Short-term healthcare plays, long-term energy bets, and uncertain cannabis swings. Small-cap investors have had their hands full over the past few months keeping up with the markets, as the latest hot play has constantly been changing.
Yet through it all, long-term plays in more consistent sectors like metals and mining and industrials have quietly made their moves. While the market fundamentals strengthened around them, they were focused on delivering results that were in the making for a long time, and now we’re starting to see those results.
This week, we’re highlighting some of the recent discoveries, moves, and results that have driven share price increases and propelled stocks to the top of the Bullboards.
While other sectors have been more flashy over the last few months, metals and mining companies are starting to come back online and investors are taking notice. Buoyed by rising metals prices, companies like
Royal Nickel Corp. (
TSX:RNX,
Forum) fared well in April. Recently, RNX jumped back to the top of the sector’s Bullboards on even stronger performance, climbing from $0.415 on May 4 to a high of $0.54 on May 8.
What caused Royal Nickel’s latest ascent? Just before the peak on May 7, the company released its surprisingly strong
first quarter financial results, but the big news was confirmed on May 11 when RNX announced it was set to
acquire a high-grade gold project in Western Australia. Combined with a proposed name change to Karora Resources, the new project would sync well with the company’s nearby Higginsville Gold Operations, where it
eliminated outstanding NSR royalties in a cash deal on May 11.
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It’s a good setup for the future, something that the RNX Bullboard quickly noted. As last year’s most popular mining Bullboard, the company has many faithful investors that have been waiting to see how it capitalizes on its projects. For Stockhouse Members like
Geodan2, the moves from the soon-to-be-named Karora are proof that they’re not content to sit around.
“…In one day, they buy out a royalty from Morgan and buy a mine and a lot of land from another company in their mill area. Apparently that mine planned to use the HGO mill and with Karora now using it 100%, it dropped the value of Spargo to a fraction of what it had been. This is true of all the satellite deposits that Karora does not own, they are worth a lot more to Karora than to a third party that would have to build a mill to mine them. And Karora gets to buy them for about what others would pay…”
(Post: Dynamic Company because of management making things happen)
Hot on the heels of Royal Nickel last week were two impressive discoveries made by
Freegold Ventures Ltd. (
TSX:FVL,
Forum) and
Great Bear Resources Ltd. (
TSX-V:GBR,
Forum). The latter has been well-known to mining investors over the last year, but
further strong drill results released last week saw GBR shares rise from $10.09 on May 1 to $11.77 on May 5. The former, Freegold Ventures, is relatively brand new, but surged last week from $0.09 on May 1 to $0.34 on May 8,
an increase of more than 350%.
Looking at the company’s price chart, the dramatic price increase came with an increase in trading volume, from a few thousands to tens of millions. The big results?
Impressive assay results of 188 metres grading 3.69 g/t Au at the company’s primary Alaska project, and that’s with only partial results, as the drilling campaign was suspended at the
end of March on account of the pandemic.
After being relatively quiet until the results, the FVL Bullboard understandably saw a rush of activity. On paper, the company’s find is a perfect fit for the current market, open at depth, and has plenty of drilling to go. Some users were wary of the company following through with strong enough results to sustain the momentum, especially with a potential summer lull incoming. But others like Stockhouse Member
SuneeDaze pointed out that Freegold’s results already match up with the story, and will likely pick up where they left off.
“GSDL2001 provided one of the best intersections in some time, that being 188 m of 3.69 g/t gold including 2 m of 169.5 g/t. And as we know, the hole ended with an intersection of 20 m of 9.87 g/t gold, so the actual thickness of the zone is more than likely greater than the intersection reported.
You asked what I thought of their chances moving forward? There’s obviously immediate reasons for optimism for investors as follow up hole GSDL2002 had already intersected the zone (as per the nr) and was actually shut down in mineralization at much shallower depths (than hole 1). It’s also highly encouraging since a previously-drilled hole GSDL 1210 was drilled about 100 m southeast of hole 2 and intersected 21 m of 34.69 g/t gold…”
(Post: RE:SuneeDaze)
Big results weren’t limited to metals and mining last week, as the industrials Bullboards saw a winner as well in the form of
PyroGenesis Canada Inc. (
TSX-V:PYR,
Forum). Investors have kept their eyes on the high-tech plasma processing company for the last few months, as PYR outpaced the markets and rose in April, but a surge at the end of the month brought more to the party.
On Apr. 30, PYR shares leapt from $0.52 to $0.68, and have hovered closer to $0.70 since. The jump came from PyroGenesis announcing
first phase success in a multi-phase contract testing the efficacy of proprietary plasma torches for use in iron ore industrial furnaces. Through testing with a multi-billion-dollar international producer of iron ore pellets, the torches were found to have no detrimental effects in the process, significantly reduce greenhouse gas emissions compared with fossil fuel burners, and projected cost savings.
For the PYR Bullboard, it was the exact kind of news that investors had been awaiting. After the initial excitement passed, users began to debate the likelihood of further success, contracts being signed or falling through, and the potential for competition to step in. But as Stockhouse Member
Nosleep highlighted, PyroGenesis is on track for all the success it needs to get the ball rolling:
“...If, after that last news release where one company is already in the works with early planning and testing, and phase 1 has been a success, and we have had multiple other companies COME TO US and ask for the same planning to get started up, you don't believe we won't get a single contract for one facility out of it, you might as well leave the board…
Even ONE single contract for 50 torches is enormous, that's the most laughable part of it all. People on the board have a right to question 10 plants at $1.5 billion, but 1 plant, or 2 to start with… truly not unbelievable... It's company changing for us.”
(Post: the funniest thing here...)
With impressive results in some sectors, and constant swing in others, it’s safe for investors to continue being wary of the current state of the markets. As the world has started to move towards easing COVID-19 restrictions, we’ve recently polled our Stockhouse investor audience on whether they feel that the markets, and in larger part the economy, are on their way towards normalcy. Though more have recently voiced their opinion that now is the perfect time for serious investments, the majority remains wary of the markets in general.
In fact, the only
certainty over the last few months has been the completely-expected rise of the healthcare sector as an investor focus. On Stockhouse, the most-viewed Bullboards have consistently been in healthcare, with the majority related to coronavirus development.
That’s why our latest poll asks investors what they’re most interested in when it comes to healthcare investments right now. Is it purely a short-term pandemic play, or is there more long-term focus than meets the eye? Make sure to head over to
Stockhouse homepage or click the image below to cast your vote!
(Click image to go to the poll)
Next week is a shorter trading week in Canada, but global markets and news will continue in earnest. Every action or event can have a cascading effect on the rest of the markets, so it’s important for investors to keep their eyes on the trading pulse. The best way to stay up-to-date on the latest small-cap movements? The weekly Buzz on the Bullboards. For previous editions:
click here.
FULL DISCLOSURE: PyroGenesis Canada Inc. is a client of Stockhouse Publishing.