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CEO.CA members discuss high-risk penny stocks which can lose their entire value. Only risk what you can afford to lose.
@rackerTD Daniel Earle on Continental Gold $CNL This AM
This morning, Continental Gold provided an operations update and the 2017 construction outlook for its Buritica gold project (100%) in Colombia.
Impact: SLIGHTLY POSITIVE
· Since receiving the final environmental permit in late 2016 and securing a senior secured debt facility in January 2017, with $100mm currently available, the company has ordered long lead time equipment and hired key project personnel ahead of major earthworks beginning later this year.
· Continental is hoping to have placed all purchase orders for all long lead time equipment prior to the end of Q3/17.
· As equipment arrives, underground development activities are expected to ramp-up approximately six months ahead of schedule (30% of the underground mine development equipment is expected to be delivered in Q3/17), allowing for training of its skilled underground mining workforce.
· The company plans to resume exploration drilling with a minimum 12 km drill program commencing in Q2/17.
· The company reported $100mm of liquidity, sufficient for its 2017 planned activities.
· As a reminder, a Feasibility Study (FS) for the project was completed in February 2016, which outlined Proven & Probable Reserves of 3.7 Moz grading 8.4 g/t. Total Resources (inclusive) were estimated at 9.0 Moz at 9.8 g/t.
· The FS forecasts production of 253 koz/yr (282 koz/yr over the first five years) at cash costs of $411/oz (AISC of $492/oz). Initial capital costs were estimated at $389mm.
· We note Continental has underperformed the GDXJ by ~23% since the company's 52-week high in February (CNL is down ~43% since then, while the GDXJ down ~20%).
· We believe the underperformance is due to pre-selling in advance of an assumed decrease in weight in the GDXJ, which is scheduled to take effect at the June 17 rebalance.
· Buritica is fully permitted and is now standing as one of the largest and highest grade, independently owned, construction ready gold projects in the world.
· The company has secured a $250mm debt facility ($100mm available immediately) and we expect the stock to re-rate progressively higher as it continues to advance the project.
@schischiIs it possible that $CNL will be another bust like Colossus ? Or are there moren proven ounces and less problems ?
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@lukejacksonI'm of the mind that if JC Parets is correct and gold heads back to -1210 then buy opp on $CNL$LMC will be epic before gold finally breaks out. Unfortunately most attractive juniors are funded at this point.
@Wannabeinvestorsurely there is the issue of financing, but that was known months ago. What must have started as large scale selling by $GDXJ has now become a big sell-off. I did expect the 3.25 area to hold. Next visible support for me is around the 2.50 area, but I'd be surprised if this is where the stock's headed at one go.
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@lukejacksonI think we're still in an area of strong support. I may be wrong though.
@mountains_of_gloryRE: CSI, I don't believe lightning strikes the same place twice. It would be too surreal were this CSI 2.0. CSI was a disaster but let's assess and discuss $CNL as a separate entity albeit with the same head honcho. What do you mean when you say the ounces "are face" @Pete86?
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@mountains_of_glory@Pete86, the beating here isn't company-specific, so I'm now of the belief you aren't interested in adding value with your words and comments.
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@FanagaloThere's been a lot of talk, and I might be wrong here but I wonder if people realize the magnitude of this. The GDXJ mess is setting up some great buying opportunities. Just take $TGZ as a case in point (I bought a good chunk yesterday - but I'm most certainly way, way too early). If $TGZ will make up 0.33% of GDXJ instead of 0.96%, and with Van Ecks holding before all of this at 71 million shares, that kinda implies that they have what, about 43 million shares for sale. There's no way that that selling is done, and I fear it's the same in many, many more names like $CNL, $SMF, $WDO, $EDV etc. When all is said and done, perhaps the mid-caps that has endured this selling might be set up for equally explosive runs as the smaller, hot explorers (but with significantly less risk)? Any more thoughts on this tiring subject?
@mountains_of_gloryI like seeing LARGE holders adding more shares to their positions at depressed prices. A great deal of $CNL stock has been accumulated through Clarus, and Clarus is heavily on the buy today.