Resource stocks of all sizes can be extremely fickle creatures. It is this trait of volatility that sucks in even the most experienced investor as news can come at any moment about drill results that can send a stock moving rapidly one direction or the other. Scouring the web and gleaning whatever possible from other savvy traders, investors that love the resource plays have all felt the worst of pains and the best of bliss.
Some companies do maintain a beta far from zero, however. These are typically lower float, low outstanding share plays that tend to run under the radar of the investment community, although that does not discount what they have to offer. A good example would be Red Metal Resources Ltd (OTCBB:RMES), a junior exploration firm with a primary focus in the massive copper reserves held in Chile.
As the long-standing king of copper, Chile boasts reserves and production that leaves all other countries chasing its coat tails. With projects located in the prolific Candelaria iron oxide copper-gold belt of Chile's coastal Cordillera, host to Freeport-McMoRan's Candelaria Mine and Anglo American's Mantoverde Mine and trading with only a minute 3.9 million shares in its float and a $10-million market cap, Red Metal has eluded the eyes of many traders, but is moving forward with Chilean developments that harkens attention.
Red Metal has been savvy enough to target areas that have already undergone exploration and shown strong potential by other exploration companies in the past. Recent news has showcased the exploration efforts on its Mateo property located in III Region, Chile where earlier work included 16,144 tonnes of rock being mined that averaging 3.2% copper, 43.7 grams per tonne silver, and 0.72 grams per tonne gold.
All tallied, Red Metal’s portfolio contains four Chilean projects that all hold substantial promise with a significant amount of exploration work already having been conducted in one of the world’s most prolific copper-gold regions.
Today, Red Metal announced results from their 2,233-metre, 11-drill-hole drill program on the Farellon Property, III Region Atacama, Chile. The Farellon project, a property consisting of four mining and exploration concessions totaling 1,096 hectares, has been explored with previous work outlining a 1.7-kilometre strike length of known mineralization hosted in a mineralized fault zone along strike from the historic Carrizal Alto mine.
The reports today further supported the possibilities of future production with cuts being disclosed that included strikes intercepting 13 metres grading 2.51% copper including eight metres grading 3.95% copper and 0.53 g/t gold. Also notable was drill hole FAR-11-006 which showed 32 metres at 1.35% copper and 1.35 g/t gold.
There’s an old adage about being careful with those that are quiet as they can be the most dangerous. Red Metal Resources is quietly going about its business and while the word "dangerous" would have to be used in a synonymous manner with "explosive" in this particular sense, Red Metal could end up being one of those companies that lets investors experience the bliss of investing in resources as they continue to progress with their Chilean exploration efforts. Proper due diligence, as always, is encouraged.
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