Paradigm Picks Newsletter 2022/Apr/30
Welcome Back,
As you are aware, as a result of international and domestic issues, the market has taken a tumble in recent weeks. It is in times like these that we go back to our fundamentals.
Short term market sentiment diverges from and masks the intrinsic value of a company. Knowing this we believe that current market conditions are presenting several value/buying opportunities.
Unless there is a material change in one of our holdings, we intend to maintain the same conviction as when we purchased the stock and look for opportunities to add to our positions. In keeping with one of our favourite quotes:
“The big money is not in the buying or the selling, but in the waiting.”
Charlie Munger.
With that in mind, here are some of the latest updates from our featured companies. Enjoy!
We have been reaching out to the CEO’s of our various investments to stay up-to date on their respective progress and initiatives. As always, due to legal reasons, CEO’s may be “tight lipped” regarding various questions, however provide a general sentiment for their projects going forward.
For real-time updates and commentary, follow us on Twitter at:
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Updates
Emerita Resources (TSX-V: EMO.V)
Our Spanish Princess has seen better days from a share price standpoint. That being said, the fundamentals have never been stronger! On April 7th, an update on the Romanera and El Cura deposits (IBW) was issued. Our largest takeaways from this release:
“The Company has permitted more than 50 Diamond drill sites…for Romanera and El Cura” and,
“We are ready to commence the drill program as soon as the permit is received. We have increased the number of drills on the Project to SEVEN in anticipation of the expanded drill program and one more will arrive when the program gets started.”
On April 22nd, EMO Commenced drilling with 4 rigs at the Romanera Deposit and provided significant results from the Infanta deposit. Highlights include:
"According to David Gower, P.Geo., CEO of Emerita, “The Romanera deposit is the cornerstone of the Iberia Belt West Project (IBW). Based on the historical work, it is more than 10X the size of any of the deposits known on the Project to date and has the potential to support a feasibility as a stand-alone operation in the future."
The company also received 10 assay results from the Infanta Deposit incl’ “5.5 m grading 1.2% Copper, 5.9% Zinc, 3.3% Lead, 93.9 g/t Silver and 0.41 g/t Gold.” Please see Table 1 in above link for comprehensive assay table.
As we have been saying for quite sometime, the IBW project could be a monster in its own right and rival that of Aznacollar once fully defined. From our point of view, too much focus has been put on Aznalcollar for the short term while we are developing massive projects which we already own! There is no doubt that Aznalcollar will add significant value for EMO shareholders; we are however more confident in our investment than ever as Infanta and now Romanera and El Cura are being explored. With previous highs of 4.10+ CAD, we certainly consider EMO a buy at these levels.
Please find the interview with CEO David Gower on “Small Cap Steve live” released April 5th outlining the current standings of the Aznalcollar legal situation. Here.
Cross River Ventures (CSE: CRVC)
True to our word, we have been adding in the $0.08-$0.10 CAD range as Cross River Ventures has pulled back in the short term. We see this as a value opportunity to obtain shares on the heels of CRVC’s maiden drill program and expected assays.
As a quick reminder, The company has recently completed their drill program at the “Bear Head Trend” and “Altered Zone” targets at their flagship McVicar property in Ontario, Canada. A total of 3468.5 Meters of core over 14 holes were drilled.
We continue to anticipate CRVC’s maiden assay results and look forward to the project continue to be defined going forward.
Gold Mountain Mining Corp. (TSX: GMTN)
As of April 7th, Gold Mountain Mining released additional assays from their “Elk Gold” project in the “Siwash North Zone.” Highlights include:
1.50 m grading 42.39 g/t Au including 0.30m of 207.00 g/t Au
2.31 m grading 18.90 g/t Au including 0.43m of 101.00 g/t Au
1.60 m grading 26.03 g/t Au including 1.09 m of 38.20 g/t Au
1.17 m grading 16.46 g/t Au including 0.30 m of 35.30 g/t Au
1.00 m grading 12.04 g/t Au including 0.30 m of 39.60 g/t Au
"After marching this resource passed a million ounces and making a new high-grade gold discovery in our Phase ll exploration program, we moved the drill back to the Siwash North zone for Phase lll to perform infill and step-out drilling along our high-grade mineralization," commented CEO and Director Kevin Smith. "Connecting with high-grade directly below our current mine plan gives us the opportunity to analyze bringing both the 1350 and 1400 vein into our mine plan sooner. While the mine is now into cash flow and ramping up to our proposed 19,000 oz production profile, management remains focused on continuing to scale our high-grade resource and our goal of building a multi-million-ounce gold producer."
As we have stated previously, despite market fluctuations, GMTN continues to de-risk itself. Currently sitting at $0.91 CAD, GMTN presents more value for the shareholder than it did when the share price was $2.00 CAD. We believe patience will be rewarded. The fundamentals are ever increasing; the current sentiment will change in due time.
Azincourt Energy (TSX-V: AAZ)
Another play we have been averaging down on while anticipating assay results is Azincourt Energy. As mentioned in our last newsletter, reports of elevated Radioactivity were detected during the course of their ongoing 7,000 Meter drill program at East Preston this year.
