NIA first announced that its President Gerard Adams was accumulating a position in Benton Resources (TSXV: BEX) on March 24th at $0.055 per share. The last NIA stock suggestion that he invested in was Ascot Resources (TSX: AOT), which exploded from NIA's October 31st suggestion at $0.51 per share to a high on January 6th of $0.98 per share for a gain of 92.16% in only ten weeks. BEX has so far gained by 27.27% to a closing price yesterday of $0.07 per share, but this is absolutely nothing because we estimate that BEX's current fair value is $0.20 per share.
BEX only has 87.07 million shares outstanding up from 83.82 million shares outstanding two years ago. BEX's dilution over the last two years has been a miniscule 3.88% and almost all of it came from BEX having a small private placement on December 27, 2019 at $0.075 per share.
BEX's CEO Stephen Stares has purchased hundreds of thousands of shares in recent months. Most recently, over the two trading days of February 20-21, he purchased 60,000 shares in the open market at $0.09 per share or 28.57% above BEX's current share price. Clearly, he must also recognize that BEX is trading for well below its fair value, with its biggest catalyst in history coming in early April!
BEX's market cap at $0.07 is only $6,094,900. BEX's cash position combined with equity holdings is currently worth $6,994,790.
However, worth even more than BEX's cash and equity holdings... BEX owns 100% of 5 major mining projects, not including 3 additional mining projects that are currently being optioned by BEX to other companies including two optioned to Rio Tinto (the second largest mining company in the world). BEX also owns a huge portfolio of royalties.
BEX has a cash position of $1,698,613 and no debt.
BEX owns 24,615,884 shares of Clean Air Metals (AIR) for a 19.68% stake in the company. AIR will go public in April on the TSX Venture exchange under the symbol AIR. In February, AIR raised $15 million in a private placement at $0.20 per share. The February private placement issuance of 75 million shares accounts for 60% of AIR's 125,095,884 shares outstanding. Based on the private placement price of $0.20, BEX's AIR shares are worth $4,923,177.
BEX owns 4,200,000 shares of Quadro Resources (TSXV: QRO). At QRO's current share price of $0.06, BEX's QRO shares are worth $252,000.
BEX owns 2,000,000 shares of Maxtech Ventures (CSE: MVT). At MVT's current share price of $0.055, BEX's MVT shares are worth $110,000.
BEX owns 100,000 shares of Canadian Orebodies (TSXV: CORE). At CORE's current share price of $0.07, BEX's CORE shares are worth $7,000.
BEX owns 200,000 shares of White Metal Resources (TSXV: WHM). At WHM's current share price of $0.02, BEX's WHM shares are worth $4,000.
BEX's 100% Owned Projects are worth an estimated $5,750,000:
BEX owns the Saganaga Gold Project located in the Shebandowan greenstone belt. A 2006 drilling campaign conducted at Saganaga by Teck Cominco achieved two spectacular intercepts of 5.36 g/t gold over 20m for 107.2 grammeters of gold and 32 g/t gold over 5.6m for 179.2 grammeters of gold. A 2012 drilling campaign conducted at Saganaga by BEX intercepted 5.513 g/t gold over 8.2m for 45.2 grammeters of gold. We conservatively estimate the Saganaga Gold Project to be worth $2,000,000.
BEX previously owned the land that now contains the largest undeveloped palladium project in North America: the Marathon Palladium Project, which is 51% owned by Generation Mining (CSE: GENM) and is located within the Coldwell Complex, the largest alkaline intrusion in North America with a diameter of 25 km. BEX currently owns the Coldwell West project, which is located within the Coldwell Complex to the west of Marathon and to the south of Plato Gold (TSXV: PGC)'s Pic River Palladium Project. In February 2020, PGC saw its market cap increase by $4.09 million after acquiring control of the Pic River Palladium Project. We conservatively estimate the Coldwell West Project to be worth $1,500,000.
