Ok. I’m previewing my newest idea here first. Been working nonstop on due diligence since it came across my radar. Not fully done but imminent news could be major catalyst so you decide, can a) buy before PRs hoping for big pop which may not happen or b) be prepared to buy after PR that could significantly derisk the value dispersions.
Copper is at the confluence of EV/renewable bubble overinvestment, economic stimulus, a supply deficit and low inventories. You know I am
invested in OCO.V...
... I believe that DBG.V can be a 10x-30x. It’s 100% owned Hat property has early exploration drilling success and 3DIP conducted and paid for by Hudbay (before it ran into cash flow issues and cut many exploration plays loose in mid 2019) suggestive of a copper, gold, cobalt & misc resource of 4+ billion tons of ore. It could be bigger than Red Chris mine nearby that recently sold for implied $1.1 billion. DBG.V’s current market cap is only $25 million. The CEO & affiliates own 30%...
... although he comes off as a bit promotional (trying hard to get word out), the CEO is credible and was formerly on the BOD of a major gold discovery that sold to Osisko for ~$350 m several years ago.
Many incoming press releases include assay results from their H-36 deep hole to 975 meters dead center on their massive 3DIP anomalies. They have a 100% success rate drilling into their 3DIP targets so far. Also Cobalt recovery results that would add tremendous value to this Cu/Au resource...
... after Hudbay wanted to renegotiate their $40 m commitment to earn up to 65% interest in the Hat property, the CEO cancelled the agreement and raised his own funds. Company has ~$5 m for a season of high impact drilling starting in March. This massive resource extends beyond the 3DIP in all direction too and is only the sourthern part of the property. Just massive. CEO claims to have been offered other JVs and $20 m in equity financing but turned down to limit dilution at low SP...
... one sell side analyst valued a small amount of the Hat property’s potential resource tonnage using public comps per ounce of gold and arrived at $4.50 per share before applying a 90% subjective downward risk factor to result in $0.45 per share. It trades at $0.25 currently.
It could be an epic flop, so do your own DD but I believe the odds are fairly reasonable they prove a massive resource beginning with the near term press releases. I’ll take shots at 10x-30x with a 75% chance of success.
Oh, and if you do decide to buy, please post it all over WSB on Reddit afterwards 😂
And just to give you a sense of how massive it’s potential is, here is the little colored 3DIP box in the south end of the Hat property. Notice the pink anomalies cutoff in all directions at the edge of the survey box? Yeah, 4 billion tons of resource ore may be just the beginning.
It also trades in the US but with very low volume: DBLVF
And if you think it’s outlandish to think 10x-30x check out one of their neighboring peers in the Golden Triangle in Van BC:
@KeyserSoze Thanks a lot for sharing here first! Going to dig right in. Hope you'll wait a day before sharing, cause twitter doesn't use limit orders😅 .
Company also has a telegram chat, looked around and found this report:
@dasahib I may wait until news comes out that meets/beats my expectations to post to Twitter. Like I said, it could be disappointing news but likely not. If it’s good news, the Twitter folk will miss the first pop but the risks could melt away so maybe even better risk adjusted return opp at that point.
@dasahib And, yes, I have been speaking with the author of that document as part of my DD. He has been a tremendous help getting me up the learning curve here. He knows his stuff about the company. Every detail, every question.
I’ve been looking hard for red flags including fraud or paid promotion or illegitimate info, etc... Only found a few yellow flags so far. It appears all legit with maybe a little too much promotional vibe by this author and the CEO who are both big shareholders.
@KeyserSoze His research has been great to read too! Still trying to understand everything but if h-037 proves a higher grade, and they're able to expand the dimensions we're looking at something big.
True, but don't think that's neccessarily a bad thing. Educating shareholders like d4 does reduces overreaction and volatility of the stock a lot, just like Mariusz and OCO.
@dasahib I have peppered D4 every which way to Sunday with questions/attacks. I have secretly joined his Telegram group to see if he is an honest/accurate reporter of our discussions. Everything he has responded/said appears to be honest, and I’ve been able to independently verify a lot of his explanations of the yellow flags from other source documents that cannot be fraudulent.
There’s always a risk of fraud somewhere but haven’t found it here yet. There is a risk of geology disappointment.
