NXM the next multi bagger, page-1119

Quarterly suggests everything is ticking along here nicely!

Part of the recent pullback is the downtrend in the gold price – whilst this has been deflating for all juniors, the chart has built a massive bull flag that will hopefully see a monster move upwards.

Briefly, the $100 gold rally from 31 March’s double bottom has not been supported by institutional funds – the ‘Commitment of Traders’ report from this week suggests that managed money has increased their SHORT position by roughly 4%. If gold gets over the ‘psychological’ hurdle at $1,800, we will likely see some smart managed money flip long assisting the big push to all-time highs.

This seems to be supported by the recent merger / acquisition action:

· 10 March – Newmont acquired GT Gold for USD $311 million;

· 12 March – First Majestic acquires Jerritt Canton mine for USD $470 million;

· 15 March – Gran Colombia acquire Gold X for CAD $315 million;

· 15March – Evolution acquire Battle North Gold CAD $343 million.

This is just a snapshot of the M&A action during the three months to March and suggests that some of the biggest and best companies were hoovering up projects / prospects whilst the gold price was low. Seems to me that these experts are thinking the gold price is going north and were grabbing the available bargains.

All this is coupled with the macroeconomic fundamentals (inflation driven by money printing, government debt which will likely force real interest rates further into the negative and general risk off trades around markets).

Turning to Nexus, Pinnacles and Crusader currently hold a combined 163,000 ounces of JORC 2012 gold. Whilst Pinnacles has been dusted for now, the reality is that this is currently worth ~$375 million (although currently uneconomical to progress either). This resource will move up when the 6 months of drilling to 31 December 2020 and the current program is included in the MRE.

Speaking of drilling, I’ll be eagerly awaiting the next set of drill results – the AGM presentation included this great cross-section of Crusader:

The historic holes identified increased grade at depth and the current program is targeting a possible elephant deposit deeper down. The increasing width at the shallower depths and drilling results from the 6 months to 31 December 2020 suggest we may be onto something bigger.

It’s also possible that the prospect meets with Templar!

Worth noting that the quarterly mentions that Andy T is presenting at the RIU conference in Sydney on 6 May. The last time Andy T presented at an RIU conference was in Perth on 15 September – the share price moved from 7.3 to 7.9 cents that day and over the next month, it marched from 8.2 to 18.5 cents by 21 October (coupled with further results).

At a 9-cent share price ($22m MCap and $12m EV), the downside risk is minimal and upside could be massive. The above doesn’t consider anything else at Wallbrook (see Paint), dealing with Pinnacles, shares in GIB and our new tenement over East (which also exposes NXM to copper).