BEX owns the Abernethy Gold Project located 10km southwest of Kenora, Ontario. A drilling campaign conducted by BEX has identified a large gold system of multiple gold-rich horizons that measures more than 500m in strike length. BEX's drill hole ABE11-07 intercepted 0.53 g/t gold over 77.1m for 40.86 grammeters of gold. A historical drill hole at Abernethy intercepted 6.3 g/t gold over 6.1m for 38.43 grammeters of gold. We conservatively estimate the Abernethy Gold Project to be worth $1,000,000.
BEX owns the Armit Lake Project. In 2008, BEX conducted a drilling program at Armit Lake. Drillhole 08 intercepted 1.57% nickel and 0.08% cobalt over 7.8m beginning only 32m downhole. Drillhole 07 intercepted 23.03 g/t gold over 1.5m for 34.55 grammeters of gold beginning 100m downhole. We conservatively estimate the Armit Lake Project to be worth $750,000.
BEX owns the Goodchild Project located north of the Marathon Palladium Project. Previous samples taken from Goodchild have contained nickel grades of up to 12.6% with palladium+platinum grades of up to 1.8 g/t. We conservatively estimate the Goodchild Project to be worth $500,000.
BEX's Option Agreements currently deserve $1,670,000 in value:
For Maxtech Ventures (CSE: MVT) to gain 100% ownership of its flagship Panama Lake gold project in Red Lake, Ontario it will need to make additional payments to BEX (in either cash or stock) between October 2020 and October 2023 totaling $600,000.
On October 25, 2016, BEX entered into an option to joint venture agreement with Rio Tinto (RIO) on BEX's Bark Lake palladium, platinum, nickel, and copper project. The agreement gave RIO the ability to earn a 70% stake in Bark Lake by making five annual payments of $10,000 totaling $50,000 and spending $3,000,000 on Bark Lake exploration. BEX has received the first three annual payments from RIO totaling $30,000 with the next $10,000 payment due on October 25, 2020. After RIO makes the fifth and final payment to BEX on October 25, 2021, it will have a choice of either entering into a joint venture with BEX for Bark Lake on a 70%/30% basis or RIO can increase its stake by 10% and enter into a joint venture with BEX on a 80%/20% basis by agreeing to make an additional cash payment to BEX of $100,000 by November 24, 2021. If RIO exercises its second option to increase its stake to 80%, RIO will also be required to cover 100% of the joint venture's first $5,000,000 in Bark Lake exploration expenditures. On May 25, 2018, RIO issued a very positive Bark Lake summary report to BEX indicating that it completed an initial 3 drill hole drilling campaign totaling 408 meters at Bark Lake with its drill hole QTBL0001 intercepting 0.39 g/t palladium, 0.33 g/t platinum, 0.16% nickel, and 0.31% copper over 19.2m beginning only 37.3m below surface. Considering RIO's very strong initial drilling results, we expect RIO to complete its next two payments totaling $20,000 and to exercise its second option at a cost of $100,000 to increase its stake to 80%. However, in an effort to be conservative, we will assume that RIO enters into a joint venture with BEX on a 70%/30% basis without exercising its second option. Therefore, BEX currently deserves value for the $20,000 it is owed from RIO as well as 30% of the $3,000,000 in exploration expenditures that RIO must complete by October 25, 2021 to earn its initial 70% stake. This means BEX conservatively deserves $920,000 in value for Bark Lake.
On January 2, 2019, BEX entered into an additional option agreement with Rio Tinto (RIO) giving RIO the right to earn a 100% interest in BEX’s Baril Lake palladium, platinum, gold, nickel, and copper project located approximately 5km west of BEX's Bark Lake project. RIO paid BEX an initial $25,000 for Baril Lake in January 2019. BEX received its one year anniversary option payment of $25,000 from RIO in January 2020. For RIO to complete its option agreement with BEX and earn a 100% interest in Baril Lake, RIO must make additional payments to BEX between January 2, 2021 and January 2, 2023 totaling $150,000.
