Strong end of summer close for Tocvan - timing better.Great to see the renewed buying in Tocvan, Friday closing at $0.63 on 240,000 shares, and for the week, over 700,000 shares. It sure didn't take long for the cheap stock below $0.60 to vanish. It is already September, the summer July and August quiet period is over, and I suspect the drills will be turning at Picacho and Pilar later this month (fall for certain). Tocvan is in a strong cash position with $5.125M to be released over the next 2 years. Nothing has changed from my observations, share structure will remain one of the best in the market, for a company with over 22,000 m of drilling and soon to release a Maiden Resource estimate, when you look at resource in the ground, price of gold, and potential overall value of Tocvan in the future. All lights are on for me. A nice undervalued play.
Rising gold prices into the fall and December are likely, given the historical nature of gold cycles. Gold has retreated from its high, and now a US inverted price (yield) curve suggests we should be in for a switch. With Tocvan sitting in one of the highest gold producing locations in the world (Sonora), I am hoping they are positioned to take advantage of the next gold price swing.
Tocvan has talked many times in the past about a producing open pit mine, my guess this is getting closer to reality. From my rough calculations, likely Pilar will prove out close to 1 M onze resource with more drilling in the next year (a solid 500 K to 750 K gold reserve already drilled). I don't know how much they can produce per year, but feasibility comparisons of other mines in the area, i.e., size, production and stage, and that the main pit at Pilar starts basically at the surface, I would think we would be looking at 15 years plus production around 20,000 oz per year or more, that relates to about $35 M per year USD, and since the Sonora area has one of the lowest cost labour production margins in North America, and that Tocvan has already stated they are in contact with strategic investors in the area, I am assuming if any of these releationships become a reality, Tocvan will be in an excellent position to reap significant cash flow to the bottom line. I believe if they get it right, it the low share structure and market capitalization that could drive the price to new highs in the next year, likely well worth the wait.