Gold Co. Has a Preliminary Breakout, Now for the Real One
Technical Analyst Clive Maund takes a look at Prosper Gold Corp. (PGX:TSX.V; PGXFF:OTC) to explain why he believes it is an Immediate Strong Buy.
Prosper Gold Corp. (PGX:TSX.V; PGXFF:OTC) has shaped up nicely since it was recommended at CA$0.095 early in July and shows signs of being in the earliest stages of a major new bull market. Before reviewing the latest charts for the stock, we will overview the positive fundamentals of the company again in the context of the emerging major bull market in gold, assisted by slides from its latest investor deck, and then consider the latest news from the company, which is also positive.
The company has two potential district-scale projects ongoing in Canada. The one in British Columbia in the west is the Cyprus Project, which covers an impressive 623 square kilometers. The one in the center of the country is the Golden Sidewalk Project, which is 60 km east of Red Lake and has a land area of 173 square kilometers, as shown on this slide.
Prosper Gold has an experienced and outstanding management team, which includes Peter Bernier, an experienced prospector who, in 2005, joined forces with well-known research geologist Dirk Templeman-Kluit to create Richfield Ventures.
They made a big find in central British Columbia as by mid-2010, drilling had delineated a significant bulk tonnage deposit. The initial resource estimate (indicated and inferred) containing 4.2 million ounces of gold was announced in March 2011, and this led to Richfield being bought out by New Gold in 2011 for $550 million.
New Gold has continued to move the project forward as a potential large-scale open pit mine. The full story regarding this discovery may be read in Award Winning Team.
The effect of the discovery and the eventual buyout on Richfield's stock was spectacular, as the following chart of it from that time shows.
The fact that people like Peter Bernier are on the management team of Prosper Gold means that there is a very good chance of it making a significant discovery or discoveries for the simple reason that if it didn't, he probably wouldn't be there if Peter Bernier can do what he did with Richfield Ventures once, he can do it again.
The Cyprus Property is quite close to AAmerican Eagle Gold Corp.'s (AE:TSXV)NAK Project, which is 60 km to the south in the same metallogenic belt, where important discoveries have been made. Although this doesn't guarantee similar results at Cyprus, it makes success more likely.
The next slide shows the geography of the Cyprus Project and provides details of its main prospects.
Back in February, the company announced the expansion of Cyprus to 61,880 hectares so that it is now amongst the largest in the region, which is a very positive development as the company would not have made this move without good reason, and the announcement followed soon after Prosper acquired a 100% option for the Cyprus project.
Prosper is carrying out a ZTEM aerial survey of the Cyprus Project, and results from this survey could act as a catalyst for the share price. The following slide shows what such a survey revealed at Cobre Panama.
This next slide summarizes the 2024 exploration plan.
The final slide sets the share structure, and on it, we see that of the 40.8 million shares in issue, about 60% are in the float, i.e. less than 30 million, which is a modest figure given how long the company has been around.
Since we last looked at Prosper Gold, the company has closed a $465,000 financing whose proceeds will be used to finance exploration activities at the company's Cyprus Project, and the closing of the financing, of course, removes a constraint on the share price and very soon after that on the next day it was revealed that President and CEO Peter Bernier purchased 715,000 units of the company on the July 25 through a non-brokered private placement which clearly bodes well for the company as it is an indication that the person who knows as much about the company as anyone, if not more, is sufficiently confident of its future that he has acquired a substantial stake in it.
Turning now to the latest stock charts, we see that Prosper Gold has shaped up nicely since it was recommended at CA$0.095 early in July. On its 10-month chart, we can see that right after we looked at it, it broke out of a Cup base and rose sharply to make a 50% gain in a week. After that, it had a normal correction back to the now rising 50-day moving average where it was again a Buy and it still is as it is believed to be in the early stages of a second upleg.
The breakout just described is probably better classified as a preliminary breakout as it didn't break the price completely clear of the base or result in a cross of the moving averages. However, the second upleg should accomplish both, and, this being so, there is thought to be a good chance that the next upleg will be substantially larger.
The 5-year chart continues to show a very positive picture indeed. The most important point to observe on it is the big buildup in volume from last November through to the present which is revealed to have been largely upside volume by the steeply climbing Accumulation line.
This is very bullish and is an indication of the "smart money" position-taking ahead of a major new bull market in the stock. It also means that once all available supply at this level has been soaked up, the price will take off higher and recent action suggests that it is starting to.
We, therefore, stay long, and Prosper Gold Corp is therefore rated an Immediate Strong Buy for all time horizons.
Prosper Gold Corp.'s website.
Prosper Gold Corp. (PGX:TSX.V; PGXFF:OTC) closed for trading at CA$0.135, US$0.0852 on August 15, 2024.
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For this article, the Company has paid Street Smart, an affiliate of Streetwise Reports, US$1,500. As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of American Eagle Gold Corp.Author Certification and Compensation: [Clive Maund of clivemaund.com] was retained and compensated as an independent contractor by Street Smart to write this article. Mr. Maund is a technical analyst who analyzes historical trading data and he received his UK Technical Analysts' Diploma in 1989. The recommendations and opinions expressed in this content reflect the personal, independent, and objective views of the author regarding any and all of the companies discussed. No part of the compensation received by the author was, is, or will be directly or indirectly tied to the specific recommendations or views expressed.Statements and opinions expressed are the opinions of the author and not of Streetwise Reports, Street Smart, or their officers. The author is wholly responsible for the accuracy of the statements. Streetwise Reports requires contributing authors to disclose any shareholdings in, or economic relationships with, companies that they write about. Any disclosures from the author can be found below. Streetwise Reports relies upon the authors to accurately provide this information and Streetwise Reports has no means of verifying its accuracy.This article does not constitute investment advice and is not a solicitation for any investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Each reader is encouraged to consult with his or her personal financial adviser and perform their own comprehensive investment research. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. Streetwise Reports does not endorse or recommend the business, products, services, or securities of any company.For additional disclosures, please click here.
Clivemaund.com Disclosures
The above represents the opinion and analysis of Mr. Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks cannot be construed as a recommendation or solicitation to buy and sell securities.