Ann: Exceptional drilling results to upgrade Green Bay Resource, page-43

Exploration spotlight

In Garimpeiro’s preferred world of junior explorers and developers it has been noticeable that, on the whole, there is a disconnect of sorts between the LME copper price being nice and strong – let alone what is going on in the US copper market – and stock prices.

The juniors have been plodding along as if the copper price (in either market) was $US4/lb or less.

So he reckons it might be time to take advantage of the current copper price confusion, remembering that the big copper thematic of supply shortages emerging in the next couple of years is still lurking in the background.

Garimpeiro has previously banged on about how decent exploration results/resource growth/development plans can mean a stock outperforms whatever the underlying commodity is doing. It is no different for the copper stocks.

It is why he reckons Steve Parsons at FireFly Metals (ASX:FFM) ($1.01 a share) and Christian Easterday at Hot Chili (ASX:HCH) (67c a share) can mount a case that their generally lower to flat share prices since the start of the year are both disconnected from the copper price, and their value re-rating events.

In the case of FireFly, impressive results from an infill drilling program at its Green Bay copper-gold project in Canada point to a coming big shift of resources into higher confidence levels.

“These higher-confidence resources typically attract increased valuations and can be used to help underpin mining studies, which in turn are designed to demonstrate the production and cashflow potential of the project, unlocking further value in the process,” Parsons explained during the week.

via Barry Fitzgerald column on S***khead this morning.