Well have been doing alot of research on the gold sector as Ive been wanting to increase my exposure
Wanted to choose what I thought would be a LT undervalued play
My criteria was simple
1. Needed to have a lot of gold
2. Grade of the deposits needed to be decent ie 2g/t Au+
3. Needed to have a reasonable amount of cash ie at least $10m - $15m and little to no debt
4. Needed to be at or near share price lows and not because it was going bust
My search narrowed it down to BDG or CRK
I chose CRK because
1. BDG is already in production and while profitable will need to show a significant extension to mine life befor it will get a strong re-rating
2. CRK have $24m in the bank no debt and a large 4.2Moz gold resource grading 2.6g/t (50mt'[email protected]/t Au)
3. On a 5 yr chart the company is trading at its all time lows and while it is worrying to see it fall below the 3yr support line of 50c I am guessing this has alot to do with the death of its founder Frank Carr
It is sad to see the passing of the companies founder and leader and I am guessing this will make the company a takeover target
that and the fact that the company is trading on an EV of around $10/oz Gold
CRK Price at posting:
44.9¢ Sentiment: LT Buy Disclosure: Held
