MoneyTalks is Stockhead\u2019s regular drill down into what stocks investors are looking at right now. We\u2019ll tap our extensive list of experts to hear what\u2019s hot, their top picks, and what they\u2019re looking out for.<\/p>\n
Today we hear from Alto Capital investment manager Tony Locantro.<\/p>\n
With the implosion of battery metals prices last year, high interest rates and uncertain demand from China, investors are more shy about punting on junior resources stocks than they have been in years.<\/p>\n
In over 25 years advising on resources stocks, Alto Capital investment manager Tony Locantro says he has never seen valuations as low as they are at the moment.<\/p>\n
\u201cWe have a lot of gold companies with gold in the ground,\u201d he said.<\/p>\n
\u201cNormally, enterprise values were $30-40 an ounce, sometimes now they\u2019re $10-20. The gold stocks are dirt cheap. There\u2019s no real interest in funding high risk-high reward exploration at the moment outside of really the lithium sector. <\/p>\n
\u201cSo we\u2019ve had we\u2019ve had a two speed spec market. We\u2019ve had lithium and rare earths on a tear, gold, copper, silver and base metals absolutely poleaxed for the last two years.\u201d<\/p>\n
As far as Locantro is concerned, the lithium stock bubble has \u2018well and truly burst\u2019.<\/p>\n
Lithium concentrate prices have fallen from over US$8000\/t early last year to US$850\/t today at spot rates.<\/p>\n
\u201cThese announcements on lithium don\u2019t generate the dopamine hit that they did previously,\u201d Locantro says.<\/p>\n
\u201cI think a lot of the lithium companies now coming out with announcements, it\u2019s like turning up to a piss up at 3am and you get offered a vegan pizza, no one wants it.\u201d<\/p>\n
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Instead, Locantro sees the market\u2019s eyes shifting to previously unloved commodities like gold and copper.<\/p>\n
\u201cI think the money\u2019s going to move towards gold,\u201d he said. <\/p>\n
\u201cI think gold exploration, gold M&A, and it doesn\u2019t matter what commodity you find, if you have a big discovery you\u2019re going to get rerated. <\/p>\n
\u201cAnd I think for a lot of these stocks to start to see some interest, we need greed, we need people to talk about their wins, we need a positive attitude. <\/p>\n
\u201cAnd that will take time, but it only takes one big announcement and it\u2019s game on and that\u2019s what I\u2019ve seen over over my career.\u201d<\/p>\n
Locantro was at the RIU Explorers Conference in Fremantle this week, where he said a number of explorers on show were looking heavily underrated right now.<\/p>\n
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Locantro rates Red Metal as his \u2018stock of the year\u2019.<\/p>\n
\u201cI\u2019d call it the multivitamin of junior exploration companies, it\u2019s just got everything going for it,\u201d he said.<\/p>\n
\u201cThey do have a rare earths discovery near Mt Isa, which looks fantastic and the metallurgy has come in, size isn\u2019t a problem.<\/p>\n
\u201cAnd they also own 52% of Maronan Metals (ASX:MMA)<\/a>, which I believe is one of the best undeveloped silver-lead resources in the country.<\/p>\n Locantro disclosed him and his clients are strongly represented on the Red Metal register.<\/p>\n \u201cAnd it\u2019s run by professionals, Rob Rutherford has kept a tight structure, he\u2019s always said he wants a small company with a big share price so for me, we are as full as a State School in Red Metal.\u201d<\/p>\n \u00a0<\/p>\n <\/span>\u00a0<\/p>\n \u00a0<\/p>\n Unrelated to Locantro\u2019s work, he sees plenty of potential in WA gold explorer Alto Metals, which has cultivated a 1.05Moz bounty of gold around the historic but underexplored gold field of Sandstone.<\/p>\n \u201cI don\u2019t think the market\u2019s appreciating the gold resources that (MD) Matt Bowles and the team are building. We do have some other companies in that region,\u201d he said.