CMC Metals (CMB:TSX Venture Exchange) is an emerging Canadian junior mining company, which we believe is on the verge of a major upward move in the short term.
CMC’s strategy is to acquire and develop past producing mines, rehabilitate and put them back in production, thus generating dilution-free cash flow for shareholders.
The company currently has two advanced projects in it’s portfolio – The Radcliff mine in Southeastern California, and the Silver Hart mine in the Yukon, near B.C.’s border. Both mines come with similar fundamentals, in that they were both highly profitable during the time they were active. The mines were shut down decades ago due to extremely low gold and silver prices, and have since been abandoned.
With the recent major resurgence in precious metals prices, Radcliff and Silver Hart are once again looking like attractive opportunities for a savvy management team to develop and exploit.
If you have been paying attention to the resource sector, particularly gold and silver exploration and mining companies, you will have noticed hundreds of companies have seen their share prices surge 100%, 200% and up to 1000% in many cases.
We are very interested in CMC Metals as it has been largely overlooked by the investment community, and major upside still remains.
Early this year the company started a restructuring process, positioning itself for success. It rolled its shares back 7 for 1 in February, then completed a $1,550,000 private placement at 0.10/share in June. 30% of the financing was subscribed for by insiders, thus revealing their confidence in the direction in which the company is headed.
Following the financing, management was quick to move forward with rehabilitation of both mines, while also working diligently on putting their 100% owned Bishop Mill (close to the Radcliff mine) into operation.
Over the past few years, CMC has been able to realize approximately $1 million in revenue by processing stockpiled ore from past operations. Fast forward to today, with the recent restructuring, financing and progress on both mines, as well as Bishop Mill, we foresee a rare opportunity for investors to ride the wave of success as CMC moves toward realizing positive cash flow from all operations.
CMC’s initial intentions are to “high grade” the mines; that is, process the highest grade ore first and use part of the proceeds to expand the resource, thus increase valuation significantly, on both projects – while keeping share dilution to a minimum.
We urge all potential investors to further their research through the company’s website.
“I’m the second-most-famous person in Vancouver BC – after Raymond Rich. That’s like being the second-most-famous person from Bethlehem. No one cares about Steve of Bethlehem.”
Disclosure: The author of this report holds shares in CMB, which were purchased in the open market between September 26 and October 3rd. I may buy and sell these shares as fundamenals dictate.