As I have mentioned in a post on October 26, I believe we saw gold make a key bottom several weeks ago when the price of gold began to form a positive divergence against the US dollar. My favorite indicator for gold and mining stocks is the GDX/GLD and it actually turned up before that. I believe that means that going forward now is a good time to buy gold stocks. Of course, this is all a part of a bigger inflationary trend, and there are also metals that are performing better than gold has, such as copper. Phoenix Gold Resources, I believe, is positioned well to benefit from both.
The stock also has been performing better than the price of gold for the past several months, and barely fell at old when gold continue lower in September, as you can see from the relative strength PXA/GLD ratio in the middle of this chart and the gold price below it.
Shares of Phoenix Gold actually went up in September when gold dipped and right now are consolidating in a nice range of 40 cents as support and 45 cents as resistance to make for a good entry point. I’d expect them to do well on the next gold rally, and I think gold can rally through $1800 before the end of this month.
This exploration company has a market cap of around $14.35 million USD. Typically in a metals run exploration stocks like this get to market caps of around $25 million USD. The company has two key properties.
The first is the Phoenix Gold Project is in Battle Mountain, Nevada, USA. Nevada is considered one of the top mining jurisdictions globally, with Battle Mountain being one of the largest gold-producing regions. Additionally, Battle Mountain Mining district is well-known for producing gold, copper, and silver throughout the past decades.The Phoenix Gold Project is within 5 km of Nevada Gold Mines’ (Newmont/Barrick JV) Phoenix/Fortitude open-pit mining operations.
The second is an exploration and development company focused on the York Harbour Copper-Zinc-Silver Project, a past producing mine located approximately 27 km from Corner Brook, Newfoundland. The Company plans to continue drilling the 11 known mineralized zones and test other new massive sulphide targets, like the No 4 Brook showing, while focusing on gaining access to the 400-level and sea level adits.
Just last week it announced the start of Phase 2 drilling on this copper-zinc-silver property. As this press release explains, “The Phase 2 diamond drilling program has been designed to firstly better delineate the known drill-indicated VMS mineralization for future resource estimations and to explore for additional similar mineralization both along strike and downdip. Historical underground drill holes report a number of massive and semi-massive mineralized intercepts between and along strike of the known zones
but without reported assays. At two of these historical intercepts the latest drill holes YH21-13 and 14 have confirmed significant VMS mineralization. Thus, the Phase 2 program will include both delineation and exploration drilling.”
Right now it is the ramp up of this drill program that is drawing more interest to the company. Here are four slides from a company presentation that sum it up.
To view this entire corporate presentation click here.
Disclosure: Mike Swanson is the editor of WallStreetWindow.com and because Phoenix Gold is a small cap stock with a market cap of less than $100 million he has put himself in a trading blackout on the stock and will not buy or sell a share of it for at least 30-days from the date of this post (11/01/2021). Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Phoenix Gold. This third party paid Timingwallstreet Inc., $18,00 to produce and disseminate this and other similar articles and send traffic to them through paid advertising campaigns for 30-days from the date of this post (11/01/2021). 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.