We saw the US dollar index fade last week and the price of gold rally following the Tuesday election day. Several big cap mining stocks also charged higher. You can see how the price of gold broke through a simple triangle consolidation pattern last week on this chart.
The last time gold smashed through a triangle consolidation pattern like this was at the end of June when it completed a three month consolidation phase. After peaking in early August this last consolidation also has lasted roughly three months.
Such periods make for good entry points in the best mining stocks. Right now shares of small cap miner Inca One Gold Gold Corp. (OTCMKTS: INCAF) are lined up to breakout and charge higher.
Inca One Gold trades on the US OTC under the symbol INCAF and on the Canadian TSXV under IO. As you can see the stock has been trading in a triangle consolidation pattern with a high of 65 cents in October and support around 55 cents, the points of its 150-day moving average. I own the stock and it looks to me like it is poised to rally hard now.
The stock has a market cap of roughly $15 million US dollars and the company operates two fully permitted gold processing facilities in Peru. It produced 25,000 ounces of gold from these operations in 2019 and over $100 million in revenue in the past five years. Most small cap exploration stocks with zero revenue reach market caps of over $25 million US dollars in gold bull markets, so I see Inca One Gold as a great value play.
In October the company issued earnings and reported that it produced 3,472 ounces of gold in the last quarter. “The highlights for Inca One during the third quarter were the improvements in deliveries and processing over the previous quarter, which allowed us to restart processing operations at Chala One,” stated Inca One President and CEO, Edward Kelly. “And despite the near total economic shutdown of the country, Inca One was able to continue operations at reduced levels by utilizing strict state approved COVID-19 quarantine and sanitation protocols. This allowed the Company to scale up operations rapidly as mineral supplies increased. With three months remaining in the year, we are pushing hard to match and surpass pre-COVID-19 production levels.”
In September the company also announced that it was setting up its own bullion store to sell its gold directly to consumers. You can even pre-order gold at a discount by being a shareholder by going here. I can see a play of buying shares here to become a shareholder and if it goes up like I think taking some profits in a year to buy some physical gold at a discount!
-Mike
Disclosure: Mike Swanson owns shares of Inca On Gold Corp. and because it it is a small cap stock with a market cap of less than $100 million he has put himself on a trading blackout on it and will not buy or sell a share of it for at least 30-days from the date of this post. Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which was compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Inca One Gold Corp in August. This third party paid Timingwallstreet Inc., $5,000 to produce and disseminate this and other similar articles and send traffic to them through paid advertising online campaigns for 30 days beginning August 1, 2020. Timingwallstreet, Inc. is in talks to do a similar paid campaign for December. This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.
