Johnston-Sequoia Capital Corporation is engaged in the business of assisting nano-cap corporations with institutional targeting, market intelligence, buy-side advisory & venture capital. The model is tailored specifically to companies with:
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In the Middle of Every Difficulty Lies Opportunity
One year ago QMM shares were trading close to $1.80. They closed yesterday at $0.52. Last Friday it traded 627,000 shares in the U.S. It certainly appears that the market has turned against this company. In short, the stock is for sale.
This turn of events would be more understandable if the company held no assets or had mismanaged the discovery process. That is most definitely NOT the case.
Recently we learned that Rob McEwen will develop a 12 billion pound, $2 billion copper deposit in Argentina. We believe that Quaterra’s Yerington is as good a project because it is in Nevada and has two former mines (Yerington and MacArthur) on the property. These include an economic and reasonably near term resource of 1.8 to 2 billion pounds of acid leachable oxide copper and chalcocite ore.
...In addition, Quaterra has valuable strategic relationships with Freeport McMoran on two properties (Tintic Copper and West Texas Moly) and a significant and funded exploration relationship with Goldcorp in Mexico. To some extent Quaterra has become Goldcorp’s exploration arm in Mexico.
I won’t try to estimate a value on QMM’s shares. Suffice it to say that I believe that shares, given the above asset acquisitions and discoveries, are worth more than $0.52, a lot more.
Either investors don’t know the story or they don’t believe it. I am, however, certain that the asset values are significant. We need Quaterra to get the word out in the form of an action plan that these assets can be monetized and that production, especially from Yerington, will be forthcoming – soon.
One danger, of course, is that with its currently depressed share price these assets could be taken away from investors who have been in the stock for years. – including yours truly.
At present investors are making their decisions based on worry, angst and anger. This is understandable. It is evidence of what Nobel Laureate Daniel Kahneman calls our brain’s System 1 knee jerk reaction in his excellent book, “Thinking: Fast and Slow,” a must read.
In the near future the company has indicated that several 43-101 / PEA’s will be forthcoming perhaps in the April time frame. Given the progress at Yerington, Nieves and Herbert Glacier, these announcements should increase the resource sizes and the category in each case.
We think Quaterra management must now come out aggressively and address the market’s current concerns and change its perspective of the company. This will require a bold move by management to perhaps monetize or announce near term (2 year?) production at Yerington.
In his analysis of the Yerington project after a site visit last September, analyst Christopher Ecclestone placed an NAV on all Quaterra’s assets of $1.43 about 3 times today’s price."
--- Dr. Michael Berry
|A very favorable Margin of Safety Pattern?|
- Quaterra's MacArthur Copper Deposit: Contains an expanding measured plus indicated and inferred resource of 2,277,300,000 lbs of copper
- Quaterra/Blackberry's Nieves Silver Project: Contains an NI 43-101 measured plus indicated and inferred resource of 85,000,000 ounces of silver
- Quaterra/Singatse Peak Yerington Copper Deposit: Contains 696,000,000 lbs of copper in the original open-pit with and additional 136,000,000 lbs of copper adjacent to the pit
- GoldCorp/Quaterra's Strategic Alliance: The Investment Framework Agreement signed by the companies provides Goldcorp with an option to acquire an interest in any mining properties held by or acquired by Quaterra in central Mexico (except the Nieves silver project) in return for funding a two year generative exploration program through a private placement investment of US$10 million in the Company.
- Freeport-McMoRan Copper and Moly Joint Ventures: Cave Peak is considered one of the best and highest grade, undeveloped molybdenum prospects in the U.S. Last year Quaterra signed an earn-in agreement with Freeport-McMoRan Mineral Properties Inc. ("FMMP") of Phoenix, Arizona, in respect of Cave Peak. In the terms of the agreement, FMMP has the exclusive right and option to acquire a 70% ownership interest in the Cave Peak project by paying 2011 land holding costs on behalf of the Company and by subsequently spending US$5 million on exploration over four years ending in 2015.
We own shares in Quaterra Resources - As always please do your own due diligence.
***The material herein is for informational purposes only and is not intended to and does not constitute the rendering of investment advice or the solicitation of an offer to buy or sell securities. The foregoing discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (The Act). In particular when used in the preceding discussion the words “plan,” confident that, believe, scheduled, expect, or intend to, and similar conditional expressions are intended to identify forward-looking statements subject to the safe harbor created by the ACT. Such statements are subject to certain risks and uncertainties and actual results could differ materially from those expressed in any of the forward looking statements. Such risks and uncertainties include, but are not limited to future events and financial performance of the company which are inherently uncertain and actual events and / or results may differ materially. Mr. Johnston owns shares in Terraco Gold Corp., Senesco Technologies Inc. & Sama Resources Inc. Johnston-Sequoia Capital Corporation ("Johnston-Sequoia") owns shares in Terraco Gold Corp. & Sama Resources Inc. Johnston-Sequoia is a paid advisor of Terraco Gold Corp., Sama Resources Inc., Northern Vertex Mining Inc. & Touchstone Capital Inc. Johnston-Sequoia was formerly a paid advisor ofTalison Lithium Ltd., Salares Lithium Inc. & Kootenay Silver Inc. We cannot attest to nor certify the correctness of any information in this research page. Please consult your financial advisor and perform your own due diligence before considering any companies mentioned in this informational webpage.
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