Co.'s Spate of Events Raises Eyebrows

Source: Streetwise Reports 10/15/2024

A recent flurry of activity and a new chief executive officer make this Canadian explorer worth watching, a newsletter writer pointed out. Read on to learn what all this junior has been up to.

For Rex Resources Corp., a British Columbian (B.C.) mineral explorer that went public in June 2021, the last five months have been a whirlwind of activity after a lull.

"This type of situation can be intriguing to investors" Kyle Kuzyk, newsletter writer for Equity Guru, wrote in an Oct. 4 article. "Rex Resources Corp. is definitely on my watchlist."

At the start of 2024, the Canadian mining junior owned one asset, the Rex property, which it had acquired in May 2023, according to a May 18, 2023 news release. The property consists of eight contiguous mineral claims over 1,562 hectares (1,562 ha) near Port Alberni on Canada's Vancouver Island in B.C.

The Rex property hosts multiple mineral occurrences that have yielded multiple gold and silver mineralized surface rock samples including assays between 3.6% to 13.9% copper, with limited or no diamond drilling follow up. With the prices of gold, silver, and copper significantly higher than 2006 when the project last saw significant exploration, the surface sampling results are clearly of interest.

Looking at the price highs in 2006 and today's prices, gold was US$982 per ounce (US$982/oz) versus US$2,637/oz, silver was US$14.94/oz versus US$30.90 and copper was US$3.90/oz versus US$4.45/oz.

"These higher commodity prices, combined with projections of continued strong demand, could potentially alter the economic assessment of the property" added Kuzyk.

Accomplishments Since April 2024

Raised Capital: In April, Rex Resources raised gross proceeds of CA$257,500 in a nonbrokered private placement, in which it issued 5,150,000 (5.15M) units at CA$0.05 per unit, as noted in an April 25 news release. Each unit consisted of one common Rex Resources share and one-half of one common share purchase warrant. The company indicated it would use the funds for general working capital purposes.

Received Technical Report: An NI 43-101 technical report was completed on the Rex property on June 17, and it indicates the presence of copper and gold mineralization as well as skarn and massive sulphide-type base metal mineralization there. Results of geochemical soil sampling and geophysics showed the known mineralization extends further than previously thought, suggesting the potential for areas of previously undiscovered mineralization.

To continue evaluating the potential of the Rex property, the report pointed out, follow-up work, consisting of the evaluation of geophysical targets, geological mapping, and grid expansion, should be done.

Acquired Asset: Soon after, Rex Resources acquired the nearby Mactush property, about 1.5 kilometers south-southeast of the Rex property, a June 25 news release outlined. Like Rex, Mactush encompasses eight mineral claims, too, but these are contained within 275 ha.

Exploration work carried out at Mactush dates to 1968 and includes extensive prospecting; soil, silt and rock sampling; limited trenching; geophysical campaigns; and limited percussion and diamond drill programs.

Appointed Director: In July, Rex Resources appointed Michael Leahy as a director and audit committee member, as announced in a July 3 news release. Leahy has 12-plus years of entrepreneurial experience and expertise in business and corporate development, as well as operations in a range of sectors, including natural resources.

He is the chief executive officer (CEO) and a director of Goat Industries Ltd. and a director of Panther Minerals Inc. Previously, he was vice-president of business development and later chief operating officer at a private firm known for its proprietary satellite radar technology used in mineral exploration, subsurface three-dimensional modeling and infrastructure monitoring.

Obtained IR Services: In another move, Rex Resources engaged consultant Earl Hope to provide investor relations services for one year at a cost of CA$3,000. The purpose is to increase market awareness of Rex Resources, expand its reach in the investment community, communicate the benefits of and generate interest in owning its stock.

New CEO: Sometime around late August/early September former CEO of Defense Metals Corp. DFMTF Craig Taylor became Rex Resources' CEO, Chair and Director.

"This transition is significant, given Taylor's track record" Kuzyk wrote.

Applied for Permits: Last month, Rex Resources announced in a Sept. 18 news release it was preparing applications for permits to conduct preliminary exploration work at the Rex and Mactush properties.

Rex Resources currently is reviewing the available historical data to prioritize upcoming exploration work, the company said in the release.

Appointed Director: Most recently, at the start of this month, Rex Resources appointed Kristopher J. Raffle, exploration geologist, as a director and qualified person of the company, according to an Oct. 1 news release.

Raffle, born and raised on Vancouver Island, is an exploration geologist with 25-plus years of experience evaluating projects, designing exploration programs, analyzing data, and doing geologic modeling in association with numerous types of deposits in North America. Currently, he is a partner and principal geologist at APEX Geoscience Ltd. and a director of Monumental Energy Corp. Previously, he was a director for Defense Metals Corp. and New Placer Dome Gold Corp.

