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As the 31st of December, 2017 arrived, my wife, my 15-month old daughter, and myself were in Colmar, France. The famous village has one of the most picturesque Christmas markets in Europe and a special atmosphere for children, as it is full of amusements and theme playgrounds.
As we put my daughter to bed for the last time in 2017, I decided that one of my goals for 2018 was to open a brokerage account in her name.
My wife and I discussed the details later that evening as we prepared for the countdown for the New Year, when she told me that it had to be a one-of-a-kind portfolio strategy. “Every 2-3 years, we’ll have to bank profits and pay the larger expenses, associated with her life, using the gains. We’ll always keep that same principal in place, though, so we can repeat the process.” she said.
This idea isn’t new. Many investors use it in the bonds market or in private lending. They can’t risk the principal and they want the funds available in 2-3 years, so they invest it in liquid assets with a high guarantee that the principal is not in jeopardy.
But, what my wife wanted me to create is a hybrid between this strategy of short-term investments and the wild gains, now available in resource sector. Her vision was that I focus specifically on stocks that are currently undervalued and have a 2-3 year masterplan to be taken over for a premium.
You see, not only is gold, the barometer of all commodities, cheap and historically undervalued compared with the S&P 500, but within the hard assets sector itself, the junior miners are historically cheap compared with the underlying commodity.
There’s never been, in 100 years, a more defining moment for hard assets and the companies that produce them.
I told my wife that it would take me weeks to find the ideal company, which would be our daughter's first-ever stock, if such a company even exists. My requirements were:
- I would have to completely trust the management team and know them personally.
- The stock would have trade at least 40%-50% discount to its direct peer group.
- The shareholder base would have to include at least one major resource legend, which has deep involvement with the stock.
- The jurisdiction must be the safest there is.
- There must be a major short-term catalyst and a definite plan in motion to advance towards a buyout in 2-3 years.
These are truly abnormal times for the resource sector because I thought that I’d never be able to meet these strict thresholds, but I couldn’t settle – not when it comes to picking the ideal stock for my daughter’s portfolio.
The barbaric bust cycle in commodities has made it possible for us to make a killing. I’ve set aside a 5-figure sum, which I’ll deploy this week with the objective of making a serious return in a 2-3 year timeframe.
The underlying commodity is experiencing acute shortages – that’s why it’s up 90% in years.
This is the one, which I’m buying on behalf of my own daughter – consider owning Callinex Mines (TSX-V: CNX & US: CLLXF).
This is the only company that checks all of the 5 mandatory requirements, but what jumped out most during my research was how silly-cheap it is.
CEO Max Porterfield, who I’ve known for years, and I, went through the list of all pure zinc plays and our conclusion was that Callinex Mines could rally just to catch up with its peer group that trades 274% higher – that’s a potential 64% discount for CNX – unreal!
Then, we zoomed in on its closest direct competitor and the premium it had on Callinex was 551%. Put differently, this company is 81% cheaper than the most similar stock is.
What made this ideal, though, was the timing. Not only is zinc up 29% in 2017 and going into backwardation on the futures markets, like silver did when it was unstoppable in 2011, but Callinex Mines will be releasing its most important news in a matter of weeks.
Consider Making Callinex Mines (TSX-V: CNX & US:CLLXF) your GO-TO Stock for a Takeover Potential Set Up.
We can’t ask for a more ideal scenario with Callinex Mines (TSX-V: CNX & US: CLLXF).
I’ve thought long and hard before deciding to take action this week, especially when it comes to a strategy specifically designed to create exceptional gains within a tight timeframe.
It had to be a company that has been disregarded by the market – this is always the key to finding undervalued businesses – a period of despair creates situations, which normally would not exist in terms of the cheap valuations available today.
The other lesson I’ve learned over the years is that the market quickly changes its mind. Commodities go through extremes – investors love them and then the next thing you know, they sell them for the next hot tech fad.
This greed and fear pendulum is our ticket to locking a position at a genuinely low price.
As you can see, comparing Callinex Mines with its direct peer, Osisko Metals, shows just how much upside we have in front of us – this is rare.
I’m not the only one who has uncovered this anomaly. Carlo Civelli, who many of you know, since one of his natural gas companies made it in the Guinness Book of World Records (twice), is not only a major shareholder, but also presides as the Chairman of the company’s Advisory Board!
His success with the sale of PNG, his natural gas and oil company, which netted $900M, isn't his first achievement or even his biggest.
Carlo Civelli has seeded over a dozen companies that have grown into $1B market cap companies including GoldCorp, B2 Gold, and Uranium One.
Callinex Mines has a market cap of only CAD$30M today. To have a person of the caliber of Mr. Civelli is truly unusual and can only be attributed to the fact that he sees a potential mother lode when they put the business up for sale.
Right next to Callinex Mines sits the famous 777 mine. This region called Flin Flon, in Canada, is where every mining company in the world hopes to have the instinct and the connections to land a deal.
Over 50% of deposits here have been advanced to production, totaling 32 mines, which have led to 86 consecutive years of mining.
The industry standard is 1 out of every 3,000, in comparison.
Over $1.6 billion has already been invested towards mine development with road, rail, and power and water infrastructure to facilitate quick development of new discoveries.
It’s no fluke and certainly no coincidence that Mike Muzylowski, who has been involved in the discovery of 12 VMS mines in the Flin Flon district of Manitoba, Canada, is their key geologist and owns a big position in the company.
Mike received the 1988 PDAC Developer of the Year award and is a 2011 inductee into the Canadian Mining Hall of Fame – this is the apex in geology and mineral expertise.
Their flagship asset within the district is the result of careful planning as well. You see, the 777 mine will be depleted in less than 4 years – this is the key component to this strategic location. Hudbay, the owner of the 777 mine, will look to replace their mine with the most promising project in the vicinity – that’s exactly where Callinex Mines (TSX-V: CNX & US: CLLXF) comes in.
To top this off, this isn’t even their most advanced project!
Their Nash Creek project, which is in the final stages of receiving its PEA (Preliminary Economic Assessment), should make it clear to any potential bidder that Nash Creek could become a cash flowing mine in one of Canada's most prolific districts
Q1’s Top Zinc Alert:
Consider Callinex Mines (TSX-V: CNX & US: CLLXF) NOW!
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Legal Notice: This work is based on SEC filings, current events, interviews, corporate press releases and what we've learned as financial journalists. It may contain errors and you shouldn't make any investment decision based solely on what you read here. It's your money and your responsibility. The information herein is not intended to be personal legal or investment advice and may not be appropriate or applicable for all readers. If personal advice is needed, the services of a qualified legal, investment or tax professional should be sought.
Never base any decision off of our advertorials. Wealth Research Group stock profiles are intended to be stock ideas, NOT recommendations. The ideas we present are high risk and you can lose your entire investment, we are not stock pickers, market timers, investment advisers, and you should not base any investment decision off our website, emails, videos, or anything we publish. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this profile was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. Never base any investment decision from information contained in our website or emails or any or our publications. Our report is not intended to be, nor should it be construed as an offer to buy or sell, or a solicitation of an offer to buy or sell securities, or as a recommendation to purchase anything. This publication may provide the addresses or contain hyperlinks to websites; we disclaim any responsibility for the content of any such other websites. Wealth Research Group and its affiliates, have been compensated three hundred thousand dollars for a twenty eighteen marketing campaign directly by the Callinex Mines. We are also shareholders of the company and consider the position a long term holding. Never base any decision off of our emails.
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