Mid-Tier Mining House

Bit of a lull in the conversation here, so I thought that I would start a new thread.

As previously stated, I watched JRV closely for around two years before taking the plunge and buying in. Once they bedded down the eCobalt merger, I felt the company was significantly derisked and the path to production was much clearer. Both M2 Cobalt and eCobalt Solutions are excellent acquisitions. TBH, lower grade laterites such as Nico-Young held little interest for me before, however, the game has completely changed now.

Investing in pure exploration plays and hoping they hit pay dirt is a highly risky venture. I still punt on those from time to time, however, I now prefer to back in companies at the development stage. I think the NST analogy is a good one here. Acquire assets cheaply, develop them, build FCF, build a portfolio of assets, develop them, repeat. To think NST shares were worth 3c on the 1 Jan 2010 and hit $14.06 last month. What’s that? 468-469 bags in 9 years? A 10K investment would be worth $4.68m now. Those who held on are laughing. Obviously, we are talking about a different metal here, but the strategy itself is sound.

And I guess that it is JRV’s unique strategy that holds the most attraction for me. On the one hand, they have acquired a strong asset in Idaho and are a development stage, mining junior now (planning to transition into a producer within two years). On the other hand, they have built a portfolio of enviable exploration plays that allow for additional bang for one’s buck upon any exploration success.

The end game for this mob is to build a mid-tier mining house. If they achieve this goal, we are talking about multiple bags from here. Catalysts include:

Drill ICO and (hopefully) expand the current resource.
Release BFS.
Secure offtakes and finance for ICO.
Commence production, pay off debt, create +FCF.
Exploration updates at Uganda (possibility of a significant discovery).
Secure the Kilembe Project and redevelop the historical Kilembe mine (approx 4 million tons of ore, 1.98% pure copper, 0.17% cobalt).
Secure the Kabanga Nickel-Cobalt Project in Tanzania.
JV Nico-Young.
Divestment of non-core exploration assets.

Plenty to play out here and we can't discount events in the broader macro environment. Likewise, JRV is beholden to the vagaries of the commodities and capital markets. Saying that, I am backing this gun management team in to achieve their vision of building a mid-tier mining house within the next few years or so.