A potential money-multiplier on palladium

While the market’s attention has been focused on gold, palladium has quietly made a strong comeback from its mid-March lows.
With two lucrative takeouts to its credit, the team that leads Canadian Palladium (BULL.CN; DCNNF.OTC) looks primed to do it again, this time with an open-pittable palladium deposit near a key mining center in Ontario.

Dear John,

Believe it or not, the story of this years-long metals bull market isn’t gold, but palladium.

Yes, that may come as a surprise to generalist investors who have been focused on the big gains gold has made lately, but it’s true.

Oh sure, the Covid crash in March sent palladium down sharply from the all-time highs it had hit in February, but the metal has quietly come roaring back.

The reason?
Palladium’s primary use is as an anti-pollution reagent in the catalytic convertors of gas-powered vehicles.
And, after an initial dip in car-buying, uber-low interest rates have coaxed consumers back into the market, and driven palladium prices back above $2,100/oz.

As you can see from the chart above, after its March crash, palladium did a quick about-face in response to the fiscal and monetary stimulus unleashed on the economy.
Since then, prices fell again, but have since recovered as consumers ventured into the car-buying market.
Combine that trend with need for palladium-laden catalytic convertors to help ease global warming and pollution — plus looming supply constraints — and palladium becomes a must-own precious metal.
And few investments vehicles look as primed to deliver on palladium’s upside as Canadian Palladium (BULL.CN; DCNNF.OTC).

A Team With 15,700% and 1,850% Gainers On Its Resume

When you’re looking for a company with a chance to generate life-changing returns, always look for companies led by management teams that have done it before.

The team that leads Canadian Palladium has not one, but two money-multiplying stories to its credit.

Wayne Tisdale and Gary Clarke’s first winner was a company called Rainy River.
Founded in 2005 with a C$7 million market cap, Rainy River went on to prove up a multi-million-ounce gold resource and get taken out by New Gold for C$1.1 billion.
That sale price netted early investors in Rainy River an astonishing 157-fold gain!
Fast-forward to February 2017, Tisdale and Clarke did it again, riding the electric vehicle trend to great heights with U.S. Cobalt.
In less than a year, a company that traded at a C$8 million market cap leapt to C$149 million, an 18-fold gain.
Now, this dynamic duo is out to deliver similar gains with a palladium story that looks perfectly tailored to the current market.

Filling A Looming Palladium Supply Gap

A combination of increased demand for palladium and looming supply issues has made the metal a hot commodity.

The increased demand owes both to the demand for cleaner burning engines and the Volkswagen emissions scandal.

That scandal shifted European demand away from diesel engines’ platinum-intensive catalytic convertors toward the palladium-intensive version used in gas-powered vehicles.
Because much of the palladium on the market today comes as a by-product of nickel and copper mines, there is a dearth of companies focused on primary palladium production.
The current palladium supply deficit is 574,000 ounces, and likely to grow.
That’s what makes Canadian Palladium’s East Bull project (523,000 ounces of inferred palladium) such a compelling bet on this alternative precious metal.

A Resource Within Trucking Distance of Sudbury

At current palladium prices, that 523,000-ounce resource has an in situ metal value of more than $1 billion!
However — as you’ll see in a minute — that resource has the chance to triple or even quadruple by simply following the mineralized trend east, west and at depth on the current deposit.
But what makes it such a unique takeout target is that the resource lies at surface, within easy trucking distance along a major highway to the mining center of Sudbury, Ontario.

In other words, a mine at East Bull would be very inexpensive to build, requiring only that a company dig up East Bull’s palladium ore and truck it to a mill in Sudbury.
In a market that’s in desperate need of primary supplies of palladium that don’t depend on base metal demand, this project should be very enticing to a larger company.

Potential To Triple Or Quadruple The Current Resource

Then you factor in the growth upside at East Bull, and Canadian Palladium’s potential share price appreciation becomes truly exceptional.
As you can see from this longitudinal map of the East Bull deposit, the 1,800 meters of strike that hosts the 523,000-ounce resource at its center is but a piece of the mineralization that could extend along much of the 3,600-meters of strike.

Equally important, the resource has only been drilled to a maximum depth of 120 meters. By merely doubling the depth of the current resource to 240 meters, East Bull could grow substantially.
Indeed, between the strike and depth extension potential here, this resource could grow by a factor of four to over two million ounces!

Drills Are Turning Now

With a 10,000-meter drill program to expand East Bull underway at this very moment, news is already flowing from this project.
Between the possibilities of growing the resource or simply upgrading the existing resource into the reserve category, a re-rating for Canadian Palladium seems likely on the way.
How much of a re-rating?
Well, consider that just last October, South Africa’s Impala Platinum snapped up North American Palladium’s Lac de Illes mine in Ontario for C$1 billion.
And that project had a 399,000-ounce palladium resource (plus lesser amounts of gold, platinum, nickel and copper).
Thus, even with its current, easily mineable resource, Canadian Palladium could see an explosion in value from its current C$0.10/share, C$10 million market cap.

Throw in the potential for the resource to multiply in size, and you have a story that becomes a must-own in the current environment.

The team that leads Canadian Palladium knows how to produce big wins for shareholders.
Don’t miss your chance to get in early on what looks like their next jackpot.

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