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 Mon Apr 22, 2019
Tracker: Spec Value Rating for 92 Resources Corp (NTY-V)
    Publisher: Kaiser Research Online
    Author: Copyright 2019 John A. Kaiser

 
92 Resources Corp (NTY-V: 0.075)

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Tracker - April 22, 2019: Spec Value Rating for 92 Resources Corp (NTY-V)

92 Resources Corp has a Bottom-Fish Spec Value rating based on the strategic location of its Corvette "lithium" project within the apparent trend of the emerging Mythril copper discovery of Midland Exploration Inc. NTY, which has 87.8 million issued and 104.6 million fully diluted, of which declared insiders own less than 2%, and about $600,000 in flow-thru capital that must be spent in 2019, would not qualify for a Bottom-Fish or higher Spec Value rating if it were not located near ground zero in what appears to be shaping up as a Great Canadian Area Play, a resource junior market phenomenon which we have not seen since 2007-2008 when Noront ignited the McFauld's Lake region with its nickel discovery which failed to achieve world class scale. The James Bay region had a mini area play in 2004-2006 when Virginia Gold discovered the Eleonore gold deposit. This time around Quebec has formalized James Bay as part of Plan Nord, a government initiative to develop the northern two-thirds of the province. The James Bay Plan Nord Area Play does not yet have confirmation of a world class discovery, which could come in early May when Midland reports results from its initial 11 hole program at Mythril, though will more likely unfold during the 2019 summer as Midland gets 3 drill rigs turning and a better understanding emerges for this new copper system which has attracted the attention of BHP, the world's biggest copper producer which is not interested in anything with less than world class scale. The realization that NTY is positioned to become the third hottest junior after Midland and Azimut Exploration Inc during the emerging stage of the James Bay Plan Nord Area Play has lit a fire under a group that has suffered as the resource junior bear market trudges along in its eighth year. NTY listed by IPO in March 2010 with a Sedex play in British Columbia's Ketchika trough as a junior called Rio Grande Mining Corp, split its stock 1:2, acquired a Colombian project in 2011, underwent a management upheaval in 2012, rolled its stock back 7:1 in 2013, optioned the Zim Frac silica project in 2014, and succumbed to another 5:1 rollback and name change on June 10, 2014. 92 Under the new CEO Adrian Lamoureux and CFO Dusan Derka NTY became part of the Zimtu orphanage operated by Dave Hodge and changed its focus in 2016 to the lithium boom spawned by the electric vehicle mania created by Tesla. With the help of Jody Dahrouge, who remains one of the larger shareholders, NTY optioned several projects in the James Bay region of Quebec that either covered known pegmatites, the primary bedrock host for lithium, or were in proximity to advanced projects such as Nemaska and Galaxy's James Bay deposit. By 2018 the lithium boom had run its course as the South American brine operators secured expanded production quotas for their salars, the Australians developed new pegmatite based bedrock mines, the price of lithium carbonate dropped more than 50%, and the ice cream parlor started featuring vanadium as the new flavor of the month. So in 2018 NTY optioned the Silver Sands vanadium play next to the Pine Pass project in BC just in time for the area to come under provincial consideration as a protected area for caribou habitat. But NTY also decided to double down on the Corvette lithium project by doing a deal with Osisko Mining Inc that allows it to earn 75% of the FCI claim, an inlier within the Corvette claim package which covers about 75% of a pegmatite trend. With the vanadium pivot dead on arrival, and the Corvette claim's lithium expansion potential colliding with the end of the lithium boom and fallout from the unfolding Nemaska fiasco, NTY managed to squeak a year end $618,000 flow-thru financing at $0.05 which gives it enough money to work on the Corvette project in 2019. But in what amounts to serendipity, the Mythril copper discovery announced by Midland in October 2018 now appears to be part of a 40-60 km east-west trend that projects westward about 10 km onto Azimut's Pikwa property based on a just disclosed copper lake-sediment anomaly, and 20 km eastwards on Midland ground before Midland's staking collides with the pre-existing Corvette claims, which run for about 10 km before Midland's claims resume for another 15 km farther east. At this point it is not clear what geology is relevant, but it is important that BHP invested $5.85 million in Midland at a 36% premium based in part on its assessment that the Mythril "magmatic-hydrothermal" system does not readily match any deposit style in its catalog. NTY lacks a strong technical team, but does have on its advisory board Darren Smith, a Quebec based geologist who worked on the Eldor rare earth project and is part of Jody Dahrouge's consulting firm which is active in Quebec. Market interest in Quebec's lithium potential is likely down for the count, but these pegmatite systems sit within greenstone belts which have gold potential. NTY has several other such projects in the James Bay area that can benefit from a gold focus. But as of Q2 2019 NTY's Bottom-Fish Spec Value rating hinges entirely on the accidental location of the Corvette project within a trend controlled by Midland. To what extent 92 Resources Corp becomes a major James Play junior will depend on how quickly Midland's discovery gets acknowledged as world class with regional replication implications and how quickly NTY mobilizes its focus on the broader potential of the Corvette project. Unlike Midland and Azimut which have strong shareholder bases and corresponding poor liquidity, NTY has a weak structure screaming for a rollback whose liquidity will become a blessing for the market as the James Bay Plan Nord Area Play gains traction.

 
 

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