CAVU Energy Metals Corp. (CAVU:CSE; CAVVF:OTC; 5EO:FSE), now aquired by Alpha Copper Corp. (CSE: ALCU;OTC: ALCUF), caught the attention of the global mining investment bank Red Cloud Securities, which initiated coverage on the company with a Speculative Buy rating, reported analyst Taylor Combaluzier in an August 11, 2022 research note.
"We like CAVU Energy Metals because it is a pure-play copper explorer with highly prospective projects located in tier-one jurisdictions in Canada," wrote Combaluzier.
The analyst pointed out that now is a good time for investors to position themselves in CAVU, given it is trading near its 52-week low, at CA$0.20 per share, and compared to peers, is undervalued on an enterprise value basis. For this latter reason, Red Cloud did not assign CAVU a target price
"We believe positive drilling results or additional discoveries could potentially help rerate CAVU's stock by a factor of up to about 10 times," Combaluzier commented.
CAVU should also benefit, he added, from the global shift toward electrification, requiring increased copper production and the expected rebound in copper prices.
Cavu is 'Well-Positioned'
CAVU has a portfolio of three highly prospective, early-stage copper projects in tier one jurisdictions in Canada, and Combaluzier described their status.
At one of them, the Hopper copper-gold (Cu-Au) porphyry-skarn project in the Yukon, CAVU completed an H1/22 drill program, following up on 2021 drill results. Results to date (some remain pending) from the Copper Castle skarn area and the Hopper Cu-Au porphyry area were "excellent," the analyst described. Based on the sum of the H1/22 results, CAVU may do more drilling at Hopper.
"We believe the company now has a good understanding of the geology at Copper Castle, and it should be able to grow the mineralized zones by targeting known or interpreted skarn horizons," wrote Combaluzier.
"CAVU is well-positioned to potentially make a significant copper discovery given the exploration success at Hopper to date and the blue sky potential at Star," Combaluzier noted.
Another project, Star, is a Cu-Au porphyry project in northern British Columbia (B.C.), in which CAVU owns 49% and has an option for the other 51%.
Situated in a region hosting several projects of this type and having been drilled historically over about 18,000 meters, Star has multiple drill-ready targets and potential for mineralization growth and new discoveries.
"CAVU is well-positioned to potentially make a significant copper discovery given the exploration success at Hopper to date and the blue sky potential at Star," Combaluzier noted.
The company's third project is 100%-owned Quesnel in B.C., acquired via staking. The property hosts exploration potential in its development targets.
Geology-Focused Management
Combaluzier highlighted some members of CAVU's leadership team. At the helm is exploration geologist and executive, Dr. Jacob (Jaap) Verbaas, as chief executive officer and director.
The vice president of exploration, Dr. Luke Bickerton, also is a geologist with base and precious metals exploration experience in Canada and worldwide.
"The senior leadership team at CAVU has strong geological credentials and experience implementing cutting-edge exploration strategies, which should serve investors well as the company works to make new discoveries at its Hopper and Star projects," indicated Combaluzier.
About the Stock
With a tight share structure, CAVU has 34.7 million (34.7M) shares outstanding with about 3M options and 21.1M warrants, Combaluzier relayed. Management owns 6.1%, and insiders have participated in recent financings.
The junior explorer has about $750,000 in cash and no debt.
Upcoming Needle-moving Events
Combaluzier provided CAVU's near-term catalysts. They include the rest of the results from the H1/22 drill program at Hopper and, subsequently, assays from an H2/22 drill campaign at the same project should the company opt to conduct one. As for Star, CAVU may release findings from its in-progress evaluation and analysis of historical project data.
Given its compelling factors, CAVU warrants consideration by investors, and now is a good time to get into this copper company, according to the analyst.
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1) Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures for Red Cloud Securities, Alpha Copper Corp., August 11, 2022
Red Cloud Securities Inc. is registered as an Investment Dealer in all Canadian provinces and territories, and is a member of the Investment Industry Organization of Canada (IIROC). Part of Red Cloud Securities Inc.'s business is to connect mining companies with suitable investors. Red Cloud Securities Inc., its affiliates and their respective officers, directors, representatives, researchers and members of their families may hold positions in the companies mentioned in this document and may buy and/or sell their securities. Additionally, Red Cloud Securities Inc. may have provided in the past, and may provide in the future, certain advisory or corporate finance services and receive financial and other incentives from issuers as consideration for the provision of such services.
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