Investors Long This Unknown Mining Stock Could See a Near-Term 5-6x Return

• Southern Ecuador is home to some promising mineral reserves, but the region had been abandoned in early 2000's due to restrictive government oversight. With new legislators, the area is again open to foreign investment, and large companies are making substantial investments in well-explored deposits.

• One of the most promising mines, Fruta Del Norte, was sold for $1.2 billion, and now a similar concession just 40 km away is being explored by another junior miner, Lucky Minerals (LJ). The company will complete initial exploration efforts, including an aerial geophysical survey in the coming months, which should give investors a good idea of what this concession could be worth.

• Lucky shares could be worth much more than their current price based on a comparison to another similar public company in the region. Aurania (ARU) is also undertaking exploration in on a similar concession - basically at the same stage of development as LJ. This company is already valued at $60 million, as it is a well-known stock, implying that LJ could be worth 6X more as investors realize the potential here.

NEW YORK, NY / ACCESSWIRE / July 30, 2018 / Ecuador is back on the radar for mining companies and their investors as new, friendlier regulations open up this previously restricted landscape to new foreign investment.

It's been years since some of the most promising concessions loomed large in this region, like the Fruta Del Norte mine which was acquired for $1.2 billion in 2008 from its discoverer, Aurelian Resources. The acquirer, Kinross (KGC), has called this mine "one of the most exciting gold discoveries of the past 15 years."

But investment lagged until about four years ago when a new government started making things easier on mining and exploration companies. That's changing swiftly as new money pours back into this neglected region.

That could mean big things for undiscovered Lucky Minerals (LJ), a Canadian company that recently acquired the promising Fortuna concession in Southern Ecuador. The company has just started modern exploration after the previous owners sat on the reserve for a decade, and these first mineral results - in a region rich in gold and copper - should be released in the next few months. A similar company in the area is already worth 6X more than LJ even at the same stage of development, giving investors an idea of what LJ could be worth as it goes through price discovery this summer.

Ecuador Coming Back Online as a Major New Mineral Source

Sadly, Kinross and the government never could finalize terms on an exploitation contract for the Fruta Del Norte concession, and the larger company basically abandoned the project in 2013. It wasn't until December 2014 that they sold it to Lundin Gold Inc. (LUN), who is now making major headway at the site - this could be one of the biggest windfall's of the century now that Lundin is paving a path forward.

The Ecuadorian government seems to have taken major action to restore Ecuador's reputation as a premier destination for mineral exploration; in 2015, Ecuador established an independent Ministry of Mining and began to issue new mineral concessions once more in order to turn the area "into a pillar of the economy in the next 5-10 years."

For example, the Ministry of Energy and Non-Renewable Natural Resources will now let companies perform non-systematic drilling much earlier in the exploration/development of new projects, previously permitted only during advanced exploration and requiring an environmental license.

As a result, analysts are getting back on the Ecuador train. According to BMI Research, the mining sector will see its value increase to $7.9 billion in 2021, from only $1.1 billion in 2017. Mining investments are expected to top $4 billion in the next four years!

With Fruta Del Norte back in action, this mine is expected to generate 340,000 ounces of gold a year during its life; production is expected in the first quarter of 2020.

Chinese companies are making a major push into the region as well, as with the large-scale Mirador copper mine, controlled by the CRRC-Tongguan consortium, and Río Blanco, a project operated by Junefield Mineral Resources. Ecuador is finally coming back around for mineral companies, and for investors with the right timing, this could be a major windfall.

Newly-Backed Fortuna Could Rival $1.2B Fruta Del Norte

Southern Ecuador is home to a prolific mineral belt, and a neglected concession at Lucky Minerals (LJ) could be about to land on the mining scene in a big way. Their Fortuna claim is only 40km from Fruta Del Norte and Mirador, and both are at the forefront of the new wave of investment in the region - for good reason.

Lucky Minerals recently acquired the Fortuna concession from a private company that sat on the property for about a decade, despite significant exploration in the area. This 550 sq. km concession is situated on a similar N-NE-trending geological structure as Fruta Del Norte, and with no modern exploration or drilling on the site so far, this could be primed for some real discovery. The concessions have had placer mining for gold for hundreds of years, but formal exploration has been sporadic at best.

Now, Lucky Minerals is undertaking some first key steps in exploration, which could put this undiscovered explorer on the radars of much larger companies and investors.

By way of example, Aurelian Resources Inc was the original owner of the Fruta Del Norte claim. This was a small unknown company before exploration work on Fruta Del Norte began in 2006... the company's stock climbed from $0.40 to over $40.00 as exploration continued, culminating in the $1.2 billion purchase by Kinross.

As you know, things stalled shortly after as Ecuador's government stymied investment here, but the takeaway is that Lucky's Fortuna concession could look quite similar if they find the right resources during exploration. The Fortuna property has considerable potential for gold and porphyry mineralized systems, and Lucky is preparing for initial exploration efforts this summer.

Lucky will undertake detailed mapping, sampling and assaying of 4 targeted areas starting this month, and this field program will be followed by an airborne magnetic geophysical survey in September to complement previous satellite imagery and identify and prioritize additional targets in all 12 of the Fortuna concessions. This is quite similar to the process that Aurelian went through before the Fruta Del Norte discovery.

Direct Comparison to Neighbor Junior Miner Suggests 5-6X of Upside?

So how do you value an early junior like this? The market is giving investors a great clue, especially as Lucky Minerals has gone mostly unnoticed since picking up the Fortuna concession. The company is valued at a market capitalization of $10 million.

Aurania Resources (AUIAF) (ARU) is an early-stage explorer also pursuing an Ecuadorian concession in the same region as Lucky. Aurania's CEO is Dr. Keith Barron, one of the masterminds behind Aurelian Resources when they first discovered the Fruta del Norte deposit in 2006. He's back for a second run at this region, and Aurania's (ARU) market value should give investors an idea of how LJ could be valued, too. These companies are at almost the same stage of exploration.

Aurania's market capitalization is $60 million, thus Lucky Minerals, with a similar promising claim in the region, could arguably be valued the same way. For LJ, that would mean a stock price of $0.60 or more. The company's shares are currently at about $0.12. That's 5-6X of potential upside!

Lucky Minerals has risks for sure, as this junior miner is still in the exploration phase of development. They will need to finance their exploration efforts, and the concession could be worthless in the end - an investment in Lucky should be considered high risk/high reward compared to bigger companies like Goldcorp Inc (TSX:G.TO) or Barrick Gold Corporation (NYSE: ABX).

Junior miners are known for big rallies, especially as exploration gets underway. Details on the Fortuna project should be out this summer or fall, and LJ could be primed for some price discovery by mineral investors as a result.

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