2017 Top Picks Update (June 19, 2017)

by FI Fighter on June 19, 2017

in Copper, Copper Update, Lithium, Lithium Updates

Prior to the start of the year, I participated in the 2017 CEO.CA Stock Picking Contest. Here’s an update on my performance to date.

As of 6/16/17.

Through the first half of the year, I’m in the top 30… Yay, 28th place!

Why do I bring all this up to you now?

Check this out.

Can you identify the stock that sticks out like a sore thumb?

As readers know, I don’t like to chase assets up to the moon… When something starts hitting 52 week highs, I start to get nervous…

It doesn’t matter if I have skin in the game or not…

At some point, I will start to look at trimming down some shares of Critical Elements (CRE.V/CRECF).

The rules are the rules.

Buy low and sell high.

Compared to its lithium peers (Pilbara Minerals; PLS.AX/PILBF, Altura Mining; AJM.AX/ALTAF, Nemaska Lithium; NMX.TO/NMKEF, Lithium Americas; LAC.TO/LACDF, etc.), I don’t think Critical Elements is overvalued at all for where the company is at as far as development goes, but if this uptrend keeps on persisting…

Well, eventually, the risk vs. reward will cause me to say goodbye…

Quite frankly, the growing gap between Critical Elements vs. Birimian Limited (BGS.AX/EEYMF) is only making me more bullish on the latter.

Both companies control really good assets, which rank among the best undeveloped lithium (hard rock spodumene) projects out there today.

Critical Elements Rose Deposit.

Birimian Limited Goulamina Deposit.

Not apples-to-apples, of course… Critical Elements is far more advanced stage, but both projects are already plenty large enough (300k+ tonnes of total contained lithium oxide) to support (justify) full-scale commercial production… And both projects feature: low iron content, low mica content, near surface mineralization… The Rose deposit features some of the best recoveries in the industry… Goulamina, in contrast, still needs to spend a lot of time and energy devoted to metallurgical testing (improvements/refinements)… but Goulamina has higher grade lithium (even when accounting for Rose’s tantalum by-products which go into factoring the Li2O Eq. percentage).

Anyway…

The key difference here is that Critical Elements has (and has had) a really strong management team in place running the ship that knows what it’s doing. Birimian, on the other hand, was until most recently steered by a bunch of assclowns that have thankfully all been forced to resign; the new team is quietly restoring confidence into beaten down and battered shareholders.

Right now, CRE.V/CRECF is trading at over 4x the market cap of BGS.AX/EEYMF!

Assuming there aren’t any serious skeletons (fatal flaws) lurking inside of Birmian’s closest that we don’t know about, when shares come out of their trading halt (hopefully sometime in the next 2 weeks), opportunistic investors/speculators will have a hell out of a time comparing projects/valuations/upside potential/etc. within the lithium space.

With everything I know as of right now, I really can’t see better value currently out there than BGS.AX/EEYMF.

Please note: Birimian’s Goulamina deposit is located in Mali, nowhere near as good (or safe) a jurisdiction as Quebec, where Critical Elements’ Rose deposit is stationed… So, of course we need to factor in some kind of discount rate to Birimian shares due to the consensus “riskier” jurisdiction (fair or not).

Nevertheless, we’re talking about Birimian sporting a sub A$50 million market cap for a sizable + high-grade lithium asset (27.8Mt @ 1.42% Li2O) that still has lots of exploration potential to unearth!

Critical Elements was a story that the market was asleep on for the longest time…

It’s funny how this game works…

But if you’re bullish on lithium, now is the time to start doing the research.

Should we indeed see Lithium Boom 2.0 later this year (let’s say after Tesla’s Model 3 final unveiling event), I’m very bullish on the prospects of Birmian shares getting re-rated significantly…

I absolutely don’t know shit about anything, let’s not forget that…

However, we all did just witness the drastic re-rating that happened for CRE.V/CRECF…

Is this a sign of things to come for other “laggards” in the sector?

For the sake of 28th place on the 2017 stock picking contest, I sure hope so!

 

C’mon BGS.AX/EEYMF, get your act together… You’ve got a ton of ground to make up!

 

Happy Hunting!

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{ 1 comment… read it below or add one }

1 VinNo Gravatar June 22, 2017 at 3:35 am

Interesting post! Much appreciated and keep up the good work/results.

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