Gold Co. Releases Drill Highlights
Michael Ballanger of GGM Advisory Inc. shares his thoughts on the current news from American Eagle Gold Corp. (AE:TSXV).
American Eagle Gold Corp. (AE:TSXV) recently intercepted 175 m of 1 gram per tonne gold equivalent (g/t AuEq), 275 m of 0.9 g/t AuEq, and 108 m of 1 g/t AuEq, all from surface at NAK.
The stock is down 18.46% this morning to CA$0.53 amidst confusion over the way they reported the results of the Gold Holes portion of their 2024 program. Instead of reporting a "Cu-equivalent" (copper-equivalent) average grade, they reported an "Au-equivalent" average grade, which makes perfect sense because, after all, it was the gold-bearing portion of NAK they tested first.
However, this is mid-August, and as we have seen throughout the spring and summer, traders take these news releases as liquidity events opportunities to capitalize on the volume and they sell. I will be asking Tony Moreau why he picked mid-August when we are only nine trading sessions away from Labor Day.
The results do nothing to alter the potential underlying the NAK project, and they will certainly do nothing to dissuade Teck Resources Ltd. (TECK:TSX; TECK:NYSE) from continuing its sponsorship. However, they have lost retail momentum with this poorly-timed release, so I will be following the "three-day rule" after news comes out. You buy after three days of decline, usually on the third-day opening, so I would guess that at CA$0.40, AE:TSXV represents a decent level at which to add. The risk, of course, is that the institutions decide to rescue the deal later today and turn momentum back up doubtful as it may seem in August, NAK remains a solid project with many more results from the copper zones to report in September.
While I have my position in AE, I am preserving my cash for the Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQB) Buen Retiro project in the vent they launch a funding after Labour Day.
AE:TSXV is a Buy at or below CA$0.40.
Postscript: I just spoke to CEO Tony Moreau and learned that the TSX demanded that they report the results using the dominant metal (in this case, Au) as the grade equivalent.
When asked why he released the results in the midst of the deadest time of the year for junior miners, his response was, "There's no good time to release results," which is not the case based on my time investing in juniors dating back to the 1970s. However, he feels that traders are using his release as a "liquidity event" (as I mentioned earlier) and that it will stabilize and move higher in anticipation of more results from the copper-centric portion of the 2024 NAK drill program.
I would agree with that assessment.
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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. and Fitzroy Minerals Inc.Michael Ballanger: I, or members of my immediate household or family, own securities of: American Eagle Gold Corp. and Fitzroy Minerals Inc. My company has a financial relationship with Fitzroy Minerals Inc. I determined which companies would be included in this article based on my research and understanding of the sector.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 was not paid by the author to publish or syndicate this article. 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.
Michael Ballanger Disclosures
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