One of the hallmarks of a great mining investor is identifying turnaround stories, taking advantage of their low stock prices compared with future potential, and holding on for the long-term, steadied by high conviction, towards hopefully outsized returns.
When the broader market is pessimistic about a given stock, these investors are able to identify if there’s a discrepancy between price and asset value, incorporating qualitative and quantitative metrics, and decide if it’s enough of a margin of safety to merit their dry powder. A working framework for due diligence might incorporate:
- An assessment of the management team and its ability to stir up optimism during their company’s out-of-favour period.
- Products and/or services demonstrated to add value to their respective industries.
- Addressable markets that lay the foundation for long-term demand growth, allowing you to benefit from compound interest.
On today’s Weekly Market Movers, we’ll argue for three mining stocks in the midst of turnaround stories worth telling, each of which makes a strong case for differentiated value creation.
EnviroGold Global
EnviroGold Global, market capitalization C$15.15 million, operates a proprietary platform for mining companies to monetize metals from mine waste and tailings by up to 16 times the recovery rate of legacy technology. The platform, based on 22 patents for mineral extraction (slide 8), places the company at the leading edge of a US$3.4 trillion addressable market (slide 3).
Led by a management team of investing, technology and mining lifers well-versed in enhancing project value, the company acquired a commercial-scale demonstration plant earlier this year and expects to collect its first revenue in Q4.
EnviroGold stock (CSE:NVRO) is currently trading at a more than 86 per cent loss since inception in 2021, making it one to watch should licensing agreements begin to pour in towards the end of the year.
David Cam, EnviroGold’s chief executive officer, spoke with Stockhouse’s Coreena Robertson about the company closing the final tranche of its upsized private placement. Watch the interview here.
Acceleware
Our next turnaround stock is Acceleware, market cap C$14.8 million, an electromagnetic (EM) heating company offering scalable solutions for large-scale industrial projects. The company targets high-polluting industries such as steel, mining and oil and gas, all keen to capitalize on EM’s 98 per cent efficiency rate to decarbonize heating processes conventionally dependent on fossil fuels.
Acceleware’s flagship technologies include the pilot-stage RF XL, its patented low-cost, low-carbon EM thermal production method for heavy oil and oil sands, as well as a pilot project using its patented and proven Clean Tech Inverter to decarbonize the drying of potash ore and other minerals.
After posting losses over the past five fiscal years, Acceleware’s management team, supported by tailor-made backgrounds in electromagnetics and oil and gas, has guided the company towards net-income-positive territory in two out of the past five quarters. This shift suggests the multi-industry appeal of the company’s technology is beginning to scale as the trillion-dollar global electrification movement continues to unfold.
Acceleware stock (TSXV:AXE) last traded at C$0.12 per share. The stock has given back 26.47 per cent year-over-year, but has gained 25 per cent since 2019.
Mike Tourigny, Acceleware’s chief operations officer, spoke with Lyndsay Malchuk about the company’s upcoming participation in the Chile-Canada Mining Innovation Summit. Watch the interview here.
Belgravia Hartford Capital
Our final turnaround story vying for a spot in your mining stock portfolio is Belgravia Hartford Capital, market cap C$1.35 million, an investment holding company that represents the highest-risk but also the highest-reward opportunity on this week’s Weekly Market Movers.
Belgravia Hartford is risky because it has operated at a net loss in four of the past five years, held fewer liquid assets (about C$637,637) than liabilities (C$919,193) as of Q2 2024, and its only meaningful investment is a C$180,000 stake in Nexus Gold (TSXV:NXS) last valued at C$54,000. In response, investors have tanked the stock by more than 85 per cent since 2019.
The company benefits from a path to outsized returns thanks to an ongoing US$12.2 million lawsuit it filed against PolyNatura for alleged breaches of a 2017 royalty agreement. Should Belgravia Hartford come out ahead, as it is confident in doing, shares would likely soar multiples above its current market cap.
Belgravia Hartford remains focused on setting the story straight about its history and future prospects, recently signing a deal with Electric Panda, one of North America’s top film financiers, developers and producers, to create a documentary based on the company’s tumultuous history.
Mehdi Azodi, Belgravia Hartford Capital’s president and CEO, spoke with Lyndsay Malchuk about the upcoming documentary. Watch the interview here.
Join the discussion: Find out what everybody’s saying about these mining stocks and their turnaround stories on the EnviroGold Global Ltd., Acceleware Ltd. and Belgravia Hartford Capital Inc. Bullboards and check out Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of EnviroGold Global Ltd., Acceleware Ltd. and Belgravia Hartford Capital Inc., please see full disclaimer here.
(Top image, generated by AI: Adobe Stock)