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KRO Blog Overview
The KRO Blog is where unrestricted content of a time sensitive nature is posted. It includes the Kaiser Media Watch Blog which features content involving John Kaiser produced by third parties such as the Discovery Watch series by HoweStreet.com, interviews by outfits such as Investing News Network, SDLRC related commentary, the KRO Monthly Summaries, and just about anything else John writes that is not intended exclusively for the fee based KRO Membership.


Posted: May 12, 2021JK: Discovery Watch May 12, 2021 with Jim Goddard and John Kaiser
Published: May 12, 2021HSC: Discovery Watch May 12, 2021: Why is Sonoro Gold Perking Up?
Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.

Discovery Watch Audio Links
Sonoro Gold Corp (SGO-V)





Cerro Caliche Mexico - Other 4-Infill & Metallurgy Au Ag May 12, 2021 - 0:00:01

Sonoro Gold's Cerro Caliche gold project in Mexico was the subject of a new Outcome Visualization created on May 10, 2021 to illustrate the potential size of the prize if ultimately Sonoro delivers an open-pittable heap leachable resource of 75 million tonnes that can support a 14 year mine life at 15,000 tpd. The company's plan is to deliver a PEA by the end of July 2021 with a 25-35 million tonne resource sufficient to support 5-6 years of production from the two central trend zones. Sonoro plans to deliver additional tonnage to extend the mine life by using cash flow to delineate the two flanking mineralized trends. The graphic above shows the fair spec value channel (blue) for the project in CAD NPV terms at the various stages of the exploration-development cycle, while the graphic below represents the NPV on a per share basis using 166.5 million fully diluted shares. The blue star represents the $37 million value the market was assigning to Cerro Caliche at the $0.23 stock price on May 10. Under terms of the DCF model which uses LOM averages for the key parameters, the future outcome value was CAD $338.2 million or $2.03 per share. That is not the price Sonoro should be trading at today because at the infill-metallurgy stage ahead of a PEA the certainty of such an outcome is only 5%-10% or $0.10-$0.20 under the rational speculation model. But once a PEA is delivered, the certainty range jumps to 10%-25% or $0.20-$0.51 if the PEA delivers a similar outcome. Sonoro then becomes very interesting because management plans to skip the next 2 stages of feasibility demonstration (PFS and FS) by securing mine approval and construction financing before the end of 2021 and be in production at 50,000-75,000 oz gold per year by H2 of 2022. Once construction is underway the valuation would jump into the 75%-100% range of the target outcome or $1.52-$2.03 per share. The OV link above is unrestricted and dynamic in the sense that the outcome valuation updates every night based on the price of gold and CAD:USD exchange rate. It includes a link to a KRO members only detailed version of the OV. Tracker May 11, 2021 explains the reasoning behind the OV and will become unrestricted on May 19, 2021.
InZinc Mining Ltd (IZN-V)





West Desert United States - Utah 6-Prefeasibility Zn Cu Fe In Au Ag May 12, 2021 - 0:16:52

InZinc Mining Ltd has proven to be a disastrous KRO recommendation and Discovery Watch story because management shifted its attention from the advanced West Desert project in Utah to the early stage Indy zinc-lead project in central British Columbia optioned in late 2016 on stiff terms from insider Kerry Curtis, the CEO at the time. Although InZinc made the Indy cash and stock payments due to Curtis on January 31, 2021, it did not disclose an amendment of the deal to extend the January 31 deadline for spending another $350,000 on the project, so, assuming management is competent, we can conclude that the Indy deal is now in technical default and only with the graciousness of Curtis will the deal be kept alive. The Indy deal is merely pathetic; what is obnoxious is the plan to sell West Desert to a private Australian group for about $6 million in staged payments over 2 years. The current CEO Wayne Hubert is abandoning ship, but will probably cast his portion of the 22 million shares owned by the 4 board members in favor of this giveaway on which InZinc has spent $7 million since 2006, including $1.6 million of a $3.5 million financing Hubert raised at $0.10 in late 2017. This requires shareholder approval at the AGM meeting on May 27 with votes due by May 25. The deal is an unfathomable giveaway because based on the 2014 PEA assumptions West Desert at today's metal prices is worth USD $569-$881 million at 10%-5% discount rates. The graphics above and below show how the value of West Desert behaves at different zinc prices. Tracker May 13, 2021 explains why if you are an InZinc shareholder you should be very pissed off and vote against this deal. And then be ready to support a dissident shareholder proxy battle to get rid of the current board. The Tracker is unrestricted. I downgraded InZinc to No Spec Value at the end of 2020 when I saw the LOI news but I am still a shareholder and a believer in West Desert's value potential. I am not happy that InZinc has turned itself into a charity for the benefit of an Australian group whose own ASX-listed company which spent the past decade mostly below $0.20 while it bloated its issued to a half billion shares.
NioBay Metals Inc (NBY-V)





