Paradigm Picks Newsletter 2022/May/31
Welcome Back,
On May 4th 2022, the Federal Reserve hiked interest rates by 50 basis points (BP’s) or 0.5%, the largest single monthly increase in approximately 22 years. Federal Reserve Chair Jerome Powell added additional 50 basis point increases will be up for discussion over the next two FOMC meetings.
In conjunction with ever-increasing tensions between the Ukraine, Russia and geo-political concerns involving the United States - uncertainty has taken ahold of overall markets. As a result, May 2022 saw an significant selloff in general markets with Crypto currency and Tech sectors being most dramatically affected.
While Macro trends in the markets were overwhelmingly bearish, we would like to point out that the S&P 500 accounts for ~80% of the broader American markets by capitalization.
All that to say - the performance of a comparatively small number of stocks (heavily favoured in the tech sector at present) can at times mislead investors to believing sentiment across all sectors is negative. Though market-wide ripple effects have occurred, we believe under the radar, Commodity, and Metals sectors show signs of recovery sooner than most.
Therein lies our value buying opportunity.
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.
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Updates
Emerita Resources (TSX-V: EMO.V)
It’s been a tough month for the Spanish Princess. That being said, we have received fantastic updates and general sentiment regarding the stock seems to be turning for the better.
On May 10th 2022, Emerita Resources provided an update advising the much anticipated drilling permits for the “La Romanera” and “El Cura” deposits had been approved! Highlights include:
Four diamond drills initially planned to begin exploration at Romanera;
One diamond drill initially allocated for the El Cura deposit;
50 drill pads permitted on the Romanera deposit;
Initial drilling phase expected to be 15,000 Metres in size.
(Please see above link for comprehensive details regarding Romanera’s historical estimate as conducted by Asturiana de Zinc and Rio Tinto respectively.)
On May 17th 2022, Emerita Resources advised they would be expanding the initial phase of drilling on the Romanera deposit from 15,000 to 70,000 Metres! Highlights include:
70,000 Metres of drilling expected to be completed by the end of 2022;
Number of drills on site to be increased from four to six;
If required, additional drills will be acquired in order to ensure the drill program in its entirety is completed by year end;
Once completed, The company intends to publish a NI 43-101 resource estimate for the IBW project.
(Please see above link for comprehensive details regarding strike length, drill spacing, step-outs infill drilling and comments by CEO David Gower.)
Needless to say, despite recent market pressure, we are thrilled with these updates! Reaching recent lows of $1.22 CAD, EMO.V has rebounded, closing up $0.22 on Monday, May 30th from Friday, May 27th’s close to $1.74 CAD.
Today (May 31st) saw a selloff transition to a late day rally closing at $1.67 CAD with decent volume. We find this quite bullish considering the significant move Monday.
As mentioned time and time again, the IBW project continues to be de-risked while trading at a substantial discount from the stock’s previous $4.14 CAD highs. With a (future) completed 43-101 for the IBW project and an Aznalcollar decision in the wings, the company is well positioned as a future takeover target.
Manning Ventures (TSX-CSE: MANN)
Manning Ventures is a multi-sector (mineral) exploration play focusing on Iron Ore, Gold, Silver and Copper in Canada. What caught our attention most recently was the planned exploration of their 100% owned Bounty Lithium Project.
With our average position at $0.065 CAD in context with a 52-week high of $0.20 CAD; we are well positioned for future upside. Catalysts include:
Anticipation of Base/Precious metals recovery over the next 6 months;
Preliminary results from the 7,544 Hectare Bounty Lithium Project.
Insuraguest Technologies inc. (TSX-V:ISGI)
On May 10th 2022, Insuraguest Technologies provided a financial update regarding their “ISG Active” product. Highlights Include:
From December 16th 2021 to March 31st/ 2022 ISGI’s digital event based insurance produced US$260,879 in gross premiums from:
$160,826 USD in coverage for 1day ski tickets, and,
$100,053 USD in policy upgrades for additional coverage online.
The 2022-2023 will see product expansion by way of additional sales channels comprised of:
Season passes;
Pre-sold multiple-day ski tickets;
Ski tickets available for purchase on site.
On May 30th 2022, ISGI released:
Interim Financial Statements (Please see pages 3-6 and 12-16 for pertinent financial information); and,
An updated MD&A (please see pages 2-7 for pertinent financial information.)
Both documents are current as of May 31st 2022.
What captures our interest most about this stock is the company’s ability to successfully expand their coverage options.
While “insurtech” is an industry disruptor in itself, the ability for clients to purchase additional coverage outside their room or vacation home is the “holy grail” of the industry.
We believe Insuraguest Technologies is in the process of cracking this code; and as indicated by their multi-billion dollar partners and clients, people are taking notice. As a result, we have averaged our position to $0.15. CAD.
Blue Lagoon Resources (CSE: BLLG)
Following their flurry of news releases last month, Blue Lagoon Resources shows no signs of slowing down.
On May 9th 2022, the company was pleased to report continuous hits of high grade gold from their Dome Mountain Project! Highlights from hole DM-22-232 include:
“11.78 g/t Au, and 39.9 g/t Ag over 7.70m;
including 15.50 g/t Au, 68.9 g/t Au over 3.07m, and;
38.61 g/t Au and 85.3 g/t Ag over 1.10m.”
“Quinton Hennigh … commented: "Once again, drilling at the recently discovered Chance Structural Zone has generated impressive high-grade results for Blue Lagoon. The 7.7 meters intercept of 11.8 g/t Au and 39.9 g/t Ag in hole DM-22-232 occurs near a previous intercept of 7.3 meters grading 14.8 g/t Au and 38.3 g/t Ag in hole DM-21-224 announced earlier this year. Given this structure appears to be steeply dipping, it appears that the true width of this gold rich structure is perhaps 70-75% the length of the reported drill intercept, so approximately 5.0-6.0 meters, a very impressive width. I am very happy that the Company plans aggressive follow up drilling on this vein hosting structure.”
As with most stocks this month, BLLG has closed down at $0.41 CAD at the time of writing. That being said, as mentioned previously, this is another scenario where the project is continually de-risked while trading at a considerable value - especially given the recent multiple strikes of high-grade gold. We highly anticipate the continued exploration of this project.
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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