Money Talks: Keep an eye on these tasty precious metal and biotech plays in 2024
MoneyTalks is Stockhead’s regular drill down into what stocks investors are looking at right now. We’ll tap our extensive list of experts to hear what’s hot, their top picks, and what they’re looking out for.
Today we hear from Alto Capital investment manager Tony Locantro.
“The key theme to come through was that 2023 has been an abysmal year for any ‘quality’ emerging small cap stocks outside of the lithium sector,” Locantro said.
“However as per the usual the current malaise equals a major opportunity where the future war stories are created.”
And where does he see those opportunities? In gold and silver juniors and several biotech players.
“I’m a combination of gold and silver juniors and some individual biotech stories just to mix it up a bit,” Locantro said.
“The reason why gold, silver juniors appeal is because the gold price in US dollars is over $2000.
“Silver’s tipped for a big future and a lot of the gold and silver juniors are capped at multiples in the ground that are just unsustainably low.
“The enterprise value for some of them is $10-20 when historically they’ve traded at $40-60 per resource ounce in the ground.
“They’re cheap and I think majors and mid-caps can go in and buy ounces rather than drilling them out – and I think we’ll see a wave of M&A and that should see some more mid tier companies created.
“I also think that speculators are probably starting to tire of lithium acquisitions in hot areas, the share price reactions are tapering off a bit, and they just need a dose of gold and silver fever – and there’s no bubble like a gold bubble.”
Maronan’s flagship project of the same name is one of Australia’s largest, highest-grade, undeveloped silver resources, about 90km north of the giant Cannington silver-lead-zinc mine in northwest Queensland.
Last week the explorer flagged hits of up to 17.1% lead and 112g/t silver which could add significant tonnage to the project’s silver-lead and copper-gold resource.
Locantro said that not only is the company reporting outstanding lead and silver results, they also have a copper gold component, are finding thick widths have led and silver close to surface and they’re going to be looking towards mining studies next year.
“Based on the lead silver copper gold resource, it’s getting towards 400 million ounces silver equivalent or a 4 million ounce gold resource all for around $30 million,” he said.
“The company hasn’t got a profile, but it’s looking good and in the event of a silver run, it will be shown to be one of the most undervalued opportunities and hopefully it gets a rerating.”
The company owns the large (1.84Moz at about 0.6g/t) but low grade Apollo Hill gold project near Leonora in WA’s Goldfields.
However, there are high grade zones at Apollo Hill, with Saturn having run the numbers on a heap leach operation, a processing method only sparingly employed in the WA gold space these days.
“It’s 1.84 million ounces, it’s low grade, but it’s potentially a heap leach operation,” Locantro said.
“They are working towards further economic studies and hopefully getting into production.
“Initial economic studies show a robust project and the area has substantial exploration potential.
“It’s a bit of a different story being heap leach, so hopefully, they can grow the company without getting taken over too early.”
The WA goldie has the 946,000 oz Sandstone project near Mt Magnet and Leinster, where the plan is to expand the tenement footprint to support future mining operations.
“[There’s] outstanding exploration potential,” Locantro said.
“They have some infrastructure at Sandstone and the region hosts several million ounces that should eventually see some production.
“I like management, Brad Valiukas was previously at Northern Star Resources (ASX:NST) with Bill Beament and helped with the Pogo project in Alaska.
“The stocks, is trading not far off an all-time low and it struggled under selling pressure, so that looks great, medium to longer term.”
“On the biotech front, one of my preferred stocks is AdAlta (ASX:1AD) ,” Locantro said.
“They have a IPF-AD214 – which is an i-body technology platform looking to treat idiopathic pulmonary fibrosis.
“They’re working their way through a phase one extended trial and working towards partnerships as well.
“They bought out some interesting news last week on the i-body and potentially a world first with malaria.
“They also have CAR-T cell therapy cancer alliance with Carina biotech, which is unlisted but backed by Andrew Forrest investment vehicles.“
Chimeric Therapeutics (ASX:CHM) is another pick, with the company also involved in CAR-T cancer therapy.
Last month they announced positive pre-clinical data for CHM 1301, which showed in ovarian cancer cell killing was increased up to ~260% as compared to first generation CHM 0201 cells, while in pancreatic cancer, cell killing was increased up to 300% as compared to first generation CHM 0201 cells.
Locantro noted they’ve shown promising clinical results in glioblastoma which has extended the life of patients as well.
The final biotech pick is medical imaging company Radiopharm Theranostics (ASX:RAD) who’re developing diagnostic and therapeutic radiopharmaceutical products spanning peptides, small molecules and monoclonal antibodies for use in cancer.
The company will have four trials underway in 2024 in pancreatic cancer, brain metastasis, non-small cell lung cancer and breast and gastric cancer.
The company has great management too, Locantro says, with CEO and MD Riccardo Canevari previously chief commercial officer at Swiss pharmaceutical giant Novartis.
“And Diamond Research just put out another report with a 70 cent valuation on the stock,” he said.
The views, information, or opinions expressed in the interviews in this article are solely those of the interviewees and do not represent the views of Stockhead.
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