Gold Bull has reported the acquisiton of a gold project from Newmont and the stock is up sharply even though gold is on its ass today.
https://www.goldbull.ca/news/gold-bull- ... om-newmont
I like the project. I think $4 million is about right given the potential exploration upside. For roughly 300K oz of gold they are paying just $35 per ounce in the ground or so. I think there will be a retained royalty on the project and if its more than 2% that would be an impairment on value. Otherwise its a good deal.
Sounds like a good story, but I think extreme caution is warranted for the short term. Note that this placement @ 5 cents closed at the end of June:
https://www.goldbull.ca/news/qx-metals- ... -financing
So the shares will shortly become free trading that are a 10-bagger on day one. Even the warrants are a huge win. Some of this paper is going to be dumped on Oct 27th no matter what the fundarmentals. I suspect we are going to be told about a very large placement too just before this selling event. They need to raise cash for all of that exploration plus the acquisiton costs.
I would be tempted to short a stock like this for running too far to fast but in this world, gold could easily make another huge move or the stock could be featured by a paid newsletter pumper and its just too risky. If I get a shot at cheap shares in a couple of weeks I will be a buyer.
Canadian Junior Gold and Silver - research report, mine visit report, discussion, comments, information for a specific company. Hui commentary by Dsquare.
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