Opinions
Dennis da Silva
Continental Gold Limited
CNL-T
COMMENT
Jun 10, 2015
Stock price when the opinion was issued
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Not for widows and orphans. Had a nice bounce back. With gold price moving up a lot of people are getting out. Companies have been oversold and it is just bouncing back here. BMO raised rating so it popped. Well managed and costs are low. If silver and gold moves up there will be a lot of torque.
For a long shot, it is not a bad company. They have a pretty big find in Colombia. Thinks it is tracking almost 25 million ounces and not showing any kind of value right now. If you want an exploration play with good upside, this would definitely be one. This is exploration and he feels there is way less risk on the producers right now.
Newmont is one of the more active majors out there and their pipeline suggested a need for them to take Conga out of reserve, which was a big impact on their reserve. Colombia would be a new jurisdiction for them, and believes they wanted to take a significant footprint in this, but not do an overall takeover until they were more comfortable with Colombia. The asset is great, but he has some issues with some of the resource, but in terms of some of the development, they have a top-notch COO developing the project and thinks Newmont is very comfortable with it. This looks really good but he is not interested in development plays. Most of his money is going into exploration right now.
Prefers to be in companies that are in the later stages of building something or are in production. There are permitting issues. Colombia does not have a history of production, although a competitor did get permitting recently. He would hope that it gets permitted in the 3rd quarter. On its way to becoming a $10 million resource. Once that permit is in hand, he would be surprised if the company actually builds the project, but thinks it will be taken out.