Regulus Resources (Vancouver: REG) (RGLSF) is a Canadian exploration company formed in December 2010 under the directorship of the former management of Antares Minerals, explains Gerardo Del Real, editor of Resource Stock Digest.
The same Antares that was sold to First Quantum Minerals (Toronto: FM) for approximately C$650 million, primarily for the giant Haquira Cu-Mo-Au deposit in Peru.
The team is top notch. Regulus is led by CEO John Black. John is an economic geologist with more than 30 years of exploration experience in the Americas, Central Asia, the SW Pacific, and Eastern Europe/Western Asia.
Regulus has approximately 101.8 million shares outstanding and a market cap of approximately C$101.8 million. The 100% owned Flagship AntaKori Copper-Gold Project is located approximately 600 km north of Lima and 50 km northwest of the city of Cajamarca, on the world-class Miocene Au-Cu-Ag belt of northern Peru.
The Antakori copper-gold-silver project boasts 5 billion pounds of copper (across all categories), 4.5 million ounces of gold (across all categories and 128 million ounces of silver (across all categories). The resource is high-grade near surface and has a very low strip ratio.
The best way to command a significant premium is to pressure potential suitors by optimizing what’s already there and by demonstrating that the longer it takes for a potential suitor to make a competitive offer, the more copper-gold-silver the company is likely to find.
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The macro backdrop for Regulus — with $2,000 gold, $3.60/lb. copper and $27 silver — is as good as it’s ever been. The company provides excellent leverage to higher prices, but even if prices just stay at current levels, Regulus should be trading at multiples of today’s prices.
There are numerous catalysts that will force a re-rating of shares including a resource estimate planned for 2021 which is expected to lead to a phase 3 drill program and then a pivot towards a Pre-feasibility project.
Make no mistake, Regulus is a clear takeout target and I believe AntaKori is taken out at a significant premium sooner rather than later.
Meanwhile, my two Top Picks from last year — Midas Gold (Vancouver: MAX) (MDRPF) and Hannan Metals (Vancouver: HAN) (HANNF) — closed the year up 91% and 94%, respectively. Though each performed extraordinarily well, the best days are still ahead for each company.
I expect Hannan to continue to develop multiple targets prospective for copper-silver discoveries and expect those targets to yield significant discoveries for years to come. Midas Gold meanwhile just refreshed its board of directors at John Paulson & Co. request and the move indicates that Midas Gold is a clear takeout target that is now in play.
