For months I highlighted that the low valuations in the junior resource space will attract large miners especially in the platinum and palladium (PGM) space which has a huge supply demand imbalance. This past week Antofagasta offered $.45 per share for junior miner Duluth Metals Twin Metals Ni-PGM deposit in Minnesota.

The Twin Metals Deposit is similar to Wellgreen’s (WG.V or WGPLF) as they are large PGM deposits in North America. Dundee put out a research note after the transaction which showed if Wellgreen was bought out at the same valuation as Duluth it would be priced at $1.85 share. Today’s price in the mid fifty cent range is quite cheap especially as we see the growing interest in Platinum and Palladium sources outside South Africa.

For many reasons I chose the Wellgreen asset over the Duluth asset.  I had some concerns about permitting for Duluth whereas the Yukon is much more mining friendly.  Wellgreen has much more exposure to nickel and PGM’s compared to Duluth and a much lower potential Capex.  Wellgreen should be considered at these cheap levels especially in light of the recent Antofogasta purchase of Duluth.