Posted on October 6, 2021 by Scott Shuda
Shares of QC Copper and Gold (OTC: QCCUF) have been on a tear over the last month. The principle driver was the release, last week, of its initial Mineral Resource Estimate on the Opemiska Project located in the Chibougamau District of Quebec. QCCUF reported, the “Mineral Resource is pit-constrained and contains more than 532,000 tonnes or 1.17 billion lbs of copper and 816,000 ounces of gold in the Measured & Indicated (M&I) classification and an additional 109,000 tonnes or 240.3 million lbs of copper and 209,000 ounces of gold in the Inferred classification.
On September 30, I sat down with Breakout Investor, Christopher Hampton, for a 10-Minute podcast where we discussed the implications of the report. To say that we were excited about our investment would be an understatement. Shortly thereafter, Christopher shared his valuation model for QC Copper, taking into account only the initial resource estimate, while noting that the project will continue to grow, and will likely ultimately be several times larger than currently disclosed in the published reports.
To get to that future, management has been clear that they will dedicate themselves to continuing resource studies. Christopher has expected that the company would raise capital to finance such studies, and today he was proven correct. This press release, issued by QC Copper this morning, announces that the company will seek to raise CAN$4 million or more via the sale of new equity at a price of CAN$0.60 per share. This is a bit startling, given that the current trading price for QCCU (the stock’s ticker on the Toronto Exchange) is only CAN$0.42. The explanation can be found with this post on the Breakout Investor Platform (BIP), explaining the elements of “Flow-Through Shares.”
A second press release out this morning, announces that QC Copper will seek to monetize a portion of its equity stake in uranium exploration company, Baselode Energy (TSXV: FIND) (OTCQB: BSENF). QC Copper CEO, Stephen Stewart is quoted saying, ““Based on the recent success of Baselode Energy and strong investor demand for its shares, we received numerous offers to privately purchase our Baselode position. We remain significant investors in Baselode, and are focused on ensuring that its shares are placed in the right hands. We see this transaction as an very attractive opportunity to place some of our Baselode shares in the hands of highly-reputable, institutional investors while adding a substantive non-dilutive cash injection into QC Copper.”
It has often been noted that prior to last month’s announcement relating to the initial Resource Estimate, QC Copper’s stock price was so low, it barely covered the value of the company’s equity in Baseload Energy. If the company successfully places a portion of its shares in Baseload, it should follow that investors will properly value both QC Copper’s resource assets AND the value of its continuing stake in Baseload.
Please join us on the Breakout Investor Platform (BIP) for discussion and analysis of QC Copper and many other great smallcap stocks with near-term catalysts.
Disclosre: I am long QCCUF and might buy or sell shares at any time.