Which Precious Metal Has Chen Excited for 2023?

Source: Streetwise Reports  (12/28/22)

It’s valued the world over as a precious metal, and now it’s in demand for the green economy. Which element has asset manager Chen Lin looking forward to the New Year?

SilverCrest is developing a 1,250-tonne-per-day processing plant at its Las Chispas Mine located in Sonora, Mexico, with initial proven and probable reserves of 94.7 million ounces (94.7 Moz silver equivalent (AgEq), placing it among the highest-grade primary silver projects in the world.

“I think 2023 could be the year for SILV as it advances the mine production,” Chen said.

The mine would have an initial life of 8.5 years. Analyst Phil Ker of PI Financial Inc. wrote on Dec. 8 that Las Chispas was expected to produce 9.9 Moz AgEq in 2023. Ker rated the stock Buy with a CA$14 target price.

“We believe a premium valuation is warranted and suggest investors continue to accumulate shares ahead of achieving positive cash flow from Las Chispas,” he wrote.

Sprott Asset Management LP owns 5.75% of the company, Gilder Gagnon Howe & Co. LLC owns 5%, Van Eck Associates Corp. owns 4.38%, ETF Managers Group LLC owns 3.46%, and Sprott Asset Management USA Inc. owns 2.94%, according to Reuters.

It has a market cap of US$934.66 million with 146.5 million shares outstanding, 140.6 million of them free-floating. It trades in a 52-week range of US$10.13 and US$4.58.

Chen says he also has other silver producers in Mexico, including MAG Silver Corp. (MAG:TSX; MAG:NYSE American) and GoGold Resources Inc. (GGD:TSX).

First Tellurium Corp.

Another element critical to solar panels is tellurium, one of the planet’s rarest elements. First Tellurium Corp. (FTEL:CSE) has two important tellurium resources at its Deer Horn project in British Columbia and its Klondike Tellurium project in Colorado.

“Governments are just starting to understand the importance of tellurium,” said First Tellurium President and Chief Executive Officer Tyrone Docherty. “It has flown largely under the radar, even though it’s essential for cadmium-telluride solar panels and new lithium-tellurium (Li-Te) batteries that could revolutionize energy storage.”

Chen said that North America is too dependent on foreign sources for the element.

“This metal can be in demand, this is a pure-play, and management just a lot of (its) own money in the stock,” Chen said.

Reuters has Docherty as the top shareholder in the company with 10.46%, Josef Anthony Steve Fogarassy has 1.38%, and Lyle Allen Schwabe owns 0.85%.

Its market cap is CA$9.44 million, with 72.7 million shares outstanding, 63.4 million of them free-floating. It trades in a 52-week range of CA$0.71 and CA$0.085.

Amyris Inc.

A returning favorite of Chen’s is Amyris, Inc. (AMRS:NASDAQ), a synthetic biotech company that “programs” cells to create sustainable ingredients.

The company has begun production at its new precision sugar fermentation plant in Brazil. The plant comprises five precision fermentation “mini-factories” that can produce 13 of Amyris’ molecules, which are used in everything from health and beauty products to flavors and fragrances.

Amyris is a frontrunner for the US$1 billion the U.S. Department of Defense will be investing in the bioindustrial domestic manufacturing infrastructure over the next five years. It’s part of the US$2 billion the U.S. government plans to spend to boost biomanufacturing under an executive order announced last month.
Amyris on Tuesday announced a US$500 million contract to supply two of its ingredients.

“If the stock is over US$5, I wouldn’t buy it,” Chen told Streetwise Reports. “But if it’s two and change . . .  it’s very good risk-reward.”

Amyris’ top shareholders include Foris Ventures LLC at 22.39%, The Vanguard Group Inc. at 5.98%, Koninklijke DSM NV at 5.06%, BlackRock Institutional Trust Co. N.A. at 3.57%, and Vivo Capital LLC at 2.35%, according to Reuters.

Its market cap is US$564.57 million, and it has 330.2 million shares outstanding, 234.2 million of them free-floating. It trades in a 52-week range of US$6.37 and US$1.44.

Viking Therapeutics Inc.

Viking Therapeutics Inc (VKTX:NASD) saw its stock price rise nearly 75% earlier this month when another company, Madrigal Pharmaceuticals Inc. (MDGL:NASDAQ), reported positive results from its Phase 3 clinical trial of its nonalcoholic steatohepatitis (NASH) treatment.

Viking is working on its own NASH drug and is holding a Phase 2b clinical trial. Shareholders are hoping for similar success.

The “situation is very good,” Chen said. “Most fund managers are on vacation. So, if you can get in before the end of the year when they come back . . .  they will start buying, and you can sell.”

The company is also running a Phase 1 clinical trial to develop a drug that could treat various metabolic disorders.

Ligand Pharmaceuticals Inc. owns 8.76% of Viking, the Vanguard Group Inc. owns 4.34%, Millennium Management LLC owns 4.05%, Balyasny Asset Management LP owns 3.49%, and Two Sigma Investments LP owns 2.47%, Reuters said.

Its market cap is US$651.47 million. It has 76.7 million shares outstanding, with 67.8 million free-floating. It trades in a 52-week range of US$8.63 and US$2.02.

TAG Oil Ltd.

In the energy world, Chen likes TAG Oil Ltd. (TAO:TSX) if you can take the risk that its projects are in the volatile Middle East and North Africa.

The company is initiating Phase 1 of a fracking program in Egypt in Q1 2023. It anticipates providing results as early as March.

“This seems to be a relatively low-risk fracking play,” Chen said. “The market value could increase at least tenfold.”

Askar Alshinbayev owns 10.99% of TAG Oil, YF Finance Ltd. owns 8.42%, Abdel Fattah Z. Badwi owns 2.06%, Shawn Reynolds owns 1.54%, and Suneel Gupta owns 1.03%, according to Reuters.

It has a market cap of CA$83.71 million with 154.6 million shares outstanding and 113.2 million free-floating. It trades in a 52-week range of CA$0.70 and CA$0.195.

Canacol Energy Ltd.

Another company returning to Chen’s list is Calgary-based Canacol Energy Ltd. (CNE:TSX; CNNEF:OTCQX), which is a major player in natural gas production and exploration in Colombia. Its stock dipped earlier this year when the country elected its first leftist leader, Gustavo Petro.

While Petro is against new oil and gas exploration, favoring elements needed for the green economy like copper and silver, the company has natural gas contracts that give it a dependable income.

BTG Pactual Affiliate Research analyst Daniel Guardiola rated the stock a Buy with a CA$5.50 target in November.

Canacol said it’s the largest independent onshore conventional natural gas exploration and production company in Colombia and that it supplies about 20% of the country’s natural gas.

Fourth Sail Capital LP owns 20.49% of Canacol, Cavengas Holdings S.R.L. owns 19.12%, Cobas Asset Management SGIIC SA owns 3.12%, Dimensional Fund Advisors LP owns 0.96%, and Abaco Capital Investments owns 0.27%, according to Reuters.

Canacol has a market cap of CA$353 million and 170.6 million outstanding shares, including 137.7 million free-floating. It trades in a 52-week range of CA$3.62 and CA$1.75.

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1) Steve Sobek wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.

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