James Bay Canada - Ontario 6-Prefeasibility Nb May 12, 2021 - 0:25:26

NioBay Metals Inc is seriously undervalued based on the 2020 PEA for a 6,000 tpd open pit scenario for its James Bay niobium project because the market does not know how to value a niobium project and is worried that the Moose Cree First Nation will never in the long run support development of a niobium mine in its backyard. An Outcome Visualization based on the PEA parameters illustrates how to value NioBay if you believe that the MCFN will want to support a mine whose output is part of the clean energy solution to climate change and which would be a source of productive jobs. The town of Moosonee is at the edge of Hudson's Bay with an elevation of 9 metres and will disappear if sea levels rise due to melting of the polar ice caps. The area is not called the James Bay Lowlands for nothing. The graphics above and below, unlike the OV graphics, are generated by a spreadsheet based DCF model that emulates the PEA's parameters including the ore schedule. Unlike zinc or gold there is no optionality bet on the price of niobium which is set by CBMM, operator of the Araxa Mine in Brazil which supplies 80% of global niobium supply and which is so big it can accommodate any demand growth from new technologies such as a lithium ion battery that uses niobium in the anode. The world, however, wants some diversity of supply, especially given the rising instability created by Brazil's Tropical Trump. So NioBay developing James Bay helps rather than harms CBMM's interest. This DW segment is also about a couple carbonatite targets in Quebec NioBay scooped this week called Gouin East and West. These large targets have never been drilled and confirmed as carbonatites, so of course their niobium potential is unknown. NioBay tried to option these claims in late 2019 but was outbid by Peter Smith's Fancamp Exploration. Fortunately for NioBay Ashwath Mehra and Mark Billings of Argex fame who works out of Pierre Gauthier's Auxico office took control of Fancamp, dropped the Gouin option, and are now trying to convert their 1.6 million share equity stake into a substantially larger stake by merging with another junior in which they are hung with a much bigger stake called ScoZinc which owns a failed zinc mine in Nova Scotia with a small zinc deposit. What they are really after is Fancamp's treasury which is now about $30 million thanks to the explosion of iron ore prices and Champion Iron's stock. They are doing it without shareholder approval, disenfranchising the rest of the owners of the 160 million Fancamp shares, including the 20.4 million held by James Hunter of Saskatoon who is now acting in concert with Peter Smith and Mark Fekete to replace the current Fancamp board headed by Ashwath Mehra who will receive a $40 million payday thanks to Newmont's buyout of GT Gold from which other minority dissident shareholders including Carson Block of Muddy Waters were trying to oust him and his pals. The Mehra group has refused to hold a Fancamp AGM because they know they will get kicked out as soon as shareholders have a chance to vote. Their excuse has been covid, but only the absolutely worst TSXV juniors have failed to hold a virtual AGM. They have now launched a smear campaign against 84 year old Peter Smith who founded Fancamp in the early nineties and has had to inflict only a 2:1 rollback on shareholders. The TSXV has approved the plan of arrangement conditional on Fancamp holding the AGM which is now scheduled for June 29, 2021 and the day of record is May 28. Smith and Hunter have engaged Gryphon Advisors Inc to run a dissident shareholder proxy battle. If the dissident group wins they will cancel the ScoZinc acquisition and Peter Smith will finally let his company be run by a team headed by Mark Fekete. Fancamp is a prospect generator type junior; it is not supposed to be a garbage can for deals that a sophisticated investment banker like Mehra cannot convince anybody to bankroll or bid to a higher valuation. This is a treasury raid using an "asset" of no interest to the sort of shareholders Fancamp has accumulated over the decades. Fancamp has a portfolio of numerous prospects in eastern Canada assembled by Peter Smith which needs to be properly catalogued and managed for farmout deals in the manner that Jack Stoch has done for Globex. And the Champion Iron stock position should be liquidated to cash up Fancamp so that it can test on a 100% basis its best prospects.
Disclosure: JK owns InZinc and NioBay; Sonoro Gold is a Fair Spec Value rated Favorite, NioBay is a Good Spec Value rated Favorite; InZinc is rated No Spec Value

Posted: May 5, 2021JK: Discovery Watch May 5, 2021 with Jim Goddard and John Kaiser
Published: May 5, 2021HSC: Discovery Watch May 5, 2021: Two Key Scandium Patents
Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.

