Guy on Rocks: Mining uptick still has a lot of road left

Guy on Rocks: Mining uptick still has a lot of road left

Former geologist and experienced stockbroker Guy Le Page, director and responsible executive at Perth-based financial services provider RM Corporate Finance, shares his high conviction views on the market and his “hot stocks to watch”.

Hot stocks to watch

Le Page believes the next phase of this mining boom will firmly place the focus on good base metals plays, but like their gold counterparts, good value base metals stocks are “looking very hard to find”.

One Le Page thinks is “unloved” but “quite interesting” is Cobre (ASX:CBE). The stock made an impression on its ASX debut earlier this year when it listed at 20c and gained 33 per cent, but has since dipped as low as 14c. It’s trading around 16c at the moment.

Le Page says Cobre is “pretty well cashed up and starting to get some pretty decent results”.

Cobre has its foot on a volcanogenic massive sulphide (VMS) copper-zinc-gold-silver target in Western Australia.

Recent drilling at the Schwabe prospect has delivered hits of 6m at 8.39 per cent copper, 3.52 per cent zinc, 30 grams per tonne (g/t) silver, 0.14 per cent cobalt and 3.1g/t gold from just 49m below surface.

“They’ve got more drilling happening right now, continuing to get more high-grade results. But the thing I like about it is most of the money was set (in the IPO) at 20c, so it’s trading at a 25 per cent drop. The market hasn’t really picked up on these sort of polymetallic VMS stories at the moment,” Le Page explained.

“Most of this drilling is in the oxide zone from what I can work out, so it will be interesting to see what the fresh rock brings. But they’ve had pretty impressive results, and a fairly lacklustre response from the market.”

Le Page says preliminary drilling indicates the prospect is open along strike and at depth but has never previously been drilled.

“There have been some small shafts put down in this mineralisation before but never any serious exploration,” he noted.

“They had about $7m in cash at the end of the quarter with a cap of just under $10m. So a pretty unloved stock. I think it’s very cheap.”

From Stockhead 10/08/2020