The art of investing in micro-cap stocks lies in rigorous analysis paired with the nerve to take a contrarian approach, even when the broader market is united in its disdain.
Unlike large-cap stocks, which are widely traded and covered in the financial press, micro-caps will often fail to track their underlying companies’ intrinsic values, simply because there aren’t enough investors to make a market big enough for the stock to move in line with fundamentals.
This disconnect between stock price and a rational assessment of what a company brings to the table can stretch on for years, often making it blatantly clear that the broader market has no idea what it’s missing.
Two stocks worth thinking about under this lens are Spirit Blockchain and Sixty North Gold Mining, whose less-than-stellar returns fail to do justice to the growth embedded in their assets.
Spirit Blockchain
Spirit Blockchain is an investment company providing exposure to a diversified portfolio of opportunities in the crypto and blockchain space. This includes interests in:
- InvestDEFY, an AI technology platform for structured products using digital assets, backed by a leadership team that has designed, launched and issued over US$3 billion in structured products over the past four years and deployed more than US$32 billion in risk capital using AI strategies at institutional scale.
- Vesta Equity, a company that tokenizes real estate equity, enabling homeowners to access their equity debt-free and outside investors to participate. The company touts its potential to outperform mortgage securities and REITs, the latter representing over US$4 trillion in assets in the U.S. as of Q3 2024, according to Nareit.
- A future staked Solana indexed product in partnership with Astralane to offer passive exposure to the cryptocurrency while earning a yield. SOL tokens command a market capitalization of approximately C$93 billion according to Coin Market Cap as of 3:09 pm ET on March 20. The token’s price has grown by six times to over US$180 since 2023. Lewis Bateman, Spirit Blockchain’s chief executive officer (CEO), spoke with Stockhouse’s Lyndsay Malchuk about the collaboration. Watch the interview here.
These value-added ventures, combined with additional holdings in automated crypto management technology, WEB3 derivative clearing technology, as well as strategic crypto tokens like Dogecoin, offer investors a high-upside approach to capitalizing on digital assets’ potential long-term growth. The crypto market cap has grown from C$100 billion in 2017 to about C$4 trillion to date, reminding us that, while past performance is not necessarily predictive of future growth, it’s certainly indicative.
Shareholders have been pessimistic at this prospect, tanking Spirit Blockchain stock (CSE:SPIR) by almost 80 per cent from its all-time high in December 2024, four times the crypto market cap’s 20 per cent loss over the period, last trading at C$0.08 per share.
Sixty North Gold Mining
Our second underappreciated micro-cap stock is Sixty North Gold Mining, which is re-starting the past-producing Mon gold property 40 km north of Yellowknife, Northwest Territories. Past production at the A zone yielded 15,000 ounces of gold, with nearby mines in the camp owned by Gold Mining and Gold Terra having produced more than 15 million ounces to date (slide 7).
The 622-acre Mon features partially-exposed gold mineralization up to 62.6 grams per ton (g/t) gold, as well as numerous silver and gold-rich volcanogenic massive sulphide targets, including trench samples grading 1 g/t gold, 203 g/t silver, 0.59 per cent lead and 0.96 per cent zinc over 0.45 m.
The property’s demonstrated exploration upside has been lost on investors, who have cut Sixty North stock (CSE:SXTY) by 48 per cent since 2020, even though gold has more than doubled in price over the period, recently pushing past the US$3,000 ounce milestone.
Dave Webb, Sixth North Gold Mining’s CEO, joined Coreena Robertson to speak about imminent drilling plans on the Mon gold property. Watch the interview here.
Join the discussion: Find out what everybody’s saying about these commodity stocks on the Spirit Blockchain Capital Inc. and Sixty North Gold Mining Ltd. Bullboards and check out Stockhouse’s stock forums and message boards.
This is sponsored content issued on behalf of Spirit Blockchain Capital Inc. and Sixty North Gold Mining Ltd., please see full disclaimer here.
(Top image, generated by AI: Adobe Stock)