Discovery Watch Audio Links
Scandium Intl Mining Corp (SCY-T)





Nyngan Australia - New South Wales 8-Construction Sc May 5, 2021 - 0:00:01
Scandium International has not put out a press release since September 24, 2020, and has not made any announcements about its quest for a critical metals recovery hosting site among the dozen or so copper oxide producers in the United States since announcing it on May 13, 2020. The company has not updated its corporate presentation since March 2020 which continues to be available on the web site and misleadingly indicates that the focus of the company is still the pursuit of scandium offtake orders through LOI arrangements with potential end users. The company failed to use the Q1 2021 window of excitement for critical metal and ESG linked stories to finance beyond the exercise of $273,325 worth of options between $0.065-$0.13 by some insiders while the stock was above $0.30 (the others let their $0.13 options expire). On April 27, 2021 the US Patent Office granted two very important patents. The first, filed for on January 16, 2018, is for Scandium master alloy production, a method invented by the late Nigel Ricketts for the more efficient making of Al-Sc master alloy. The second, filed for on November 21, 2018, is for the Extraction of scandium values from copper leach solutions, a method invented by Willem Duyvesteyn for using ion exchange to recover scandium from the raffinates generated by copper oxide leaching mines. The method allows the recovery of additional critical metals that are dissolved by the leaching and which are sent back into the heap leach pile unrecovered. These two patents are very important to SCY. If SCY gets a hosting deal, it will be able to secure a domestic supply of scandium from which it can make Al-Sc master alloy to supply potential offtake partners without relying on an intermediary. The combination solves the chicken-egg problem with regard to funding the construction of a primary scandium mine such as Nyngan which SCY owns and for which it has a mining lease. Its DFS capacity is 35 tpa scandium oxide but it could easily be scaled to 100 tpa. Assuming that Rio Tinto is successful in developing offtake demand for scandium, it will be a natural bidder for SCY so that it can build Nyngan and boost its own scandium supply beyond the 50 tpa limit from its Sorel-Tracy operation. Based on the Nyngan asset alone SCY should be trading in the $0.50-$0.70 range while we wait for Rio Tinto to make an offer. But that assumes SCY will fail in developing its own offtake market to justify building Nyngan, and fail to get a decent CMR hosting deal with the likes of Freeport. But these two patent grants significantly enhance the company's negotiating power with regard to both Freeport and Rio Tinto which is developing its own incremental supply of scandium from the Lac Tio ore processed at its Sorel Tracy facility in Quebec. These two patent grants deserve a news release. Instead on May 3, 2021 the company granted new options at $0.18 to insiders after letting half the $0.13 options expire in February 2021. Given the paucity of news and a complete unwillingness to communicate with the 55% minority shareholders who do not qualify as insiders, it no longer appears that management is acting on behalf of all shareholders. There are only certain agenda consistent with a management practice that fosters a lower rather than higher stock price and they are all harmful to the interests of minority shareholders. If no such agenda exists, a management shakeup is needed to bring on board somebody who understands that SCY is a startup where perception and communication matter. SCY's financial condition is such that it fails the TSX's continued listing requirements and it is just a matter of time before the TSX initiates a delisting review. The AGM is June 3. We can't change anything at this rubber stamp event unless Scandium Investments LLC, the largest shareholder of SCY owned by members of the Evensen family, takes a public stand. But we can make a lot of protest noise leading up to the AGM. And nothing seems to annoy the CEO more than the stock going up without his permission. Rio Tinto doesn't need scandium recovery from Freeport's copper oxide mines, but it will need to own and develop Nyngan. If it does not act soon and Freeport's CEO Richard Adkerson wakes up to the goodwill a CMR deal would generate for Freeport, Alcan's competitors will wake up.
Nevada Exploration Inc (NGE-V)





South Grass Valley United States - Nevada 2-Target Drilling Au May 5, 2021 - 0:16:13

P2 Gold Inc (PGLD-V)





Gabbs United States - Nevada 4-Infill & Metallurgy Au Cu May 5, 2021 - 0:23:01

Disclosure: JK owns Scandium Intl & Nevada Expl; Scandium Intl, Nevada Expl & P2 Gold are Bottom-Fish Spec Value rated Favorites

 
 

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