Possible Commercial Production Payment of $1,000,000 Currently Deserves $100,000 in Value:
When Baril Lake reaches commercial production, RIO must make a $1,000,000 cash payment to BEX. We believe BEX currently deserves $100,000 in value for this possibility.
BEX's NSR royalties currently worth $2,919,500:
BEX owns a 0.50% royalty covering both of Clean Air Metals (AIR)'s high-grade palladium projects Thunder Bay and Escape Lake. Based on AIR's February private placement price of $0.20 it has a current market cap of $25 million. We estimate the market currently values royalties in a project 10X higher than equity in the same project. Therefore, we believe BEX's 0.50% royalty in Thunder Bay/Escape Lake is currently worth 5% of AIR's market cap or $1,250,000.
BEX will retain a 2% royalty covering Maxtech Ventures (CSE: MVT)'s flagship Panama Lake gold project. MVT currently has a market cap of $3.64 million that it is receiving for its flagship Panama Lake gold project. We estimate the market currently values royalties in a mining project 10X higher than equity in the same mining project. Therefore, we believe BEX's 2% royalty in Panama Lake is currently worth 20% of MVT's market cap or $728,000.
BEX owns a 1.50% royalty covering a 3km area of interest or approximately 50% of Quadro Resources (TSXV: QRO)'s flagship Staghorn gold project, which is located 30km away from Marathon Gold (TSX: MOZ)'s flagship Valentine Lake gold project. QRO currently has a market cap of $2.39 million that it is receiving for its flagship Staghorn gold project. We estimate the market currently values royalties in a mining project 10X higher than equity in the same mining project. Therefore, we believe BEX's 1.5% royalty covering 50% of the Staghorn gold project is currently worth 7.5% of QRO's market cap or $179,000.
BEX will retain a 2% royalty in RIO's Baril Lake project. RIO will have the ability to buyback 50% of BEX's Baril Lake royalties at a cost of $1 million. Very conservatively, we believe BEX deserves $100,000 in value for the 1% royalty that RIO will have the ability to buyback plus $200,000 in value for the 1% royalty with no buyback provisions. Therefore, BEX on a very conservative basis deserves a total of $300,000 in value for the royalties it will retain in Baril Lake.
BEX owns a 1.5% royalty covering a 500 hectare property located on the southwest border of its Goodchild project that is now owned by Canadian Orebodies (TSXV: CORE). We estimate this royalty to be worth $37,500.
BEX owns a 1% royalty covering the Providence copper, nickel, palladium, and platinum project located in the Northwest Territories within 70km from the Diavik Diamond Mine. BEX sold the project to Matador Capital for $150,000 and we estimate the 1% royalty to be worth 10% of this amount or $15,000.
BEX owns a 2% royalty covering the Alder East project owned by Sokoman Iron Corp (TSXV: SIC). BEX sold the project to SIC for $200,000 and we estimate the 2% royalty to be worth 20% of this amount or $40,000.
BEX owns a 2% royalty covering the Shebandowan project owned by White Metal Resources Corp (TSXV: WHM). We estimate BEX's royalty to be worth $10,000.
BEX owns a 1% royalty covering approximately 20% of Matador Mining (ASX: MZZ)'s flagship Cape Ray gold project. MZZ has an $18 million market cap. We estimate BEX's Cape Ray royalty to be worth $360,000.
All together, BEX deserves to be trading with a market cap of $17,434,290. This would equal a BEX share price of $0.20! We expect BEX's fair value to increase significantly after AIR begins trading in April!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA's President has purchased 1.05 million shares of BEX in the open market. He intends to buy additional BEX shares prior to Clean Air Metals going public. Sometime after Clean Air Metals goes public he intends to sell his BEX shares for a profit. This message is meant for informational and educational purposes only and does not provide investment advice.