Huge news from Blue Moon Zinc Corp. (MOON:TSX.V; BMOOF:OTC). The company just announced a resource update for its wholly owned zinc deposit in California and the numbers are outstanding—something the market didn't expect from a mere $9 million market cap company. At $0.105/share, investors haven't quite fully understood the value of what they have in the ground and that's what I'm hoping to shed some light on. With this upgraded resource estimate, MOON.V could be one of the most exciting $0.105/share stocks we've seen in a very long time.
MOON.V announced that its deposit now comprises 3.7 million tons in the Indicated Mineral Resource category grading 8.3% zinc equivalent ("ZnEq") and 4.1 million tons of Inferred Mineral Resources grading 7.8% ZnEq, both at a 4.0% ZnEq cut-off grade.
In layman's terms, that's 377 million pounds of zinc in the Indicated Mineral Resource category and a further 395 million pounds of zinc in the Inferred Mineral Resource category, and the most exciting part of the whole story is that management believes that there's potential of another "Blue Sky" Blue Moon style deposit. The team is so excited about the exploration upside that they've already ear-marked another drill program to start in early 2018.
As you can see from the picture above, there's huge upside potential as the company drills below its current resource area.
So what's 377 million pounds of zinc really worth? Well, at $1.40/lb, let's just say it's a lot more than MOON's current market cap of $9M. . .now you understand why I'm so excited about this story?
So how can this mine get permitted? The team has already started the process and is putting the right pieces in place to have it all covered. It recently engaged Sespe Consulting Inc., an environmental engineering firm with a successful record of permitting mining projects in California, including a key role in the permitting of the Golden Queen Soledad Mountain mine in 2015. Its assistance is important in moving the project toward eventual production. MOON and Sespe have already had positive discussions with the local county, which will be the lead agency for permitting.
Blue Moon also brought on Lutz Klingmann, who recently permitted and achieved commercial production (early 2016) at Golden Queen's project in Southern California as CEO. Mr. Klingmann is a key technical advisor to Blue Moon. The fact that the project will be underground should yield a lower environmental impact, which should help its cause.
So what's next? Management is moving towards a PEA to be released in Q1 2018 as well as another drill program in 2018 to expand the current resource. There should be a lot more news and updates to come so make sure you stay tuned and don't take Blue Moon's ticker: MOON.V off your radar screens. This is one $0.105/share stock you can't afford to forget!
Read Blue Moon's announcement here.
Etienne Moshevich is the editor of Alphastox.com, the world's premier junior market newsletter featuring companies with the very best in management teams, projects and capital structures. Moshevich is also the president of Transcend Resource Group, an investor relations company based in Vancouver, B.C. specializing in exposing undervalued companies to the marketplace. With a degree in economics, Moshevich has helped finance many successful mining, oil and gas, technology and biotech companies over the years, many of which have rewarded shareholders with substantial returns.
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1) Etienne Moshevich: Transcend Capital Inc. is a shareholder of Blue Moon and has been paid a fee. I determined which companies would be included in this article based on my research and understanding of the sector.
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5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article. As of the date of this interview, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Blue Moon Zinc Corp., a company mentioned in this article.
Graphic courtesy of the author