- Miners' Wingman
- Posts
- Big Money, Big Hits
Big Money, Big Hits
Wingman
December 07, 2023
DISCLAIMER: None of this is financial advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. Please be careful and do your own research.
If ever compensated for an article, it will be mentioned here.
Big news in the uranium market yesterday.
DALLAS, Dec. 6, 2023 /CNW/ - enCore Energy Corp. (NYSE American: EU) (TSXV: EU) (the "Company" or "enCore") is pleased to announce that it has entered into a Master Transaction Agreement ("Agreement") with Boss Energy Limited ("Boss Energy"), a leading Australian emerging ISR uranium producer, which, upon completion, will result in the sale of a 30% ownership interest in enCore's Alta Mesa project ("Alta Mesa") to Boss Energy for US$60 million, an investment of US$10 million into enCore common shares by Boss Energy, a loan of up to 200,000 pounds U3O8 for enCore's commercial use over the next year, and the formation of a strategic collaboration on the use and joint development of enCore's proprietary Prompt Fission Neutron ("PFN") technology for uranium exploration and production.
At a high level, this seems very favourable to $EU shareholders, but the market did not react significantly to this news – well, not materially. A gain of 1.1%.
US$60 million is nothing to scoff at, and Boss Energy is not just some teachers’ pension investing here. This 30% ownership also involves an injection of US$10 million into $EU common shares and that appears to be all the market factored in. Some back-of-the-napkin math.
Yesterday, the company yielded a gain of ~C$10 million, but receiving financing is half the battle. It’s a significant achievement.
Wingman does not have a position in this company, so due diligence was limited. Market cap and close percentages were pulled from ceo.ca.
While it's important to note that the deal is expected to close in February, someone please add value here if you can: Why wouldn't we anticipate an upward trend for the company until then?
Yes, Boss Energy claims a 30% stake, but the outstanding shares are not subject to dilution, and US$70 million will be injected into the company.
Kudos to the management team.
Yesterday we highlighted the impressive intercept from Snowline Gold. But another exploration company with another monster deposit released some amazing drill results.
It is quite remarkable, but the market shrugged it off, with no change in the market cap at close. I suppose that’s par for the course when you’re an exploration company with a market cap hovering around ~C$900 million.
It is also worth noting that Snowline ended up closing at C$4.67 (down 2.3%).
Plate 1 - Photo of Abundant Visible Gold in Drill Hole MC23-132
The drill hole intersected a 30-centimeter-wide quartz vein containing abundant visible gold that returned 363 g/t (10.59 opt) Au over 0.3m, representing the single highest assay in the Company's drill hole database for the project. The high-grade vein occurs within a broader zone of mineralization averaging 121.8 g/t (3.55 opt) Au over 0.9m and was intersected approximately 60 m vertically below surface. This new vein discovery represents an entirely new high-grade quartz vein in a geological setting comparable to the mined-out, bonanza-grade Croesus vein.
That's some serious high-grade. While it wasn't a lengthy intersection, it's noteworthy given its location in Timmins, a highly gold-endowed district. Also, worth highlighting is that this intercept occurred just 60 metres from the surface.
$ONYX, a sub C$10 million market cap company with approximately 42 million shares outstanding (and around 53 million fully diluted), experienced a 7% gain yesterday in response to this news. Despite a challenging chart this year and having never been on our radar before, they certainly are now.
Gain access to exclusive content like Wingman’s weekend portfolio reviews by subscribing today.
Reply