The argument for why this Canadian explorer warrants a look is made in a BMO Capital report.
In an April 23 research note, analyst Andrew Mikitchook reported that BMO Capital Markets initiated coverage on Probe Metals Inc. (PRB:TSX.V) with an Outperform rating "to reflect expected upside" and a CA$2 per share target price. The company's stock is currently trading at around CA$0.94 per share.
Mikitchook reviewed Probe Metals' advantages.
Its flagship project, Val d'Or East, located in Quebec's Abitibi gold mining district, is "one of the higher-quality Canadian gold exploration properties with prospectivity for resource growth and the potential to transition toward a development-stage project," he described. The project's current mineral resource is 1.4 million ounces (1.4 Moz).
Probe Metals has a strong management team, Mikitchook highlighted, with a "notable track record" of exploration success and shareholder value creation along with decades of experience. For one, the team garnered $25 million in financing for the company, which should cover it through 2020.
Also, the people on Probe Metals' management and exploration teams are the same ones who navigated Probe Mines through two major mineral discoveries and the sale of the company to Goldcorp in 2015 for CA$526 million. During the takeover, Probe Metals was spun out, and Newmont Goldcorp today holds a 14% interest in it.
Val d'Or East has exploration upside, for one, in the parallel trends to the west of Pascalis, like the Courvan Trend where encountered intercepts were comparable to those of Pascalis, Mikitchook pointed out. Pascalis and Courvan remain open along strike and show potential to the north and south. Also, another mineralized trend could exist between Pascalis and Courvan, in the underexplored New Beliveau area. "We are including 0.75 Moz of potential upside in our valuation," he added.
Catalysts throughout 2019 will be results from drilling the new Courvan Trend, including the Southwest and Creek zones, and drilling New Beliveau, seeking new parallel trends, indicated Mikitchook. The major catalyst expected this year, though, is a Val d'Or East resource update in H2/19, which will include expansion of the Pascalis resources and the new Courvan Trend discoveries.
"Probe's Val d'Or East project is on a trajectory to be the next exploration success in the Val d'Or area," Mikitchook concluded. In addition, it has the "prospectivity, jurisdiction and management team to potentially attract acquisition interest as it is advanced."
Disclosure:
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
4) The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article until three business days after the publication of the interview or article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases. As of the date of this article, officers and/or employees of Streetwise Reports (including members of their household) own securities of Newmont Goldcorp, a company mentioned in this article.
Disclosures from BMO Capital Markets, Probe Metals, April 23, 2019
IMPORTANT DISCLOSURES
Analyst's Certification
I, Andrew Mikitchook, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
Company Specific Disclosures
Disclosure 2: BMO Capital Markets has provided investment banking services with respect to Probe Metals within the past 12 months.
Disclosure 3: BMO Capital Markets has managed or co-managed a public offering of securities with respect to Probe Metals within the past 12 months.
Disclosure 4: BMO Capital Markets or an affiliate has received compensation for investment banking services from Probe Metals within the past 12 months.
Disclosure 6A: Probe Metals is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO Capital Markets Limited or an affiliate within the past 12 months: A) Investment Banking Services
Disclosure 18: A redacted draft of this report was previously shown to Probe Metals (for fact checking purposes) and changes were made to the report before publication.
For Important Disclosures on the stocks discussed in this report, please click here.