS CLOSES ITS ACQUISITION OF THE PAST PRODUCER LANGIS SILVER MINE
February 2, 2016
“Brixton Metals Corporation (TSXV: BBB) is pleased to announce the completion of the purchase and sale agreement with Canagco Mining Corp. to acquire a 100% interest in the claims comprising the past-producing Langis silver mine). The project is located in the historic Cobalt silver mining camp of northeastern Ontario.”
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Then in March there was this update on their Langis Silver deposit:
Brixton Metals Provides Preliminary Model of the Langis Silver Project
March 2, 2016 – Brixton Metals Corporation (TSXV: BBB) announces that it has published additional data on the Langis Silver project located in Northeast Ontario through a short video.
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Then there was the investment by Rob McEwen making him the largest investor at that time which got folks more confident:
BRIXTON METALS CLOSES $1,023,300 FINANCING
April 11, 2016
“Mr. Robert McEwen (Evanachan Limited) and CMP 2016 Resource Limited Partnership have subscribed for 2,500,000 Units and 2,500,000 FT shares respectively. At closing (and after the share issuances described below are completed), Brixton will have 25,589,926 shares outstanding on an undiluted basis. Mr. McEwen becomes Brixton’s largest shareholder holding 13.7%, CMP holds 9.7%, Hecla Mining holds 8.8% and management and Directors collectively hold 15.8% of the Company.”
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Then in April of 2016, Brixton announced it had acquired yet another Silver project in picking up Hudson Bay:
BRIXTON METALS ACQUIRES THE PAST PRODUCER HUDSON BAY SILVER MINE
April 28, 2016
“Brixton Metals Corporation (TSXV: BBB) is pleased to announce that it has acquired 100% control over the past producing Hudson Bay silver mine in the Cobalt mining camp of Ontario. ”
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Then they did another $2 Million financing on May 10th to help fund the drilling of Langis and Thorn. After that they quickly turned around an agreement with the First Nations group, showing the good community acceptance of the project.
BRIXTON METALS AND TIMISKAMING FIRST NATION SIGN EXPLORATION AGREEMENT
May 10, 2016
“Brixton Metals Corporation (TSXV: BBB) is pleased to announce that it has entered into an Exploration Agreement dated May 2, 2016 with Timiskaming First Nation with respect to the Company’s Langis Silver project and other Cobalt lands. ”
https://brixtonmetals.com/category/2016/page/2/
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Almost the entire first half of the year in 2016, and miners were surging was about picking up Langis and then Hudson Bay, and that is what created the surging interest in Brixton, beyond what they had been doing with Thorn – mostly around gold.
So it’s a stretch to say it was always about Thorn. What investors liked in 2016 was picking up 2 new Silver/Cobalt properties, and that speculation is the lion’s share of why BBB surged in 2016. Now they’ve all but abandoned posting news on those properties after a number of solid drill campaigns on it because Silver & Cobalt pricing faded down hard in 2017 & 2018.
I’m glad they are going to drill on Hog Heaven this year, but they’d get more mileage out of it and Langis and Hudson Bay if they were in their own company, as most of the comments and investor interest in Brixton for the last 2 years has been back on their Gold/Copper exploration at Thorn, and their Gold exploration at Atlin.
On January 22, 2020 at 11:16 am,
Matthew says:
News always looks like a big deal when the whole sector is on the move. Had the cycle been down, I doubt very much that any of those press releases would have done much for the stock. Appearances aren’t always what they seem and way too many investors are too sure that they know the reasons behind everything the market does when in fact nothing could be further from the truth. This is why too many investors think the market is “wrong” much more than it really is. The fact is, the market was not wrong when it priced IPT at 11 cents or USA at 4 and half cents in early 2016 yet many were claiming that such juniors were cheap and “stupidly” priced. There’s way too much flippant talk among retail investors about value, but I digress.
On January 22, 2020 at 12:00 pm,
Excelsior says:
I agree that there are many forces moving the markets, but I invested in BBB back in 2016 specifically because of them picking up those 2 Silver properties with Cobalt credits, and the buzz in other investing chatrooms was about their Silver properties coming on board and that was what all the press releases from the company were about the first half of 2016. My only point is now their focus and the chatter from investors in Brixton has been mostly focused around their Gold/Copper exploration at Thorn, and their Gold exploration at Atlin. It will track PMs just fine, but I don’t believe most investors are rating it for the silver in the ground at Hog Heaven, even though that is valuable and will become more so in rising silver prices. Maybe the drilling there in 2019 will get more eyeballs on that silver property, but most of the focus the last 2 years has been Thorn & Atlin.
On January 22, 2020 at 12:11 pm,
Matthew says:
Brixton rose a large 4.7 times as much as SILJ following the May/June lows which is similar to the leverage it gave in 2016. Yes, most investors are not “rating it for the silver in the ground at Hog Heaven” but most investors don’t make the price. The big players do and they are very good at causing share prices that reflect reality (like IPT at .11 when silver was below $14).
