Earlier this month copper & nickel hit all-time highs and gold came within 1% of an ATH. Goldman Sachs increased its 3 & 6 month gold targets to $2,350 & $2,500/oz.
Still, many metals/mining juniors are well below their 52-week highs. That could change at any time. In commodity bull markets, investors can protect against inflation and outperform the major stock indexes by taking on incremental risk.
Early on in the bull market, the largest companies will shine. We’re already seeing that in the shares of companies like Barrick, Newmont & Gold Fields, up an average of +60% from their respective lows.
Of course, there’s so much more than precious metals in the natural resources space. A company that has exposure to multiple commodities, all in a stable country like Canada, would be ideal.
Marvel Discovery Corp. [TSX-V: MARV] / [OTCQB: MARVF] has to be the fastest-growing gold junior in Newfoundland. It has amassed a portfolio of properties totaling > 120k hectares (incl. its share of a JV with sister company Falcon Gold). For its Newfoundland portfolio alone Marvel should be valued at C$15-$20M, but the Company has a lot more than just Newfoundland.
CEO Karim Rayani recently brought in a new uranium asset located just south of the world-famous Athabasca basin. This project has historical drilling on it with evidence of high-grade mineralization. Rayani points out that the option on the Highway North project was struck three years ago when uranium was out of favor.
In the chart below one can see that the valuation [C$37/hectare] in the market of Marvel’s Newfoundland-only gold portfolio is the lowest of any company on the Island. Note, these valuations are only for each company’s properties in Newfoundland, I ascribe 50% of Marvel’s Enterprise Value to NF.
Marvel has a number of gold properties that could be company-makers, both in Newfoundland & Ontario. It has investments in REEs, copper, nickel & PGMs.
Earlier this week I had the opportunity to speak with CEO Karim Rayani about the future of Marvel Discovery Corp. He had important things to say about the company and the outlook for commodities. Please continue reading to learn more.
Including a 50%/50% JV with sister company Falcon Gold, Marvel Discovery owns or controls, at very low cost, and with non-onerous terms — ~120,800 hectares of gold claims in Newfoundland. That makes it (I believe) the 6th largest gold claims holder on the Island. What are your plans for all of that property?
Yes, good question. We’ve been receiving immense interest in our project portfolio from a few of the more prominent Newfoundland players, because our properties are tied onto several main structures. With so much drilling going on around us (100’s of thousands of meters per year), we benefit from the successes of our neighbors.
However, we’re reluctant to sell or JV any properties until we unlock more data. We’ve done a lot of work, systematically getting things organized, but we’re in no rush. We own or control (mostly own) 100% of our properties with no NSRs and no onerous work commitments.
People often ask why we haven’t started drilling… In order to maximize our chances of success, we must better understand our projects’ geology & structure. Extensive airborne surveys have returned strong results. Geophysical reports that we’ve done largely validate our geological modeling.
We’re looking at mobilizing as quickly as possible, probably at our Hope Brook JV project first.
Despite the size of Marvel’s Newfoundland gold portfolio, it seems as if the market is ignoring the blue-sky discovery potential. Why might that be? What will it take to capture the market’s attention?
To be frank, most gold juniors have not moved much this year — but that’s where the opportunity is — we believe juniors like Marvel Discovery have room to run. The Majors always see the first increase then it flows down from them. We expect to see a wave of M&A that will increase valuations across the board.
The last time gold juniors had a big move, Newfoundland-focused names including New Found Gold, Sokoman Minerals & Labrador Gold were among the leaders. Given our land package, the next time those companies rally, we should as well.
Can you give readers an update on Black Fly, an Ontario gold project that’s contiguous to a 5M ounce Agnico Eagle project? The last I heard was that a half-meter intercept grading 50.6 g/t gold was reported in Phase 1 drilling.
Yes, we hit some very good mineralization with visible gold and identified high-grade targets for our second round of drilling. And, readers should note that the blockbuster half-meter 50.6 g/t gold intercept was found at just 39.5 m depth.
We will circle back to the next phase when we’re able. Our current focus is on Newfoundland due to the high-grade gold potential there, and on our recent uranium acquisition.
How important is Marvel’s newly obtained Highway North Uranium project just south of the world-famous Athabasca basin?
Very Important. Highway North has the makings of a first-class discovery, a possible company-maker. It has power, water & road accessibility. The 2,573-hectare property is 70 km southwest of the past-producing Key Lake mine, which had an average grade of 2.1% U3O8.
Twenty-one holes totaling 3,527 m were drilled between 1980 and 2008. Surface exploration & drilling verified the presence of mineralization up to 2.31% U3O8 over 0.29 m.
We believe this property is one of the last sizable contiguous blocks available in the area. The option to acquire Highway North was negotiated three years ago when interest in uranium was very low. We hit 2.31% uranium in shallow drilling, this has never been drilled at depth.
We’re in the process of obtaining drill permits now.
Are you moving towards a prospect generator or incubator model? Does the market appreciate that business model?
Longer-term we could see something like this happen, we’re growing very fast. In order to keep dilution to a minimum while targeting our projects for success, we must look outside the box.
I would say not so much a project generator, more as an incubator where we can offer share dividends to stakeholders. We are already starting to see some success here with Power-One Resources, our first share dividend payout.
Karim, thank you as always for your time and valuable insights. With commodities looking to be the #1 investment story of 2022, Marvel Discovery Corp. could have quite a year.
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