Currently trading with a valuation of $100 million, Artemis Resources (ARTTF) disclosed, in its annual report, a total of 480k gold ounces in inferred resources. Investors pay $1,859 for one gold ounce. Therefore, the company’s resources are estimated to be close to $892 million. Two large asset management firms, Jupiter Asset Management and Ruffer, bought shares of the company. In our view, when more investors get to know the company’s projects, the share price will trade higher.
Headquartered in Perth, Artemis Resources is an exploration and development company with two gold projects in Australia:
Artemis offers one project with identified inferred mineral resources, the Greater Carlow Gold project, and an exploration project called the Paterson Central project. Investors get access to a mine that could produce gold in the future. They know that the company will most likely report sales. At the same time, they are buying a second project that could multiply their investment if gold is found:
Expect The Feasibility Study Of The Greater Carlow Gold Project
The Greater Carlow Gold project owns a mineral resource with close to 418k oz of gold and copper. Artemis Resources may not need a lot of capital expenses because the company already owns Radio Hill processing plant:
The investment play here appears simple. Investors will most likely study the concentration of gold found in the mine. If gold resources or concentration increase(s), market participants may push the share price up.
Let’s state it clearly; only those investors who study very well the gold concentration delivered by Artemis will get paid. According to a recent business presentation, the Greater Carlow Gold project shows 1.6 ppm of gold and 0.6% of copper. That’s not all. Recent drilling also indicates that the resources may be even more significant. Artemis Resources needs to be under our radar.
There are more stock catalysts. Artemis is expected to deliver a feasibility study, which will most likely include a detailed explanation of the company’s gold resources. Once the company publishes its indicated and measured resources, I expect that more investors will assess the company’s potential. As a result, liquidity in the stock could increase leading to an increase in the share price.
Paterson Central Project: Close To A Successful Project Of Rio Tinto
The exploration strategy of Artemis Resources is smart, and may not be considered risky by most mining investors. The company is operating in an area that is close to a place where Rio Tinto (RIO) found resources with 0.41% of copper and 0.38 g/t of gold. If Artemis Resources finds the same amount of gold in the coming months, I would expect the valuation of the company to explode up.
Source: IR Presentation
Source: IR Presentation
Valuation Of The Inferred Resources
As shown in the table below, Artemis Resources discloses 480k gold ounces and 90k copper ounces. The company also expects to obtain cobalt, nickel, and zinc. However, let’s be a bit conservative. We will assess the valuation of the company’s copper and gold:
Source: Annual Report
As of February 2, 2021, the market pays $1,859 for one gold ounce, and $3.52 for each copper ounce. With 480k gold ounces and 90k copper ounces, the total valuation of the company’s resources will most likely be close to $892 million.
With 1.122 billion shares outstanding at $0.09, Artemis Resources shows a market capitalization of $100 million. In our opinion, the company’s valuation appears a bit undervalued as compared to the resources reported by Artemis. Clearly, when more investors get to know the company’s projects, the stock demand will increase. As a result, the market will most likely see an increase in the share price.
Well-Known Players Bought Shares
If you want to make real money in the market, you need to invest with the big boys. Large money managers appreciated the gold projects of Artemis Resources. UK fund management group Jupiter Asset Management owns 4.99% stake in the company. Jupiter has £55.7 billion assets under management. There is also Ruffer LLP, which managed £21.0 billion as on 31 December 2020. Ruffer reported a stake of 3.14%. Read the table below for more details on the matter:
With a market capitalization of $100 million, Artemis Resources has two promising mining projects. We like the fact that two large asset management firms, Jupiter Asset Management and Ruffer, acquired shares.
That’s not all. Taking into account the company’s inferred resources, in our view, Artemis Resources will most likely trade higher. Notice that the company’s mines offer 480k gold ounces, which are currently valued by the market at $892 million. That is more than seven times the current market capitalization.
Disclosure: We don’t have shares, and we were not paid to write this article.