Premium Resources Ltd. (PREM:TSX.V) is regarded as a very compelling story and an attractive stock for investors here. The company is advancing two major rare earth projects in the safe jurisdiction of Botswana in southern Africa and after a period of adversity over the past several years that has seen its stock lose five-sixths of its value it has attracted powerful backers and support in the recent past.
A key feature of the company's two projects in Botswana is that they are fully permitted and past producing, which means that they can be fast-tracked to production.
There was big news out of the company on February 19 that it will settle its debt in exchange for new shares, undertake a big financing at CA$0.30, appoint a new CEO, Morgan Lekstrom, who has an established record of delivering successes and legendary investor Frank Giustra will be joining the company. The financing has been very well received, and due to the weight of demand, it has been upscaled from CA$36 to CA$44 million, which is a clear sign of confidence.
Before analyzing the latest stock charts, we will overview the fundamentals of the company using slides lifted from the new February 2025 investor deck.
The company's two flagship polymetallic properties are located in the northeast of the safe jurisdiction of Botswana in southern Africa.
The attractive features of the company's properties and the associated key opportunities are set out below.
The following factors will expedite efficient production.
Below you can see peer comparisons.
The Selebi and Selkirk resource overview is below.
Selebi benefits can be reviewed here:
The Selebi Mine MRE (Mineral Resource estimate) from June 30, 2024 is here:
Here is he Selkirk mine overview:
The Selkirk Mine MRE (Mineral Resource estimate) from November 1, 2024 is here:
Below is a look at Botswana.
This last slide shows the capital structure before and after the soon-to-conclude big raise.
Turning now to the stock charts for Premium Resources and starting with the 3-year chart, we see that it has lost most of its value in just three years, having fallen from a peak above CA$2.40 in the middle of 2022 to just CA$0.35 now, which means that it is now valued at a mere one-sixth of its peak value less than three years ago.
On this chart, we can also see that this severe bear market has unfolded beneath the constraint of a giant Dome structure, with the price latterly accelerating to the downside to open up a large gap both with the Dome boundary and the falling 200-day moving average trailing overhead.
This means that it is heavily oversold, which creates snapback potential. To the casual observer, the chart looks awful, but in addition to the point just made about the stock being heavily oversold, there are two other strongly bullish factors to take into account that we can better see on the 1-year chart.
On the 1-year chart, we can see that from last October, the downtrend has morphed into a Falling Wedge whose boundaries are showing marked convergence. This is bullish because it indicates a diminution of selling pressure, which is also evident from the way that downside momentum has been waning, as shown by the MACD indicator steadily climbing back towards the zero line.
It is thus highly significant that, as this Wedge pattern has been closing up, volume has suddenly become very heavy this month with the action being fuelled by the big news out of the company detailed above. What this means is that, as soon as the constraint of the financing is lifted, which looks set to be announced within days, the stock will be free to advance.
With Premium Resources looking set to reverse into an uptrend upon completion of the major financing, which is believed to be imminent, it is rated an Immediate Strong Buy for all time horizons.
The first target for an advance is the resistance at CA$0.43 – CA$0.45. The second target is CA$0.90 – CA$1.00, with a higher target at CA$2.20 – CA$2.40.
Premium Resources' website.
Premium Resources Ltd. (PREM:TSX.V) closed for trading at CA$0.35 on March 3, 2025.
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For this article, the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500.
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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.
