Falcon Gold Corp. (TSX: V.FG, Forum) is a diversified junior exploration company, with a portfolio of properties spread across the Americas. As its name implies, FG had an original operational focus on gold mining assets. However, with the chronic under-pricing of gold in recent years, it’s been very difficult for junior mining companies to advance these projects.
Recognizing market conditions, the management team of Falcon Gold has been busy diversifying its holdings across a number of metals markets beyond gold. In 2018 alone; the Company has added a copper/gold/cobalt property (NW Ontario), additional cobalt claims (NW Ontario), and a gold/silver/copper property (Argentina).
Now FG has added an additional property to this portfolio of assets. On September 5, 2018; Falcon Gold announced the acquisition of the Coomer Lake Vanadium claims. This includes 9 vanadium/titanium claims in the James Bay district of northern Ontario, more specifically in the Porcupine Mining Division. The total size of this land package is 144 hectares.
Falcon Gold’s CEO, Stephen Wilkinson, shared these thoughts on this news:
"The Coomer Lake property represents an excellent opportunity for Falcon to add a potentially high-value asset to its growing international project portfolio. The high-grade vanadium and titanium mineralization is hosted within a geologically significant intrusive unit that has been traced with airborne geophysics for several kilometers but has not been drilled beyond the historical discovery hole."
Why should mining investors care about this news? Two reasons. Reason #1 is the vanadium market itself. The price of vanadium has more than quintupled since the beginning of 2016, going from below US$3/lb to well over US$15/lb. Yet as a rare base metal, there are not a lot of investment opportunities associated with this market.
Equally, current vanadium production is highly concentrated in three jurisdictions: China, Russia, and South Africa. Because of geopolitical tensions and socioeconomic issues (South Africa), it’s highly desirable for end users to find additional supply sources of this valuable metal.
Why is the price of vanadium exploding? It’s all part of the global Power Revolution. One icon who is particularly passionate about this Revolution (and vanadium’s role) is noted mining/investment guru, Robert Friedland. In a wide-ranging 2017 interview with Northern Miner, Friedland was succinct in summarizing the opportunity here.
“We think there’s a revolution coming in vanadium redox flow batteries. You’ll have to get into the mining business and produce ultra-pure vanadium electrolyte for those batteries on a massive scale.”
- Robert Friedland, April 24, 2017
Vanadium’s role in this revolution is energy storage. Its unique metallurgical properties make it an ideal component in the most advanced energy storage cells. Energy storage is becoming an increasingly important component of the Power Revolution, complimenting both the renewable energy sector and the EV/lithium-ion battery market.
An increasingly important metal. Limited opportunities to play the market. Enter Falcon Gold.
As mining investors know, valuations for many mining juniors are extremely compressed. The flip-side to this equation is that a relatively small quantity of investor dollars goes a long way in acquiring a position. With a current market cap (as of this writing) of approximately $1 million, FG is an inexpensive way to enter this sector.
Meanwhile, the Company’s other mining assets offer additional upside potential. Rivalling vanadium as today’s hottest metal is cobalt – and Northern Ontario is recognized as one of the most prospective locations for cobalt mineralization outside of the massive cobalt production from the troubled Democratic Republic of Congo.
For contrarian investors, FG’s gold assets also remain an attractive component of the Company’s portfolio of assets. The price of gold remains depressed. However, with the price of gold well below the full costs of gold production and mine production now falling (as a result), many analysts continue to believe a turnaround is imminent here.
For investors looking more closely at the Coomer Lake Property, historic work has already taken place, including a (non 43-101 compliant) 2007 drilling intercept of 0.75% of V2O5 (vanadium pentoxide) and 7.56% TiO2 (titanium dioxide). While the price of titanium hasn’t matched the explosive surge of vanadium, titanium prices are also strong – as indicated by a chart of the price ratio of the two metals.
[chart courtesy of InfoMine.com]
Valuations for most mining companies remain low, while many metals markets are showing extraordinary strength. This disconnect between valuations spells opportunity for mining investors.
Falcon Gold provides exposure to several of these hot markets (along with precious metals) – at a micro-cap price. Buy low; sell high.
www.falcongold.ca
FULL DISCLOSURE: Falcon Gold Corp is a paid client of Stockhouse Publishing.