Gold above USD 4,000, Bitcoin and NASDAQ reeling! Formation Metals on the rise, panic at Metaplanet and DroneShield

Formation Metals – Huge potential lies dormant here

Anyone looking to enter the strategic metals market with a lot of imagination and little money should take a look at Canadian explorer Formation Metals. Here, promising properties in Québec's famous Greenstone Belt are served up on a silver platter. The Company focuses on drill targets with high discovery potential and a clear strategic growth path for resource expansion in the Abitibi region, one of the most productive gold regions in the world, with over 200 million ounces historically produced. The core project is the N2 Gold Project in Québec with a historical resource of approximately 870,000 ounces of gold. The overall structure of the project comprises six zones, with the A and RJ zones in particular considered geologically highly mineralized and already subject to screening. Historical drill cores also confirm the presence of base metals, opening up a potential polymetallic perspective for the project.

Formation Metals is implementing a multi-stage, already funded exploration program, which has been significantly expanded to 30,000 meters from its original, smaller scope. The ongoing drilling work is intended to extend existing gold structures, open up new trends, and technically reclassify previous data series. Supplementary geophysical investigations and metallurgical analyses will serve to update the resource estimate and identify additional economic components. This strategic setup is exciting!

Despite short-term price fluctuations, the gold market is also sending strong medium to long-term signals. High producer margins and tight physical inventories are creating an attractive exploration climate. Against this backdrop, Formation Metals is positioning itself as a well-financed player that can benefit from regional expertise and the strong visibility of the mining cluster. The capital market is now eagerly awaiting what will happen in the coming months. Based on rational considerations and a market capitalization of just under CAD 23 million, a multiplier should be possible for 2026.

In a recent interview with Lyndsay Malchuk (IIF), CEO Deepak Varshney provides deeper insight into the near future.

https://youtu.be/43GgSe8bh2w

DroneShield – Deep correction after a meteoric rise

The rally hit hard and fast! Following several decisions within the European NATO countries to significantly ramp up drone defense, there was no stopping the Australian provider of drone defense technologies. In anticipation of huge orders, the share price soared by 600% by mid-October. However, as the fundamentals cannot keep up with this pace, we warned early on about the massive overvaluation of DroneShield shares (2025 P/E ratio of more than 30). This was followed by a 65% correction from the peak. First, some additional information: Due to the strong share price performance and the achievement of the AUD 200 million revenue threshold for the current year, 44 million employee options linked to certain revenue thresholds were released. The options quickly became in-the-money and were exercised immediately. This brought 5% of the outstanding capital onto the market at a time when buyers were already shying away from the stock due to its high valuation. CEO Oleg Vornik also announced that the next option revenue hurdles would be reached at AUD 300, 400, and 500 million. On top of that, he and his management team also sold significant amounts. Although analysts are now looking at the next figures again with prices around EUR 1.33, the constant sales mean that management is doing the whole thing a disservice. Technically, the first support zones can be identified at EUR 0.95 to 1.15! Wait and see.

Metaplanet – Likely miscalculated with BTC

Yesterday was a shock! After a continuous downward trend with a loss of 90%, the sell-off reached a new 5-month low of EUR 1.87. The reason was Bitcoin, which briefly fell below the USD 90,000 mark. Metaplanet, which started as a BTC asset manager, had accumulated holdings of 30,823 Bitcoin by the fall, which, according to yesterday's updated valuation, are worth around USD 2.85 billion. That is exactly where the Japanese company's market capitalization has plummeted. Not long ago, Metaplanet shares were celebrated as particularly high-yielding, but the poor mood in the crypto sector has massively changed sentiment toward the stock. Investors are no longer willing to pay a premium for Bitcoin reserves when their prices are falling daily. In addition, according to reports, the Japanese Securities and Exchange Commission is planning stricter guidelines, which could hit companies with high share issuance models, such as Metaplanet, particularly hard. This could even lead to a discount on the NAV, which would also weigh on future share placements. Overall, current developments indicate that sentiment is unlikely to change without positive catalysts. Metaplanet is thus mutating from a shining innovator into a dangerous BTC aggregator that has to deal with issues such as risk management and incalculable tail risks. Casino value for speculators only!

In the current phase of heightened volatility, gold and silver stocks continue to hold up remarkably well. In contrast, many of the recently strong NASDAQ names are experiencing steep sell-offs. The defense stock DroneShield is rapidly reducing its dramatic overvaluation, and Metaplanet is also feeling the uncertainty in the crypto environment. Formation Metals is still digesting its recent capital increase and is currently trading at just above its cash position, which is a good opportunity for more dynamic, risk-tolerant investors.