Newsletter Writer Shares Three Explorers To Buy

Global Analyst Adrian Day reviews three of his favorite junior exploration stocks, which he believes are all Buys.

Lara Exploration Ltd. (LRA:TSX.V) said it had engaged a local firm to prepare a mineral resource estimate and a preliminary economic assessment (PEA) on its Planalto Copper Project in Brazil. This follows the final option payment to Anglo American for one of the licenses.

The resource report is scheduled for the second quarter, while the company said it expected to “complete technical studies for the PEA” in the third quarter but did not say when the study itself would be completed or released. This is very significant news. After regaining full control of the project earlier this year, Lara indicated it would not seek a partner before completing this work.

With Simon Ingram now CEO, we would expect a methodical and fairly aggressive program to show the project once the resource estimate has been completed. With copper projects in demand, we would expect a lot of interest in a project like Planalto. The team of Ingram and Miles Thompson (Lara’s founder and now chairman) was very successful in selling the Cukaru Peki project (Timok) in Serbia and we expect them to chalk up another success with Planalto.

Other Projects Are Advancing

Separately, the company said it had agreed to a restructuring of the Celesta Copper Project in Brazil. The project, formerly known as Curionopolis, has been beset with partners unable to fulfill obligations. Now, a private company, Tessarema, has put money into the project, for which Lara holds both a 5% net profits interest and a 2% royalty. Other projects are also advancing. Lara has multiple projects, each of which could justify the company’s market cap, but Planalto is the most advanced. They do not need to raise funds for their current programs.

We have written before that Lara is a “must-own.” Although there has been a strong move in the stock price — from 44 cents — over the past month, we would still look to buy and buy before the resource estimate is published and the project essentially put up for sale.

With a wide bid-ask spread (closing at 0.77 x 0.84), you should not just pay “market” but not be too stingy with your bids.

Record Revenue and Profits Received by Orogen

Orogen Royalties Inc. (OGN:TSX.V) reported record revenue and profit for the year 2023, with a net income of $1.8 million, up 155% from the previous year. Both royalty and prospect generation recorded gains: royalty revenue of $5.9 million was up 59%, while prospect generation net income (after exploration expense) of $1.4 million was up 337% from the prior year. We have commented before that not too many small exploration companies have free cash flow as well as a strong balance sheet ($18.5 million in cash).

Orogen would be an attractive company even without its crown jewel, a 1% royalty on the Silicon and Merlin deposits being advanced by AngloGold in southern Nevada, which already contain 13.2 million ounces of gold. Orogen’s stock price has slipped 6 cents over the past week, and you should take this opportunity to buy. Indeed, Orogen, like Lara, is another well-run junior with top management and, importantly, a potential near-term catalyst.

It is another “must-own” stock.

Midland’s Partnership Expands

Midland Exploration Inc. (MD:TSX.V) and Rio Tinto Plc (RIO:NYSE; RIO:ASX; RIO:LSE; RTPPF:OTCPK) have amended their option agreement on lithium projects in James Bay, adding one project bringing the total to 11 and increasing the required spend by $1.5 million, plus some minor payments to Midland.

The revised earn-in agreement indicates a positive relationship and suggests that Rio is happy with work to date.

Buy.

TOP BUYS this week, in addition to above, include Barrick Gold Corp. (ABX:TSX; GOLD:NYSE), and Metalla Royalty & Streaming Ltd. (MTA:TSX.V; MTA:NYSE American).

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Important Disclosures:

1. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Lara Exploration Ltd., Metalla Royalty & Streaming, Midland Exploration Inc., Orogen Royalties Inc., Midland Exploration Inc., and Barrick Gold Corp.
2. Adrian Day: I, or members of my immediate household or family, own securities of: All. My company has a financial relationship with: All. I determined which companies would be included in this article based on my research and understanding of the sector.
3. Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports was not paid by the author to publish or syndicate this article. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.
4. This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports’ terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company.

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Adrian Day Disclosures

Adrian Day’s Global Analyst is distributed for $990 per year by Investment Consultants International, Ltd., P.O. Box 6644, Annapolis, MD 21401. (410) 224-8885. www.AdrianDayGlobalAnalyst.com. Publisher: Adrian Day. Owner: Investment Consultants International, Ltd. Staff may have positions in securities discussed herein. Adrian Day is also President of Global Strategic Management (GSM), a registered investment advisor, and a separate company from this service. In his capacity as GSM president, Adrian Day may be buying or selling for clients securities recommended herein concurrently, before or after recommendations herein, and may be acting for clients in a manner contrary to recommendations herein. This is not a solicitation for GSM. Views herein are the editor’s opinion and not fact. All information is believed to be correct, but its accuracy cannot be guaranteed. The owner and editor are not responsible for errors and omissions. © 2023. Adrian Day’s Global Analyst. Information and advice herein are intended purely for the subscriber’s own account. Under no circumstances may any part of a Global Analyst e-mail be copied or distributed without prior written permission of the editor. Given the nature of this service, we will pursue any violations aggressively.

( Companies Mentioned: LRA:TSX.V, MD:TSX.V, OGN:TSX.V, )