CEO.CA Weekly Wrap
A look at some of the week’s best chats and charts on CEO.CA, a community and platform for Canada’s venture stock markets.
Canadian small cap investors have a reason to smile this 3--day market weekend after the TSX-V put in place, what appears to be, a higher low (relative to the January low):
TSX-Venture Composite (Daily)
Junior gold miners finished the week strong with rallies on both Thursday and Friday, closing at the high for the week. Meanwhile, cannabis stocks also finished the week strong with a 4-session winning streak.
The junior gold explorers/developers and mid-tier producers, which comprise the GDXJ exchange-traded fund, have had an especially strong start to 2019, rising more than 9% since the beginning of the year and breaking above a long-term downtrend line in the process:
Dips are becoming shallower in the precious metals sector and there are mounting signs that we could be in the midst of a powerful uptrend across the sector.
We are seeing an increasing number of TSX-V listed gold juniors hitting fresh 52-week highs, and in some cases, all-time highs:
Last Wednesday Great Bear Resources (TSX-V:GBR) reached a new all-time high at C$4.08, which equates to a fully diluted market cap of nearly C$190 million. As GBR shares were soaring its Red Lake neighbor, Pure Gold Mining (TSX-V:PGM) was reeling from a disappointing Feasibility Study. The study indicated that Madsen would have average annual gold production of less than 100,000 ounces per year, a production milestone that many were focused on:
Because feasibility stage analysis is much more stringent, Mr. Coffin went on to stress that feasibility study numbers are almost always worse than PFS or PEA numbers:
It’s interesting to compare and contrast the GBR and PGM stories (I own shares in both stocks) because PGM is much further along in the mine development process than GBR is, yet they currently have similar market caps.
PGM has a completed feasibility study with 1,000,000 ounces of probable reserves at an average grade of 9.0 g/t gold, and if we add in the inferred ounces, PGM has more than 2.5 million ounces of gold; in total grading more than 8.5 g/t gold. Whereas, GBR doesn’t yet have a PEA or a maiden resource estimate. This is not a knock on GBR. These are the facts of the situation and help to illustrate how challenging it can be for companies to trudge through the development stage of the mine cycle. Everyone seems to like explorers with new high-grade gold discoveries because they offer pie in the sky.
This GBR/PGM situation could be a perfect example of the old market adage, “Buy on mystery, sell on history.” GBR being the mystery because it is still early in the exploration stage, and PGM being the history because it is at the feasibility study stage and fast approaching the production stage.
Checking in with one of the stocks I highlighted last week, a Colombian conglomerate gold play whose shares resumed trading at the end of January, MAX Resources (TSX-V:MXR). It was a wild week for MXR which saw new all-time highs reached on Monday, followed by a 30%+ correction over the next two trading sessions.
@Vaughan, a CEO.ca community moderator, said he could no longer moderate the MXR channel because he had followed @Stateside and taken a small, speculative, position in its shares. @Vaughan then shared highlights of a conversation with MAX CEO, Brett Matich, on Thursday morning:
As it turns out Vaughan had pretty good timing with his comments….
MXR shares rose ~30% from their Thursday morning lows and ended the week at a fresh weekly closing high.
With conditions improving across the junior gold space last week, many charts have begun to set up nicely for potential chart pattern breakouts over the coming days/weeks. A couple of charts that stand out to me this weekend:
RNX has formed a broad-based-bottom over the last several months. In recent days, a high & tight ascending triangle has formed which appears poised to resolve higher (above C$.75), this pattern would target C$.90+ on a breakout.
@Ty pointed out the Sabina Gold & Silver (TSX:SBB) chart Friday morning offering the following comment and chart:
I am especially fond of the SBB chart because the downside risk is well-defined by the double-bottom base down near C$1.15, and the Relative Strength and Money Flow indicators are poised to confirm any eventual chart pattern breakout.
Comments like that are a refreshing change, and I believe help to encourage better behaviour and more value-added posting.
Speaking of value-added posting, one of the top commenters on the RNX channel, @Mikeymike426, has landed in Australia on his way to visit Royal Nickel’s Beta Hunt mine:
Mikey will be sure to deliver a thorough report on his trip, including chat comments and blog posts.
I have been following @CautiousNow on CEO.CA for a few years, and he often shares his thoughts on companies he is trading or investigating. On Thursday morning, @CautiousNow posted on the WHN channel stating that he had been patiently waiting since November to pick up shares and finally had the dry powder to pull the trigger:
His timing appears to be quite good as Westhaven shares rose 10.7% on Friday, the day after he bought in:
Westhaven is beginning its inaugural drilling program of 2019 at its Shovelnose Project in southern BC, Canada in the next couple of days, and sentiment on the channel seems to have shifted from disappointment to some early optimism. The chart has also improved with higher lows and higher highs since the January 22nd low of C$.69.
One of the newer initiatives at CEO.CA has been the creation of Wikis. You know, the crowdsourced research papers made famous by Wikipedia where anyone can contribute. CEO.CA thought it would be beneficial to have one for every Canadian stock, allowing members to share things like financing, history and free-trading dates.
Moo then started diligently completing company wiki pages for Sarama Resources (https://wiki.ceo.ca/swa), Westhaven Ventures (https://wiki.ceo.ca/whn), and Minera Alamos (https://wiki.ceo.ca/mai)
Thanks for all the hard work, @Thecowsaysmoo!
What the CUV?
One of the most active channels on CEO.ca last week is the one for non-mining stock, CUV Ventures (TSX-V:CUV), a venture stage company that pivoted from a Cuba travel website to payment processing in the Caribbean and Latin America last year.
At a 32 cent closing price, the Company has a market capitalization of about $42 million Canadian and $462,000 working capital surplus at the end of the last quarter. CUV is one of the CEO.CA channels where the animal spirits are running wild. Hundreds of bullish posts per day with lots of cheerleading. CUV shares have already climbed more than 400% in 3 months, and at one point last week they were up more than 900%.
The trading action in CUV last week offers a wonderful demonstration of the proprietary visual market depth tool, CEO.CA Pro, created by @murat and his team, offering plans starting from $50/month.
CUV’s chart was in a healthy and steady uptrend heading into last week, and as of Monday’s close the stock looked primed for a breakout:
CUV began breaking out Monday afternoon and the buying quickly accelerated on Tuesday and Wednesday. Reaching a climax early in Thursday’s session, before rolling over hard after 11am EST Thursday:
After last week’s rollercoaster ride, the good news for CUV bulls is that there should be strong support around the C$.30 level:
After such a tumultuous week in CUV, @newguy offered some comic relief on Friday afternoon:
When delivered in the right tone and at the right time, humor is a much welcome reprieve from the usual serious, and often contentious, chatter on highly trafficked CEO.ca company channels.
Disclosure: Author is long shares of GBR.V, PGM.V, and WHN.V at the time of publishing and may buy or sell at any time without notice. The author also writes for EnergyandGold.com which has a current marketing & promotional services agreement with Westhaven Ventures.
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