In yesterday’s trading, shares of Omineca Mining and Metals Ltd. (OMM:TSX.V; OMMSF:OTCMKTS) jumped by almost 50%; albeit after an ugly and relentless erosion that still has shares way below their peak of mid-2020. That was catalyzed by news released before yesterday’s open. I’ll speak to that briefly below.
I have been questioned—and occasionally criticized—for sticking with Omineca during this time (though we are still about three times ahead of things from when I first recommended this gold-oriented explorer/developer at around C6 cents/share, many who acted belatedly have been less fortunate.) But as I have explained along the way, when I see a broken stock but a company that is NOT broken, I tend to stick with it.
And if I may say, my near 70% batting average over the years on speculative stocks, which for now (but maybe not much longer!) is Omineca’s moniker in The National Investor, vindicates my patience the great majority of the time.
One reason I have been fortunate to have such a ratio is that I make it a point to get to know not just stories, but companies/management teams well. Over my career there has not been a better example of this than the MacNeill family; nor a group that has been more profitable for my Members at The National Investor.
The late Bill MacNeill was a dear friend, mentor and colleague; and the founder years back of the former Claude Resources, a long-operating gold mine in Saskatchewan. It was bought out by SSR Mining in 2016 and has since been fulfilling Bill’s long-held belief that the Seabee Mine anchored a district play.
Son Ken has for years been the C.E.O. of the former Shore Gold; more recently renamed Star Diamond (TSXV-DIAM). It years ago was established as one of my Top 10 picks of all time: we got into it and another diamond explorer (later absorbed by Shore) in the Fort a la Corne area of Saskatchewan around C10 cents/share and sold most several years at around C$5.00 give/take. That latter was as Ken’s work established that this area containing the largest kimberlites in the world also—contrary to previous views—likely held far better grades and qualities of diamonds than had been thought.
Today, Rio Tinto is Star’s senior J.V. partner on this project as it moves into the home stretch toward development.
Ken’s brother Tom’s day will still come, I believe, with Omineca, of which he is the CEO.
The most important thing to understand here is that the rationale for my initial recommendation of Omineca HAS NOT CHANGED. Its land holdings in the north part of British Columbia’s resurgent Cariboo District represent two major opportunities, each of which—not to mention in tandem—can move the needle tremendously in the end for a company whose market cap is a mere C$24 million as of yesterday’s close.
Its Wingdam Project was long the “core” for Omineca. Narrowing things down below from the above regional/district map of the Cariboo, that Wingdam trend parallels those just to the east in the old Barkerville area, where Osisko has built a multi-million-ounce gold resource (and counting.)
Prompting yesterday’s rally, Omineca announced that the first part of the story is finally nearing fruition. With the necessary permit extension from the B.C. government in hand at long last, we are likely not many weeks away from the first gold being pulled from the underground paleo channel there (I have written about the details and nature of this unique deposit previously in The National Investor and for Streetwise Reports alike.)
But even after my own initial recommendation of Omineca, a second story emerged: and that is, the hunt for hard rock-hosted gold around Wingdam from which the underground paleo placer channel-held gold came. On this score, Omineca announced back on December 8 that a new and expanded round of drilling is soon to begin.
So again: one reason it is important to know a company and its management is to be able to KNOW when a story has changed; or when circumstances have simply delayed it. Over the last two years a combination of Canada’s and the province’s FAR more draconian COVID-related restrictions…last year’s historic flooding and high water…and in recent months, the wait for a permit extension which only just came…have combined to delay the pulling of gold from underground. Now things are moving forward without those headaches (though we still can’t rule out some continuing/added new measures as Canada is one of the countries overreacting to the so-called Omicron variant.)
That earlier chart on OMM is through Wednesday’s close. It won’t shock me to see some who are paying NO attention to the company sell into this 50%+ bounce of yesterday. That will likely end up being a BIG mistake, however, if no other unforeseen delays emerge and it is—at last—"all systems go” for Omineca.
Chris Temple is editor and publisher of The National Investor. He has had an over 40-year career now in the financial/investment industry. Temple is a sought-after guest on radio stations, podcasts, blogs and the like all across North America, as well as a sought-after speaker for organizations. His ability to help average investors unravel, understand and navigate today's markets is unparalleled, and his ability to uncover "off-the-radar" companies is likewise. His commentaries and some of his recommendations have appeared in Barron's, Forbes, CBS Marketwatch, Wall Street's Best Investments/The Cabot Group, Kitco.com, the Korelin Economics Report, Benzinga.com, Palisade Radio, Mining Stocks Education, Mining Stock Daily, and other media.
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1) Chris Temple: I, or members of my immediate household or family, own securities of the following companies discussed in the broadcast: Omineca Mining and Metals Inc. I personally am, or members of my immediate household or family are, paid by the following companies discussed in the broadcast: None. My company has a financial relationship with the following companies discussed in the broadcast: None. Chris Temple's and The National Investor disclosures are listed below. Chris Temple's and The National Investor disclosures are listed below.
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