@KeyserSoze haha I've joined his Telegram group too, always good to know what they are thinking on the otherside. You just got mentioned in the group now too😂 .
What were some of the things you flagged?
Obviously end of Hudbay option agreement: was it due to disappointment or issue at property? No IMO.
Tribe interferes with drilling in 2015. Ongoing problem? No IMO.
CEO forced to resign from 3 BODs in 2012 due to an administrative proceeding. Pumper/fraudster/ongoing issue? No IMO.
@dasahib He is basically a less polished and unknown version of Mariusz who only does junior miners. I am impressed with his level of knowledge on this company. He knows EVERYTHING about it like a true concentrated value investor hunting elephants. Smart guy. His reports could use less gold and less exclamation points and all caps and “predictions” though 😂 He is trying to make a name for himself and this will surely do it if he is right (and I am right since I don’t outsource DD and theses).
@dasahib He has been in the stock for a few years and I know his holding size and cost basis. Like Mariusz, he will make $10+ m on this if he is correct. He knows the CEO well and has obviously followed for years. The Hudbay agreement (although ended prematurely due to Hudbay’s issues IMO) is a stamp that the property’s potential is legit (not some fraud) and that the CEO is legit. They were going to spend $40 m to earn up to 65% (implies a value 2x today’s share price) years ago.
@KeyserSoze You've just got to be impressed by guys like him and Mariusz. The amount of due diligence you have to do to find this one life changing gem is astounding.
haha the titles are so terrible too.
I think 2x is a pretty fair value for the company today too, we'll need to see how things develop before a higher price can be justified. But, at this size we should slowly start to see some institutional interest develop too.
@dasahib Rumor is that Eric Sprott (who owns a bunch of Tudor) wanted to invest $20 m in DBG’s last PIPE but CEO declined because he didn’t want massive dilution. I can’t verify that rumor so...
@dasahib I was shown a screenshot of who has viewed a certain “report” on the company on LinkedIn. Many people at some big mining firms. Again, it doesn’t look photoshopped but who knows and maybe they looked at it to laugh not due to interest so...
@KeyserSoze He also shared the screenshot in the group, and keeps mentioning Sprott and the similarity to Tudor in his reports.
I still have doubts about him and the validity of his claims, but can't deny his knowledge on the company.
He says he's working on something big rn, my guess is he's just pitching it to institutionals or newsletter groups.
@dasahib Yes, well I’ve been trying to reject the null hypothesis that he’s a paid promoter or in on a fraud with the CEO. He seems genuine and not paid from my research. He has accurately described to his group my discussion with him (I never told him I joined the group to watch) and how many shares I bought already. He claims to have also been talking to a mining celebrity with 25k followers. I think that’s what he’s working on that’s “big”.
@dasahib I also believe this author would have stopped talking to me/folded under my incessant questioning long ago if he was in on a fraud. I believe the Hudbay agreement could not be a fraud and so any fraud would have started after it ended. If its the case somehow that Hudbay reneged because of a real issue, I just don’t see the CEO not taking another JV that eliminated needing to spend more $ but still salvage millions for himself rather than launching a new Bre-X that lands him in jail.
@KeyserSoze Well, did not post there but I decided to take a position in this one.
@jarto 👍 I was joking about Reddit. Cross fingers on the next few press releases. Odds vastly stacked in our favor that they will be positive IMO but you never know 100%.
LODE is insane today. I’m out of that one for the time being.
@KeyserSoze Just a minor correction - the market cap is somewhat closer to C$46.8M fully diluted (US$36.535), about 45% higher than US$25M
(there's a pretty hefty stack of warrants and options)
This is a good idea. I like the number of near-term catalysts. I just worry about being able to build a meaningful position easily - the liquidity, even on the primary exchange, seems to extremely limited.
@canterburyln Thank you, yes I was sloppy in rounding to $25 m on market cap. Good news is there will many millions in cash for drilling when those warrants get accelerated and options exercised. It almost doesn’t matter here as the “success” case means values of $250 m - $2.5+ billion depending on shade of success. Yes, high end of success outcomes make it larger than Red Chris. I would just conservatively assume 250 m FD shares outstanding at the time of monetization (i.e. sale to a major).
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