Royalties Inc C.RI

Two Valuable Copper Assets For Dirt Cheap Stock Under $0.25

[blackgold14]

With the price of copper nearly doubling in the last 12 months to a 9 year high, it's important to highlight that XAG is not just a silver stock but has two valuable copper assets. 

1.  Bilbao Project

According to the PEA on the Bilbao project, as disclosed on April 28, 2014, the main Bilbao deposit has an indicated and inferred resource of 10.6 million tonnes.  The calculation of the mineable resource had grades of 2.10% zinc, 1.40% lead and 63.96 grams per tonne silver.   What is noteworthy is that the copper element of the resource was not figured into the calcultion of the mineable resource even though the price of copper in the spring of 2014 was around US$3 per pound.  This copper element of the resource was significant then and even more significant today because copper is now trading at over US$4 per pound.  The average grade attached to the copper element of the indicated and inferred resource of 10.6 million tonnes was 0.17%.  With the exploration work subsequent to the 2014 PEA and the current round of drilling on the satellite deposits, it's a safe bet that the current mineable resource can be estimated to be at least equal to the global resource estimate of 10.6 million tonnes.  I think I am being ultra conservative here.  Assuming a mineable resource of 10.6 million tonnes, an average copper grade of 0.17%, a recovery rate of 70% (this again I believe is very conservative), the Bilbao project currently has recoverable copper of 40 million pounds of copper (10.634 million tonnes  x  0.17% per tonne  x  2,200 pounds per tonne).  The value of this copper at the current coper price of US$4.17 per pound and the US $1.00 = CAD $ 1.26 exchange rate is over CAD $210 million.   XAG currently has 163 million shares outstanding.  The value of the recoverable copper resource today is CAD $1.29 per share.   

2.  2% NSR on Portree Claims of Cozamin Mine

The company acquired a 2% NSR on the Portree Claims associated with the expansion of the Cozamin Mine operated by Capstone Mining (CS on the TSX).  The shareholders of Capstone have enjoyed a ten fold increase in the price of their stock ( a year ago it was trading around 35 cents, now it's over $3.50), but Xtierra shareholders have not benefited yet.  This royalty, which is being challenged, is or will be generating millions in cash flow to the rightful owner especially since the price of copper has nearly doubled in a year and is expected to move considerably higher in the next few years.  The Cozamin Mine not only recovers copper, but also silver, ;ead and zinc.   


Well there you have it.  XAG has substantial copper exposure.  The market is out to lunch on this stock.  It should be trading much higher based on just what it is in the ground.  Forget the royalty angle and the silver/zinc side.  The reoverable copper alone at the Bilbao project and the real possibility of massive cash flow from the NSR on the Portree/Cozamin Mine justifies a much higher XAG stock price.

[LatAmBull]

Thank you very for the back of the envelope math on the Copper value - I've believed that was being discounted by investors, but should be a catalyst for incremental value in the future.