<\/p>\n \u201cThe other one active there\u2019s Aurumin (ASX:AUN)<\/a>, we have companies such as Westgold (ASX:WGX)<\/a> around so I do think that at some point, the Sandstone region might start to come to some sort of prominence. <\/p>\n \u201cFor a lot of the major companies going out and buying ounces is a lot cheaper than drilling and going through the process of putting something into production. <\/p>\n \u201cSo I think we\u2019re going to see another surge in M&A, especially in the junior gold sector. Alto Metals looks one to look at.\u201d<\/p>\n \u00a0<\/p>\n <\/span><\/p>\n \u00a0<\/p>\n Uranium prices are sitting at over US$100\/lb for the first time since the last boom in 2005-2006, a moment of rapid upward stock movements in yellowcake Locantro says was only rivalled by the Dot Com boom of the late 1990s.<\/p>\n He likes Athabasca Basin explorer Basin Energy.<\/p>\n \u201cI did do a little bit around the IPO,\u201d he said. <\/p>\n \u201cPete Morehouse, ex-Alligator Energy seems to be mobilising for a big drilling campaign and some of the biggest uranium mines are in that Athabasca region of Canada. <\/p>\n \u201cI think the punters are going to be keen for uranium after they lick their wounds from from the lithium sector.\u201d<\/p>\n \u00a0<\/p>\n <\/span><\/p>\n \u00a0<\/p>\n Another commodity Locantro says is ripe to see rerates is the copper sector.<\/p>\n \u201cFor all the hype around copper, the Australian copper juniors just see no love, share prices have capitulated,\u201d he said.<\/p>\n There are a couple of sold off copper juniors on the Alto radar.<\/p>\n \u201cThere is a junior here called Stavely Minerals, which I\u2019m very interested in based on the fact that they made the Cayley Lode discovery in 2019,\u201d Locantro said.<\/p>\n \u201cShares ran to about $1.30. Now they\u2019re trading at 3.3-3.4 cents and I think there\u2019s been that much pressure on the company, the market knows that cash is low in a lot of these juniors and I think here is a chance for (MD) Chris Cairns maybe to come out and say well, \u2018wait a minute, we\u2019re still focused on the Cayley Lode and those large copper projects\u2019. <\/p>\n \u201cHe\u2019s also making a lot of noise around Hawkstone, which is nickel. But as I mentioned earlier, it doesn\u2019t matter what commodity you find, if you make a big discovery, the market will rerate you.\u201d<\/p>\n The other is Arizona focused Eagle Mountain Mining, which is running a new scoping study on its Oracle Ridge project in Arizona, where it boasts a resource of 28Mt at 1.35% copper, 11.06g\/t silver and 0.16g\/t gold.<\/p>\n \u201cAnother dollar $1.30 to 6c stock, backed by Charlie Bass, it\u2019s got a good resource in Arizona,\u201d Locantro said.<\/p>\n \u201cThey\u2019re looking at low cost, environmentally friendly copper production. And I think the copper cycle upswing could be perfect for Eagle Mountain Mining. <\/p>\n \u201cThey are doing a rights issue at present at six cents with an option. So that\u2019s another one I think that you can look at from a contrarian viewpoint.\u201d<\/p>\n \u00a0<\/p>\n <\/span> The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead. Stockhead does not provide, endorse or otherwise assume responsibility for any financial product advice contained in this article.<\/em><\/p>\n At Stockhead we tell it like it is. While Red Metal, Maronan Metals, Basin Energy and Eagle Mountain Mining were Stockhead advertisers at the time of writing, they did not sponsor this article.<\/em><\/p>\n <\/span><\/p>\n The post MoneyTalks: Why these dirt cheap explorers are catching the eye of Alto Capital\u2019s Tony Locantro<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"Red Metal (ASX:RDM) and Maronan Metals (ASX:MMA) share price today<\/h2>\n\n
ALTO METALS (ASX:AME)<\/a><\/h2>\n
Alto Metals (ASX:AME) share price today<\/h2>\n\n
BASIN ENERGY (ASX:BSN)<\/a><\/h2>\n
Basin Energy (ASX:BSN) share price today<\/h2>\n\n
Stavely Minerals (ASX:SVY)<\/a> and Eagle Mountain Mining (ASX:EM2)<\/a><\/h2>\n
Stavely Minerals (ASX:SVY) and Eagle Mountain Mining (ASX:EM2) share prices today<\/h2>\n\n
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