Investors in Canadian junior mining stocks need some of the sturdiest stomachs in the market because of the asset class’ pre-revenue operations, reliance on financing and often multi-bagger leverage to target commodities.
It’s the broader market’s reluctance to consider non-cash-flowing stocks such as junior miners that makes them so prospective, often leading to mile-wide misperceptions for seasoned investors to take advantage of.
Doubleview Gold
Consider Doubleview Gold, a Canadian junior mining stock that identifies, acquires and finances gold, copper, cobalt, scandium and silver exploration projects in North America, particularly in British Columbia.
The company’s flagship Hat porphyry project features an initial resource estimate representing billions of dollars of commodities in the ground, including:
- 733 million pounds of copper, 28 million pounds of cobalt, 929,000 ounces of gold and 2 million ounces of silver indicated.
- 1.945 billion pounds of copper, 91 million pounds of cobalt, 2.328 million ounces of gold and 7.575 million ounces of silver inferred.
- Scandium potential is estimated to be 300 to 500 million tons.
- The calculations assume a price of US$1,900 per ounce of gold, a 19.4 per cent discount to the price on Thursday.
Management views Hat as potentially transformative to the North American economy thanks to its comprehensive resource, which also includes nickel, zinc and platinum group elements. Judging by the project’s close similarity in genesis, host rock types, alteration and mineralization to numerous British Columbia mines, including Copper Mountain, Mount Polley, Mount Milligan, and Red Chris, it holds the potential to produce billions in future revenue.
The market agrees, having rewarded Doubleview Gold (TSXV:DBG) shareholders with a 312.50 per cent return since 2019, though the stock has plenty of room to run, given the discrepancy between its resource and measly C$62.85 million market cap.
Cascadia Minerals
Another Canadian junior mining stock to consider is Cascadia Minerals, which is focused on copper and gold discoveries in the Yukon and British Columbia.
Its flagship Catch property in the Yukon features extensive high-grade copper and gold mineralization across a 5-km-long trend, with rock samples returning up to 3.88 per cent copper, 1,065 grams per ton (g/t) of gold and 267 g/t silver.
The company’s PIL property in British Columbia, and Mack’s Copper, Milner and Sands of Time properties in the Yukon, offer additional exposure to a multitude of enticing porphyry copper-gold and epithermal gold targets.
Each of Cascadia’s properties is adjacent to established mines (slide 4) and de-risked by its major shareholders:
- Hecla Mining Company (14.9 per cent), the largest primary silver producer in the United States.
- Michael Gentile (6 per cent), a well-respected strategic active investor in metals and mining stocks, a la Eric Sprott.
- Barrick Gold (5.3 per cent), a global copper and gold producer.
With ongoing drilling at Catch and PIL, and prospecting underway at Sands of Time, Mack’s Copper and Milner, assays to be released though 2024 and beyond will encourage an upside surprise.
Slightly ahead of gold’s 23 per cent return since 2023, Cascadia’s paltry C$15.24 million market cap grants you exposure to significant exploration upside that’s done little more than vacillate in the market’s hands.
Cascadia Minerals stock (TSXV:CAM) is up by 61.11 per cent year-over-year, but only by 31.82 per cent since inception in 2023 after Hecla’s acquisition of ATAC Resources.
Graham Downs, Cascadia’s president and chief executive officer, spoke with Stockhouse’s Lyndsay Malchuk about the Canadian junior mining stock’s record-breaking samples at the Catch property. Watch the interview here.
Star Diamond
Our last junior stock pick where intrinsic value and market perception are at odds is Star Diamond (TSX:DIAM), market cap C$36 million, an acquirer, explorer and developer of mineral properties focused on diamonds.
The Canadian junior mining stock’s flagship Fort à la Corne properties in central Saskatchewan house its 25-per-cent-owned Star-Orion South diamond project, the largest undeveloped diamond deposit in the world.
Star Orion South’s 2024 resource estimate details 34.8 million carats indicated and 36.9 million carats inferred. The estimate is preceded by the project’s 2018 preliminary economic assessment, which forecasts an after-tax net present value (7 per cent) of US$2 billion, a 38-year project life and an initial capital cost payback period of only 3.4 years. Management is planning to complete a feasibility study at the property by the end of 2026 and break ground on mine construction in three to five years, subject to successful financing and permitting.
Star Diamond shares have responded to this promise by giving back more than 71 per cent since 2019, as retail investors incapable of building conviction through mining studies and exploration results left the stock for dead. Fast-forward to today, and the multi-billion-dollar Star Orion South project and prospective Buffalo Hills property are available for pennies at C$36 million.
How often does this exponential discrepancy present itself in the market, you might ask? In the realm of Canadian junior mining stocks, seasoned investors know the answer is more often than you’d think.
Ewan Mason, Star Diamond’s chairman, president and chief executive officer, spoke with Lyndsay Malchuk about Star Orion South’s latest resource estimate. Watch the interview here.
Join the discussion: Find out what everybody’s saying about these Canadian junior mining stocks and their high-potential upside on the Doubleview Gold Corp., Cascadia Minerals Ltd. and Star Diamond Corp. Bullboards, and check out Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of Doubleview Gold Corp., Cascadia Minerals Ltd. and Star Diamond Corp., please see full disclaimer here.
(Top photo of gold from Cascadia Minerals’ 1,065 g/t gold outcrop sample on its Catch property in the Yukon: Cascadia Minerals)