What New/Prospective Spearment SPMT Investors Should Know.
The Spearment Resources web site is vague in its mission statement. The company asserts that it is aggressively perusing world class mineral deposits. To what end is the question? In my opinion, the most successful closeology companies don't just generate excitement and hype about proximity another's successful claim, they identify promising targets, drill, and prove up a resource. This is what all resource companies should be doing, in my opinion.
What am I talking about? Spearment has multiple claims beside successful projects. Unfortunately, they have done little in the way of proving a resource. Yes, they do have several active exploration efforts under way. But it seems little in the way of results have come from them so far. And these work projects appear to be focused on collecting soil samples, sediments in streams, rock outcrops and various surface level geology. Very preliminary stuff.
I think the main focus of the company has been on acquiring mineral rights adjacent to successful projects and promotion. A classic closeology play. My concern is that the $700 000 dollars they raised earlier in the year will not allow them much in the way of moving from closeology towards proving up any resource. At least not unless they raise more capital on the market through dilution.
Another issue I have with SPMT.v is the lack of past success of this management team. The players in this company are also in CRUZ.v and, to a certain extent, share resources with SIE.v. All three are in the same office space. Several company officers work at each other company. I won't get into specifics here, but I don't like that. All three of these companies are trading under 0.08 cents and had little in the way of financial success. Why is that? At the very least SPMT officers must be distracted, as they can't dedicate themselves to only one company to any measurable extent.
SPMT has a paltry market capital of 11.4 million and 185 million shares. The company is in a state of going concern. Meaning, they could become insolvent. 700 000 K does not last long when you are paying for mineral claims, marketing, exploration work and keeping the lights on. Since they have no revenue to speak of they must raise capital in the market and dilute shareholders. That problem can go away, however, if they actually prove up a gold and silver resource on one more properties.
Lithium is of no interest to me. SPMT is drilling up some in Clayton valley. I don't think this is prudent, because lithium is in oversupply and the price has been falling. A few years from now and the picture might be different. But the negative trend is well established right now. While gold and silver are in a bull market. Thats where I'd be and am, in fact.
Finding gold and silver is no easy task. But when you do the results can be explosive. When looking at a mining/exploration company I scrutinize the past activities of management. After all past success is often an indicator of future success. Moreover, I think it's important to consider how many shares are outstanding, the market capital of the company, how much money they have to explore; do they need to issue more shares to raise capital? I also love it when a prospective company has high insider ownership. To me, that means the team will work hard, as they make money in a mutual sort of success.
It's important to think about the geology of the surrounding area. When it comes to proxmity plays, like SPMT, you have to ask what is known about the stuff in the ground where they are. In some cases you can find lots of information in the public geographical/geological record and in the adjoining companies research. Often enough, the proximate company already looked at the area and decided it wasn't worth claiming.
Here are two examples of companies that proved they had gold and silver in the ground. Stock price in both cases went up considerably. Neither are proximity plays. Rather, they are companies that looked at an area with great consideration, got permits, identified prospective drill targets, and then drilled.
(1) VGLD, a company I invested in a few months ago, recently acquired a defunct mine in Mexico. To boot the company is well funded. They have performed some early drilling and have purchased an underground drill to further explore old areas of the mine. Initial assay results reveal that there is high grade silver in areas of the mine. The company intends to drill and prove up more silver and gold once they acquire the new drill in November. Management has a good reputation and insider ownership is high. The stock price went from 0.05 in April to 0.31 in October of this year. That's a 500% increase.
(2) WHN, a company I invested in while back. I missed the huge gains on this one when they hit high gold results during a drilling campaign. The company went from 0.10 to over a dollar. A 1000% stock price increase. Not bad. But I bought this one in the 0.50 to 0.70 range over a year and half. My friends bought in at 0.1. Why? Because management has a great reputation. And they are well funded.
SPMT has a small claim close to the WHN. The SPMT claim appears to be outside of the spences bridge gold belt; if you look closely at the available maps. SPMT did a work program, which appears to be grab samples and gathering some sediments from a stream on its hammernose property, but no results have been revealed as of yet. These results were supposed to be available after 8 weeks. But we have been waiting much longer for that. I don't like that. Makes me think they didn't find anything worth sharing with the market.
For those of you that actually bothered to read what I've said here. SPMT is presently a proximity play. The real money is in moving away from being just that into a gold or silver . In my opinion, this is what this management team must do. Identify targets, raise capital and drill. If they hit gold and silver then you have something. Otherwise, this company is going no place anytime soon.
Here is a handy resource to think about:
https://www.visualcapitalist.com/common-mistakes-mining-stocks-team/