On March 31st, AAZ reported the closing of a 5.1M Private placement in addition to a 2.5-to-1 share consolidation. The company issued 63,762,500 flow-through units at a price of 0.08 CAD. Each flow-through unit is comprised of one common share and one “share purchase warrant” valid until March 31st 2024 ($0.10 CAD).
As per the news release, the company has since consolidated its shares to approximately 227,000,000 from approximately 500,000,000 as of April 15th.
Though lengthy, a video explaining the Azincourt Energy’s decision to complete a share consolidation hosted by Chris Parry of Equity.Guru (The -Gauntlet) can be found Here.
In closing, please find a more recent interview (April 20th) with CEO Alex Klenman as featured on “The Market Mindset” with Andrew O’Donnell (Digging Deeper) Here.
Blue Lagoon Resources (CSE: BLLG)
On April 4th, Blue Lagoon Resources provided a Q1 overview to shareholders. Highlights included:
The closing of the most recent $5.7m flow-through financing on March 22nd.
Crescat Capital at the direction of their strategic technical advisor Dr. Quinton Hennigh took down more than 18% of the $5.7m raise.
This financing increased the company’s treasury to approximately $9 Million.
At the time of the release, BLLG had $4 Million in-the-money warrants exercisable at $0.50 due to expire on August 12th, 2022.
CEO Rana Vig purchased 100,000 shares in the open market in the month of March.
As a result, Mr. VIG increased his personal share position in BLLG to over 3.4 million. (We are big believers in investing in companies where management collectively has a significant percentage of the company’s outstanding shares.)
The filing of a new technical report on the Company's Dome Mountain Gold Project
The new resources documented increased the contained gold oz. by 30% and silver ounces by 46% respectively.
45,000 gold ounces were upgraded to the “measured” category.
On April 11th, Crescat Capital took down nearly 50% of an additional $1.51m raise by BLLG. This instance marked Crescat Capital’s third strategic investment in Blue Lagoon Resources - a huge vote of confidence!
On April 20th, BLLG reported visible gold drill results from the “Chance Zone” at their Dome Mountain Project.
Highlights included:
16.8 g/t Au over 0.42 meters, 22.12 g/t Au over 2.14 meters and 33.08 g/t Au over 1.40 meters in hole DM-21-200
10.51 g/t Au over 1.05 meters and 14.49 g/t Au over 1.91 meters in hole DM-21-206 with visible gold
(please see above link for more comprehensive assay results)
We are very encouraged by these results and anticipate further positive news to come out of the “chance zone” as it is excavated further. Currently trading at .55 CAD we consider this stock a buy.
Railtown AI Technologies inc. (CSE: RAIL)
A relatively new stock to our holdings, Railtown AI technologies has caught our attention - and for good reason!
In speaking with management and to quote a succinctly written article by Jocelyn Aspa of “The Market Herald”:
“In a nutshell, Quality Assurance (QA) is intended to detect bugs and resolve the issues while ensuring there are preventative measures in place, so the bugs are not repeated in the future. Broadly speaking, the bug tracking software market is expected to reach just over US$600 million by 2026, significantly up from $218 million in 2018 and growing at a compound annual growth rate of 13.60% over the forecast period. Fueling that growth will be the increased need for bug-free software development in a short turnaround time and the rise in spending on software testing processes.”
“At present, it is estimated that at least 40% of development effort and time is spent on tracing and finding errors, which means tools and integrations are needed to find solutions to these problems. As such, it takes time to analyze and figure out what the root problem is and then deploy a solution and monitor its resolution. Because of this, many organizations don’t have a dedicated team or the resources to do so or find a solution in a cost-effective or seamless way.”
“In other words, simple coding errors are costing companies billions of dollars in damages and lost revenue, which is where Railtown AI and its solutions steps in. Brandolini explained that the company’s mission is essentially using AI to monitor application health and performance and detect the root causes of issues before they turn into major problems AND, in turn, become costly to resolve.”
“…Railtown’s dashboard can track efficiency gains across an organization’s development team as well as the health of the application, while also eliminating costly downtime. What this means is that critical coding errors can take hours to correct, resulting in a 42% productivity loss, which is the equivalent of over 17 hours spent on bad code and the debugging of a 40-hour workweek.”
With our lives becoming more technologically integrated than ever, we saw the immediate application of this software.
Ranging from your current word processer, web browser, financial institution, to your favourite social media platforms app creation, operating systems and more! Our key takeaway was the potential recovery of BILLIONS of dollars in damages via productivity loss etc.
In our opinion, RAIL has industry disrupting technology making it a potential take out target. Currently trading at .20 CAD, we consider Railtown AI technologies inc. a buy.
As always, seek professional financial advice and conduct your own due diligence prior to making any investment decisions,
Paradigm Market Research inc.
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If you have any further questions about these companies, please do not hesitate to contact us. We are more than happy to assist you with real-time, up-to-date information.