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My Top Small Cap Stock Pick For September Is Deep Value Play Carlyle Commodities (OTCQB: CCCFF)

My top small cap stock pick of the month, in the gold and silver exploration sector, is for shares of the company Carlyle Commodities, which trades as CCC on the Canadian Stock Exchange and as CCCFF on the US OTC. The company has a market cap of around $2.5 million USD, making it a deep value play, as most small cap exploration stocks reach market caps of at least $25 million during a metals bull run. We have seen a recent dip in gold and silver prices in the past few months, which has brought a nice buying opportunity into this sector. Shares of CCCFF, though, have not dipped much at all compared to most small cap exploration stocks, which is a display of strong relative strength for it in the financial markets. That is often a characteristic of a top stock pick.

Take a look at this chart, showing the action so far this year in the stock.

You can see how the stock has been trading in a narrow range for about a month, with resistance in the 13 cents area cents and support around 10 cents. It is right in the middle of that range, so buying here, makes for a good trading entry point, in a sideways basing pattern in this stock – a consolidation that has taken place while gold and silver have pulled back.

In fact if you look further it really has been going sideways now since March! That means it is going through a long stage-one base phase.

That year long chart shows this price action in perspective. You can see how it could breakout here for a big gain.

Last year saw a big drop in metals and energy stocks also pulled back, along with most commodity stocks, most of this year too, but shares of Carlyle Commodities simply went sideways this year and now are in a position where they could breakout for good.

You have to understand what the company is doing to know why.

It has 100% ownership of the Newton Gold Project located in British Columbia, Canada. This project consists of a 100% controlled tenure package totalling approximately 24,000 hectares. According to a June 2022 NI 43-101 resource report this land is containing 861,400 oz Au with an average grade of 0.63 g/t and 4,678,000 oz Ag with an average grade of 3.43 g/t. Mines close by, include the Artemis’ Blackwater Project (permitted and in development), as the closest analogue, and just 180 km northwest; Taseko Mines’ Prosperity Deposit; Huckleberry and Equity Silver.

Here is an overhead shot of some of the land.

Here is closeup of some of the ground, to show you why it is exciting.

Here is some of the work being done on it.

Exploration companies like this buy rights to mine and explore a property to prove up a deposit and demonstrate that it is feasible to mine it – or to show that it is even more valuable than it already is.

It is drill programs that do this, and the company has been doing some initial drilling on the property to pave the way for more, and hopefully provide its shareholders with positive news flow. That’s the fundamental catalyst that may explain why the stock has been so strong in light of the selling in the metals markets in the past month.

In January the company announced “that is has commenced Phase 1 diamond drilling at its 100% owned Newton Gold Silver Project near Williams Lake, British Columbia.”

“The Company’s Phase 1 diamond drill program is intended to test numerous high priority targets with aims of increasing both tonnage and ounces at the Company’s current National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) resource calculation. The initial focus will test several zones of felsic volcanic host rock that are outside of the current pit-constrained resource calculation with the intention of discovering new zones of mineralization.”

This spring it announced that it completed its first exploration drill hole in a detailed press release, which explained that the program “is intended to test high priority targets with aims of increasing both tonnage and ounces of the Company’s current National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) pit-constrained inferred mineral resource estimate (for further information, see the technical report entitled “Technical Report on the Updated Mineral Resource Estimate for the Newton Project, Central British Columbia, Canada” dated effective June 13, 2022, available on www.sedar.com and at www.carlylecommodities.com (the “Technical Report”)). The initial focus tested a key zone of felsic volcanic host rock that is outside of the current pit-constrained inferred mineral resource estimate with the intention of discovering a new zone of mineralization. The initial target’s main objective is to test continuity of the well mineralized main felsic domain, which remains open at depth below approximately 500 meters from historical drilling. Carlyle successfully completed this first hole by drilling to a depth of 1,001 meters directly through the current inferred resource and extending to untested sections of the felsic domain at depth. Visual reports indicate that much of the host rock encountered throughout the entire 1,001 meters of drill length encompasses the felsic volcanic unit, which historically hosted much of the gold and silver mineralization within the current inferred resource (see the Technical Report for further information).”

The company then followed up with more drill results with a hit at drill hole N23-091.

According to a company release:

Mr. Jeremy Hanson, Director and VP Exploration, stated: “We are very excited with the results from drill hole N23-091 which extends the known mineralization associated with the main felsic domain more than 150 meters along trend, and remains open. These results certainly support our understanding that the Newton Project contains numerous zones that continue to expand the deposit, and that the Newton Project may contain additional highly prospective underexplored felsic domains, which the Company intends to test in subsequent drill programs.”

Mr. Morgan Good, Chief Executive Officer, commented: “After complete review of Carlyle’s first drill program at the Newton Project, the Company is thrilled to have confirmed such consistency and continuity of the main felsic volcanic domain to a depth below the known limits of the inferred mineral resource. Having drilled two deep drill holes and intercepting more than half a gram of gold in both gives us confidence in the Newton Project’s overall size potential. We have learned there are various higher-grade zones, some near the bottom of the known inferred mineral resource, which is rather interesting, but more notably some close to surface, which leads us to believe there may be a higher-grade zone of interest to target early in a phase 2 drill program this spring.”

It is happening.


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Disclosure: Mike Swanson is the author of this article.  Because Carlyle Commodities 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 (09/11/2023). 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 Carlyle Commodities. This third party paid Timingwallstreet Inc., $4,000 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 03/01/2023. 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.