With inflation settling in for at least the foreseeable future, perhaps you’re looking to expose your portfolio to gold’s inevitable upside in an inflationary environment. There are lots of ways to do that: gold ETFs, mutual funds, major and mid-tier gold producers, even physical gold. But none of those options offer investors the fun factor—and some of that fun, admittedly, goes hand in hand with the risk—of microcap gold stocks.
But if that microcap has decent fundamentals attractive projects, proven management, and enough news flow to keep retail investors interested, then the risk becomes more manageable and the fun factor increases considerably, especially the potential for extraordinary capital appreciation.
If you’re seeking that kind of fun, at about $0.10 per share, Inomin Mines Inc. (MINE:TSX.V; IMC:FRA) may be worth a look.
Founder and editor of Struthers' Resource Stock Report , Ron Struthers just issued a new buy recommendation for Inomin.
This plucky microcap has no less than three projects with considerable potential to delineate substantial resources: the advanced-stage La Gitana gold-silver project in Oaxaca State, Mexico; the nearby Pena Blanca gold-silver project; and the Beaver–Lynx nickel-cobalt property in British Columbia.
Nickel-cobalt? What?
Hold your horses.
Beaver and Lynx are the first considerable properties that Inomin brought into the fold. These two properties (recently merged into one large 20,000 hectare property) are in south-central B.C., an established mining jurisdiction with paved roads and plenty of super-clean hydroelectricity.
One drill hole by a previous operator hit an interval of 21.2 meters running 0.28% nickel and 0.012% cobalt at about 40 ft. below surface. Another hole intersected a long 107 meter interval grading 0.18% nickel and 0.01% cobalt. All 25 drill holes hit relatively consistent grades at shallow depths, meaning the deposits could one day be mined via open pit methods — if the economics add up.
And the acquisition cost was, well, cheap.
How cheap?
“Basically, the cost of staking, which is minimal,” explains John Gomez, president and CEO of Inomin. “I wanted to get both properties because I desired exposure to the battery metals sectors.”
Yes, battery metals. The only kind of mined commodities that COP26 delegates get excited about. Nickel use in electric vehicle batteries currently represents about 4% of the nickel market, but that is expected to grow to 31% by 2026.
The global shift to electric vehicles and decarbonisation means the world will need a lot more nickel. BHP expects nickel demand to surge four-fold in the next 30 years. Source: https://www.reuters.com/business/sustainable-business/global-need-copper-nickel-will-multiply-over-next-30-years-bhp-2021-11-17/
Gomez believes the sulphide nature of the nickel mineralization found at Beaver and Lynx will garner more interest from potential partners given that sulphide nickel, also known as Class 1 nickel, is the preferred type of nickel for lithium-ion batteries. He’s already signed confidentiality agreements with multiple parties.
“I've had discussions with a few groups over the past six months. A lot of people are watching what we're doing and have expressed an interest. They want to see us advance the project,” Gomez says. “Everywhere the previous operator drilled at Beaver property they found nickel with cobalt.”
Inomin has been drill testing a considerable 6 km long area at Beaver to determine the extent of nickel-cobalt mineralization on the eastern side of the property. In a Nov. 15 news release, Inomin announced the intersection of long intervals of favorable mineralization that ranged up to 190 meters in thickness.
With these favorable results, Inomin could bring in a partner to help fund further exploration and development, or spin its nickel-cobalt assets into a new company.
“We're open to both options, obviously. Both scenarios would be good for our company and our shareholders,” Gomez says.
The next step is to evaluate the drill results, samples of which have already been sent for testing. Results are currently pending.
Inomin has yet to drill at Lynx, which is about 10 km south of Beaver. This sizable area – roughly 12,000 hectares – is geologically similar to Beaver with multiple, large 2 to 3 km long nickel targets.
But what about the gold? Glad you finally asked.
La Gitana is a low-sulphidation gold-silver epithermal system. Thirty-eight holes were drilled into the Cerro Di Oro target at La Gitana by its previous owners, Chesapeake Gold (CKG:TSX.V) and Goldcorp [since consumed by Newmont (NEM:NYSE; NMC:TSX)]. Drilling outlined a mineralized zone about 500 meters long by 300 meters wide, with depths ranging from 50 to 300 meters.
The best drill intercept was an impressive 133.5 meters grading 1.78 grams per tonne gold and 100.7 grams per tonne silver (1.78 g/t gold and 100.7 g/t silver). Mineralization remains open along strike, laterally, and at depth.
What’s more, La Gitana is not far from Gold Resource’s (GORO:NYSE) Arista and Mirador gold-silver mines, as well as Fortuna Silver Mines’ (FSM:NYSE) San Jose gold-silver mine. All three mines are situated in the prolific Oaxaca gold-silver belt.
“I have relationships with certain key individuals of both companies,” Gomez tells Streetwise. “Both of those companies are aware of what we're doing, and they're very interested in our projects.”
A technical report filed on La Gitana reads: “Using the existing information and results of the core drilling carried out in the Cerro Di Oro zone by Chesapeake Gold Corp., it is recommended to initiate a resource estimation.” Inomin plans to compile a resource estimate on La Gitana once it finishes a drill program. The resource should be published by the end of next year.
Pena Blanca, meanwhile, is situated about 15 km northwest of La Gitana. It’s an epithermal gold-silver system discovered by Chesapeake in 2005. Chesapeake mapped and sampled only about 1 sq. km of the large 9 sq. km of hydrothermal alteration at Pena Blanca, with some promising results.
Trenching from an outcrop on the NW zone includes 23.5 meters of 2.26 g/t gold and 178 g/t silver.
Inomin acquired its 100% interest in La Gitana and Pena Blanca from Gunpoint Exploration (GUN:TSX.V) in exchange for 1 million shares, $25,000 cash, and a 1.5% net smelter return royalty (NSR) payable to Gunpoint on Pena Blanca. Inomin assumed an existing 3% NSR on La Gitana.
Inomin’s board is strong for a company with a $3M market cap. Gomez started a gold company in Colombia and has been involved with a few publicly listed juniors, including Fjordland Exploration, and earlier Mar-West Resources that discovered a gold deposit in Honduras and was subsequently acquired by a major gold company.
Directors John Peters and Bill Yeomans are both geologists who have spent more than 30 years working on gold projects throughout the world, while the junior’s advisory panel consists of veteran geologists Victor Jaramillo and Bruce Winfield. Management and insiders own about 18% of the company.
Inomin recently raised $400,000 in a non-brokered private placement of roughly 5.3 million shares at 7.5¢ each. It has enough cash to complete its current exploration work.
The junior has about 41 million shares outstanding fully diluted and trades in a 52-week range of $0.06 to $0.23.
DISCLOSURES
1) Brian Sylvester compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He and members of his household are paid by the following companies mentioned in this article: None. His company has a financial relationship with the following companies referred to in this article: None
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Cover photo: Lynx nickel project in British Columbia. (Image courtesy of Inomin Mines).