Positive Outlook for Trio of Metals

Gold: Now at all-time highs, gold is about to "go into vertical melt-up mode" once it breaks above roughly US$2,800/oz, Technical Analyst Clive Maund wrote in a September 26 report. As such, "the gains in all gold-related investments at this time should be spectacular."

Gold equities specifically offer an "incredible opportunity" currently, wrote U.S. Global Investors' Frank Holmes in a Sept. 26 Investing.com article, because they are not trading at levels reflecting the continuing rise of the yellow metal's price.

Brien Lundin of Gold Newsletter touted a specific type of mining stocks in an Oct. 2 article. "From a fundamental standpoint, everything seems to be turning in favor of gold" he wrote. "We're in a long-term, secular bull market. And we need to be positioned for it. One of the best ways, of course, is through high-quality junior mining equities."

Looking ahead at the gold price, Goldman Sachs forecasts it to be US$2,900/oz in early 2025, reported Mint in a Sept. 30 article, supported by slowly rising exchange-traded funds flows with interest rate cuts in the West and in China and increased central bank buying.

Throughout 2025, other experts estimate the gold price will range from US$2,800–3,200/oz, according to a Sept. 25 Skilling article. Longer term, analysts predict it could reach US$6,800/oz by 2040, representing a 7.2% annual rate of return.

"The clear winner over the next year or so is likely to be gold" wrote Adrian Day of Adrian Day Asset Management in his Q3 Portfolio Review. "Both sentiment and the macro environment are turning in gold's favor, with much more to come."

Silver: Silver still is cheap, and the best investment opportunity right now is in silver equities, Kitco News wrote in a Sept. 27 article. "Although silver-related large-cap miner and royalty streaming stocks have experienced outsized gains during the recent silver surge, many quality silver juniors are still presenting low-risk entry points" noted the article.

Amelia Xiao Fu, head of commodity markets at BOCI, told Kitco she expects to see silver reach US$37/oz. "Silver is going to continue to rally over the coming quarters because of the [Federal Reserve's] consecutive rate cuts and as China's stimulus could continue for some time" she said. China's recently announced stimulus is its largest since the pandemic, the article noted.

Peter McGuire, CEO of XM Australia, also believes silver at US$32/oz is "extraordinarily cheap" he told The Economic Times. "If you are looking at the gold:silver ratio, I think there is more upside for silver than there will be for gold" he added. "And once it starts to bite, it is really going to be onward and upward because, quite simply, you have got a huge demand."

Copper: Demand for copper is "unstoppable" wrote Marin Katusa of Katusa Research in a recent article. "Investors, take note: The train could leave the station with copper stocks any day now." Driving demand is the green energy transition, as copper is used in solar panels, wind turbines, electric grids, electric vehicles, and more.

Even though carmakers are reducing the amount of copper they are using in electric vehicles to effect cost savings, copper demand from the sector is still projected to grow 177% by 2030, Benchmark reported in an Oct. 1 article. This is due to rising rates of electric vehicle deployments and expansion of charging infrastructure.

BHP forecasts a 70% growth in global copper demand by 2050, reflecting an average growth rate of 2% per year, it wrote in a Sept. 30 article.

Haywood Securities Analyst Pierre Vaillancourt views the red metal favorably. "We remain constructive on copper fundamentals, which remain strong due to high demand, constrained supply, and increased investment in energy transition projects" he wrote in an Oct. 5 report.

Richard Mills purported in his Oct. 8 Ahead of the Herd newsletter that at some point in 2025, the current global copper surplus is going to turn into a deficit, and two factors will cause demand to exceed supply. One is the need for copious amounts of copper for the green energy transition. The other is improvement in China's economy resulting from stimulus efforts by its government.

"Because reserves at copper mines cannot keep growing by constantly lowering the cutoff trade, because the short-lived rush to market we are experiencing will soon end and that the copper mine cupboard is bare, and because of stimulus from China, we at AOTH maintain our very bullish take on the copper market" Mills wrote.

Ownership and Share Structure

According to Refinitiv, management and insiders own 33.96%, or 3.8M shares, of Rex Resources. They are President, CEO, and Director Craig Taylor with 21.7% or 2.43M shares, Business Development and Director Anthony Zelen with 10.29% or 1.15M shares, and Director Michael Leahy with 1.97% or 0.22M shares.

Retail investors hold the remaining 66.04%. There are no institutional investors at this time.

Rex Resources has 11.19M outstanding shares and 7.39M free float traded shares.

Its market cap is CA$0.82 million. Its 52-week range is CA$0.03−$0.145 per share.

Important Disclosures:

1. Defense Metals Corp. is a billboard sponsor of Streetwise Reports and pays SWR a monthly sponsorship fee between US$4,000 and US$5,000.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Defense Metals Corp.
3. Doresa Banning wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor.
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