Does This Co.'s Project Have Blue Sky Potential?

Source: Clive Maund 09/09/2024

Technical Analyst Clive Maund explains why Vortex Metals Inc. is a Strong Buy, looking at both the stock's charts and copper's outlook as a whole.

While Vortex Metals Inc. VMSSF has made no net progress since we last looked at it back in April due to the heavy correction in copper that is now believed to be over, it is very much back in buying territory as we will proceed to see when we review its charts, and especially since the looming severe copper supply deficit is getting ever closer to having an impact on the sector.

Before looking at the latest stock charts for Vortex, we will review the fundamentals of the company with the assistance of the company's latest investor deck.

The deck starts with the general but crucially important point that the impending massive supply crunch projected for copper in coming years that is already on the point of impact is likely to drive the copper price much higher, and this clearly has a hugely beneficial impact on all copper miners, large and small and will even have a positive impact on junior exploration companies who, if they have any worthwhile assets at all, will become takeover targets.

Vortex has three primary assets: its flagship property, the fully permitted advanced copper-gold brownfield project in Chile, and two copper/gold prospects in Mexico, whose general locations are shown on the following slide.

The exact location of the Illapel Copper-Gold Project, so called because it is in the community of Illapel in Chile's fourth region and not far from the town of Illapel, is shown on the following slide, which also shows the location of various important mines and mining projects in this central part of Chile.

Infrastructure in the area is good, and the relatively low elevation means that exploration drilling can be conducted year-round.

This slide provides an overview of the Illapel Copper-Gold Project.

This next slide shows the project highlights. Points to note are that the Illapel copper concession surrounds the Rio 27 mine, a fully operational copper mine in production for over 10 years, which has processed approximately 400,000 tonnes of high-grade ore, with an average grade of 1.39% copper and approximately seven grams silver.

So this is a most promising copper-rich area, and as the company has the option to acquire an 80% interest in the project, including ROFR (right of first refusal) on the Rio 27 mine and processing facility, the project can be said to have "blue sky" potential, especially given the extraordinarily positive outlook for the copper price. It is also worth noting that the Phase 1 drilling program mentioned on this slide is now underway, and it probably won't be long until results from it start coming in, which could clearly act as a catalyst for the stock.

With respect to the company's properties in southern Mexico, the following slide overviews these assets, and a big takeaway is that targets on these properties are drill-ready but awaiting permitting.

This slide shows the exact location of the two Mexican properties and, for comparison, the location of other important mines / projects in Mexico. As we can see, Vortex controls two of the three high-potential VMS exploration plays in the Oaxaca VMS belt, and it is important to note that renowned VMS expert Jim Franklin has proposed that the geological setting is similar to the world-class Noranda VMS Camp.

Numerous high-grade drill targets have been identified on the properties, which only await permitting to get the go-ahead, so the potential here is clearly great.

Now, we will proceed to see on the charts why Vortex Metals is a Strong Buy here. . .

Vortex Metals broke out of its large Double Bottom base pattern as predicted in the original article on it but then went on to give back all of the gains due to the heavy reaction in copper from its May peak.

However, the reaction in copper has now run its course, and it looks like it is shaping up to begin another major uptrend. I talked a little bit about this in my late August copper article.

This uptrend is hardly surprising given the huge copper supply deficit that is right now starting to bite and is set to get a lot worse as this decade unfolds. We can see how copper is positioned to begin another upleg on its 6-month chart below.

This being so, and given that Vortex has been moving in sympathy with copper so far this year for obvious reasons, this is viewed as an excellent time to buy the stock or add to positions.

On its 1-year chart, we can see how its movements so far this year have quite closely corresponded with the movements in copper itself, and given that, as we just observed above, copper is now in a position to begin another major uptrend, so too is Vortex Metals and the news good for those interested in the stock is that it is clearly still at a very good entry point.

A couple of large "cross trades" can be seen on this chart, one in April and one in June, which, given the low price level that they occurred at, are interpreted as bullish since they indicate big position-taking by substantial buyers. The big drop in the volume indicators on the second one is an anomaly that can be ignored as all it means is that the price closed down on the day of the cross so all its volume is clocked up as negative.

On the 3-year chart, we can view the entire history of the stock. On it, we can see that a large Double Bottom base pattern formed from late 2022 through late 2023 that the price tried to break out of in the Spring, but it got beaten back down again in sympathy with the heavy correction in copper itself but now looks set to advance again in step with copper, although if it hangs around in this area for longer the pattern could then be classed as a Triple Bottom but whether it advances immediately or takes some weeks to get moving it is clear that it is at a very favorable entry point.

The conclusion is that Vortex Metals is very well placed to benefit from the major bull markets in both copper and gold that are set to gain a lot more traction soon and this being so its stock is regarded as most attractive here following its dip back to a foundation of strong support that is expected to propel an advance to much higher levels.

Vortex Metals Inc. closed for trading at US$0.06245, CA$0.095 on September 6, 2024.

Important Disclosures:

1. For this article, the Company has paid Street Smart, an affiliate of Streetwise Reports US$1,575.
2. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Vortex Metals Inc.
3. Author Certification and Compensation: [Clive Maund of clivemaund.com] was retained and compensated as an independent contractor by Street Smart to write this article. Mr. Maund is a technical analyst who analyzes historical trading data and he received his UK Technical Analysts' Diploma in 1989. The recommendations and opinions expressed in this content reflect the personal, independent, and objective views of the author regarding any and all of the companies discussed. No part of the compensation received by the author was, is, or will be directly or indirectly tied to the specific recommendations or views expressed.
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7. The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.