On January 22, 2020 at 12:38 pm,
Excelsior says:
I sure hope the big players to factor in Hog Heaven’s Silver in the ground, and the silver in the ground at Langis and Hudson Bay, and then add to the Gold/Copper/some Silver at Thorn, and the Gold at Atlin, and then the shareprice will rerate much higher, because right now the big players are not valuing all 4 projects in the current shareprice – hence – inefficient markets.
On January 22, 2020 at 1:46 pm,
Matthew says:
There might be a case for a short term price-value mismatch here but it could also be that you’re making exactly the assumptions that I highlighted above. Are you sure you’ve discounted everything that goes into turning those projects into producing mines? Do you know what the company really has that isn’t contingent upon more drill holes or higher metals prices or local politics or even natural market cycles? There’s a reason most junior miners rely on gamblers and not banks for their financing and it has a lot to do with value that is subject to a host of “ifs.”
The company trades at 2 times book which is $17M excluding over $5M in cash. If it is worth more than that, how much more? If you can’t say, then you’re really guessing when you call it under-priced. Likewise, if you didn’t call it expensive when it hit $1.20 in 2016, what does it logically mean to call cheap, now? In my opinion, not much.
As a speculator, I’m a buyer because I think the odds are good that today’s price will be cheap someday soon, not because it is cheap today even if silver goes nowhere.
Investors buy what is true today. Speculators buy what might be true in the future. Virtually all of what Brixton has going for it is a bunch of possibilities.
On January 22, 2020 at 2:07 pm,
Excelsior says:
All explorers, and even the developers and producers are based on a large sea of “if” and potentials, and investors are speculating on the future, so that is true across the board. Book value for explorers is basically meaningless, since most of the value is in the perceived future value of what their deposits could be worth based on the exploration work done. and thus won’t be represented there. Book value is far more appropriate for more established producers or standard businesses that have sales, assets, machinery, and with miners clearly defined economic studies on the worth of the assets.
It is much more standard to compare Jr explorers to their peers that are digging up similar grades, in similar geology, at similar depths, but it is all very subjective until the deposits get a PEA, and preferrably a PFS, and then FS in place to quantify the economics. Even then there are plenty of examples that have popped up over the years where the value of the deposits were not properly accounted for in the share prices, and sometimes companies are trading below the cash value they hold, so no markets do not always have things priced correctly.
We’ve covered on here repeatedly how mismatched many arbitrage trades are for months at a time during takeovers, and the markets don’t reprice those until after the transaction closes, providing a present day valuation mismatch by Mr. Market. We’ve reviewed a number of times on here how wacky the current valuation is for GZZ just based on the arbitrage it has to RZZ’s royalty, not to mention all the other assets, NSRs, and strategic stakes it holds, and none of that had anything to do with book value.
Much of the drilling the Brixton has done is either not included in current resource estimates, or there aren’t even economic studies done on some of the properties yet, so it makes the whole valuation an aspect of projecting where things could go at both current metals prices and where the metal prices are heading, no “big players” or retail investors could peg all the criteria down that you listed, especially on a more speculative drill play like Brixton with so many unknowns. $1.20 was on the expensive side back in 2016(and it was back then and I trimmed the position way back into the highs, and have traded around my position for 4 years now buying dips and selling rips), then $.13 is cheap for a company with more projects and more drilling (albeit some more dilution) with more questions answered than where they were 4 years ago. Surely a more proper value is somewhere between those 2 extreme poles.
On January 22, 2020 at 3:02 pm,
Matthew says:
You misunderstand the “ifs.” Larger miners actually mine stuff and have bankable reserves, and profits and permits and a track record regarding both operations and community acceptance, and, and, and. The big banks/brokers don’t initiate analyst coverage of the Brixton types because there’s nothing to cover. Which is a big part of the reason that they move so wildly. There’s a lot of retail guys driving big swings because they think they understand value.
Book values don’t necessarily mean a lot in many cases but can be more useful than you think when comparing apples to apples.
If you did not believe that silver would go higher anytime soon, would you still call Brixton undervalued? I would not. The main value in such an environment would be its high grade gold holes which are a long way from being bankable assets. A stock can only be considered cheap based on what is true today, no matter how certain you might be about a rosier picture tomorrow.
On January 22, 2020 at 3:02 pm,
blazesb says:
Excelsior, yes, please Gary Thompson FOCUS! Pick a flagship property and stick to it.
I think in a recent post Bob Moriarty said he wasn’t really able to do justice to ore grades and implied values derived from the blizzard of information companies release. Hear hear. We all try but in the main must place our trust in the source of that information, the company.
By bouncing from property to property like a pinball Gary Thompson is jeopardizing that trust.
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