CMC Metals Ltd. (CMCXF)

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CMC METALS RESEARCH REPORT

Found on www.juniorminingpro.com

CMC Metals Ltd. (CMB:TSX Venture)
Shares Outstanding: 34,545,819
Options: 1,000,000
Warrants: 3,745,000
Fully Diluted: 39,290,819
Share Price (09/12/16): $0.11

CMC Metals (CMB:TSX Venture Exchange) is an emerging Canadian junior mining company, which we believe is on the verge of a major upward move in the short term.

CMC’s strategy is to acquire and develop past producing mines, then rehabilitate and put them back in production, thus generating dilution-free cash flow for shareholders.

The company currently has two advanced projects in it’s portfolio – The Radcliff mine in Southeastern California, and the Silver Hart mine in the Yukon, near B.C.’s border. Both mines come with similar fundamentals, in that they were both highly profitable during the time they were active. The mines were shut down decades ago due to extremely low gold and silver prices, and have since been abandoned.

With the recent major resurgence in precious metals prices, Radcliff and Silver Hart are once again looking like attractive opportunities for a savvy management team to develop and exploit.

If you have been paying attention to the resource sector, particularly gold and silver exploration and mining companies, you will have noticed hundreds of companies have seen their share prices surge 100%, 200% and up to 1000% in many cases.

We are very interested in CMC Metals as it has been largely overlooked by the investment community, and major upside still remains.

Early this year the company started a restructuring process, positioning itself for future success. Shares were rolled back 7 for 1 in February, followed by a $1,550,000 private placement at 0.10/share in June. 30% of the financing was subscribed for by insiders, revealing their confidence in the direction which the company is headed.

Following the financing, management was quick to move forward with rehabilitation of both mines, while also working diligently on putting their 100% owned Bishop Mill (close to the Radcliff mine) into operation.

Over the past few years, CMC has been able to realize approximately $1 million in revenue by processing stockpiled ore from past operations. Fast forward to today, with the recent restructuring, financing and progress on both mines, as well as Bishop Mill, we foresee a rare opportunity for investors to ride the wave of success as CMC moves toward realizing positive cash flow from all operations.

The Radcliff Mine currently features a total resource of 300,000 oz Gold at an average grade of 3 g/t (an attractive grade for open pit). Approximately 84,000 oz of gold (valued at $101 million USD @ $1,200 Gold) are located in high grade “gold pods” within this deposit, averaging 22 g/t! The immediate plan is to extract high grade ore from the first gold pod, which contains about 24,000 ounces of gold in 22,000 tons of rock. This is anticipated to take 1.5 years to complete, generating nearly $30,000,000 in revenue at $1,200/oz gold. The other gold pods are nearby (100-150m from pod #1), and will be mined out following completion of Pod #1.

Additionally, CMC is actively in the process of restarting their 100% owned Bishop Mill. Once operational, the company plans to generate further revenue via toll processing ore from surrounding local mining operations.

Our own paper napkin estimates show that Radcliff, together with Bishop Mill, can potentially generatie $16 million USD/year to CMC for the next 4 years.

Outlook for Gold



The case for a bullish outlook on gold is stronger than it’s been in decades. Not a week goes by without a giant hedge fund manager warning about dangers in the global economy. Warren Buffet has more money outside the markets than ever before in his five decades at the helm of Berkshire Hathaway. Geopolitical tensions around the world are increasing.

Not since 1999 and not since 1929 before that, have so many billionaires, central bankers, financial elites and fund managers, warned that we are on the verge of a catastrophic bust.
Joe Baratta, Blackstone Group LP’s top private equity deal maker, admits at a WSJ conference this week, “You have historically high multiples of cash flows, low yields. I’ve never seen it in my career. It’s the most treacherous moment.”

Any one of dozens of geopolitical or financial triggers can set off a massive run on physical gold, causing a historic rise in its price. It is certainly within the realm of possibility, even probability, to see gold trade above $2,000/ounce within 12 months.

Our financial estimates for CMC Metals’ Radcliff project use $1,200/ounce gold as a basis for calculations. When the price of gold starts running, we anticipate shares of CMC Metals are going to make a parabolic run.

Technical Analysis

CMC Metals is still a relatively unknown junior mining company. However the chart shows a very bullish pattern, as volume average has increased while keeping the share price bouyed and rising. Once the mid-teen pricing has been cleaned up by new investors, we anticipate shares in CMB will make a strong move upwards as mining operations begin and cash flow commences.



We encourage all potential investors to further their research through the company’s website.