Fancamp Exploration Ltd. (TSX VENTURE:FNC) (Pink Sheets:FNCJF) (Frankfurt:3F9) is the subject of a recently released advisory from mining analyst Jay Taylor of Hard Money Advisors Inc. Fancamp is a junior miner with ownership interests in several exceptional advanced-stage flagship properties. In short, Mr. Taylor believes "Perhaps upwards to a four-fold increase over current values could be enjoyed by shareholders as the market begins to discount very sizeable future royalty cash flows".
Heading into March 2014 Mining analyst Jay Taylor of Hard Money Advisors released an advisory to his paid subscriber base on the merits of establishing a long position in FNC.V and recommended they add FNC.V to their watch list. Mr. Taylor has a business MBA in Finance & Investment, in-depth accredited studies in geology, has decades of mining sector analysis under his belt, and is known for being reserved in his advice, thus investors should pay attention when he does decide a company is poised to appreciate in value and worth adding to watch list for superior return potential; FNC.V is now in that category.
Metals & Minerals Digest has summarized key valuation points on Fancamp Exploration Ltd. compiled from various sources, and provided select excerpts from Jay Taylor’s advisory. This review along with full copy of Mr. Taylor's advisory may be found at http://sectornewswire.com/MMFNC0314JT.pdf online.
4 main points why FNC.V presents opportunity for astute investors; Shares Outstanding: 139,189,153 (~171 million fully diluted).
1) FNC.V's current market cap is less than its securities & cash value, ignoring interests in multiple properties that are significantly advanced and poised to yield potentially impressive returns. The cumulative inherent value of these assets is large.
FNC.V currently has over $17 million in negotiable securities (in 3 partner
companies) and cash;
15,025,000 shares Champion Iron Mines (10.9%) $0.32/sh = $4.8 million
6,000,000 shares in Argex Titanium (4.5%) $0.82 a share = $4.9 million
43,000,000 shares in Lamelee Iron Ore (59%) $0.17/share = $6.6 million
+ FNC has ~$1 million cash in the bank (Figures as of early March 2014)
All that above is total value of $17.3 million = ~$0.125/share of intrinsic
value to FNC.V -- with FNC.V trading under that right now (and with no cash burn
issues) FNC.V is dramatically undervalued.
2) Substantial royalty payments on the horizon. The top near-term two being;
A) A 1.5% NSR on Champion Iron Mines (= ~$12+ million a year to FNC.V once in
production at 20mtpa, mine of life royalties = $273M).
B) A 2% NSR on Argex project La Blache (up to 4% after two years) (=$3.50
million a year/$7.00 million a year, life of mine revenue = $168 million to
FNC.V).
3) No capex required by FNC.V to eventually reap substantial potential revenue
from multiple advanced-stage properties that FNC.V originated and has since
vended.
4) FNC.V is also advancing toward potential spin-off/IPO on other properties it has, including its Iron-Titanium-Chromium-Vanadium Magpie deposit, it ranks among the world's largest undeveloped titaniferous magnetite deposits.
Excerpts from Jay Taylor's advisory on Fancamp Exploration Ltd.:
"The company holds assets that are of significantly greater value than the market cap of this company. For example, its equity holdings of three companies alone in which it owns shares are worth more than its market cap as outlined above. But that’s not all. In addition to that, the company holds property and royalty interests in many projects, the most advanced of which it holds is a 10% equity interest in Champion Iron Mines Ltd. plus a 1.5% NSR."
"For those of you who may have viewed Altius as too expensive for your taste when I recommended it a few months ago at a price 35% lower than now, FNC appears to offer a penny play that may be as undervalued or even more so than Altius. I consider FNC to be a “baby Altius.” As such, it is worth watching its progress."
"The current equity holdings alone are worth approximately $17.5 million,
compared to the company’s recent market cap of around $14 million. As
explorations and development continues, more value may well be added going
forward. Suffice it to say, based on equity holdings alone in these three
companies, with zero value given for future cash flows from royalties or the
many other properties the company owns that it is in the process of farming out
to other firms, this stock is currently undervalued."
Based on: CHAMPION IRON MINES LIMITED (CHM 15.025 million @ $0.35); ARGEX
TITANIUM INC (RGX 6 million @$0.82);LAMELEE IRON ORE LTD (TSX.V-LIR 43 million @
$0.17)
"THE BOTTOM LINE – This stock on the basis of its holdings in Champion Iron
Mines, Argex Titanium, and Lamelee Iron Ore alone, is undervalued by
approximately 15%. But if you allow value for future cash flows from royalties
and the many other holdings this company has in eastern Canada, even in a
continuing lackluster market like the current one, a case could be easily made
for a double in this stock from its current price. Longer term as production
nears and risk is reduced, it is not unrealistic to anticipate much higher
valuations. Perhaps upwards to a four-fold increase over current values could be
enjoyed by shareholders as the market begins to discount very sizeable future
royalty cash flows. My only reservation in not adding this stock to my list now
is my relatively bearish macroeconomic view on the global economy. That is why I
favor gold and silver shares over base metal and industrial metal companies. If
you disagree with that outlook or if you think my view is wrong, you may want to
consider adding these undervalued shares into your portfolio simply as portfolio
insurance through diversification. As for now, I will keep a watchful eye on
this company, which under less stressful times would without doubt make it on my
list as a buy."
The full review along with full copy of Mr. Taylors advisory may be found at http://sectornewswire.com/MMFNC0314JT.pdf online.
Metals & Minerals Digest has identified the following research links for those wishing to conduct further research on Fancamp Exploration Ltd.:
Corporate website: http://www.fancampexplorationltd.ca
SEDAR filings: http://sedar.com/DisplayProfile.do?lang=EN&issuerType=03&issuerNo=00004414
Insider buying: http://canadianinsider.com/node/7?menu_tickersearch=FNC+|+Fancamp+Exploration
(Note: FNC.V has been under accumulation by insiders)
Recent mining journal article: http://miningmarketwatch.net/fnc.htm
Recent (March 1, 2014) research report: http://sectornewswire.com/report0301-2014FNC.pdf (12 month price target
C$0.75/share)
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Editor in Chief
Metals & Minerals Digest
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