Great close on Friday, sign of things to come?Tocvan closed on Friday at $0.52, up $0.07 on 235,000 shares. The recent share price has been depressed due to a combination of tax loss selling and aggressive selling from Scotia and Anon, but looks like this was rapidly cleaned up on Friday, surging the price of Tocvan over $0.50 on strong volume
Interestingly, Tocvan traded 933,000 shares for the week, and about 3.1 M over the last 4 weeks. Nothing has changed fundamentally, except perhaps 3 M shares have been moved into better shareholder hands (me included). This last month has seen significant progress with maiden drilling complete at El Picacho and near commencement of bulk sample from Pilar. Needless to say, there is going to be plenty of news moving forward into 2023..
No one will argue that the junior resource sector and overall stock markets have been in a downturn since the spring, just look at almost any stock chart, the downturn has been devastating for some. In fact, just look at your own portfolio, all prices are generally down (mine included). There are two types of stocks in the junior resource sector during a downturn of this type: 1) early stage paper plays and 2) mid-stage, more advanced stock companies. I can point to several companies that have begun to consolidate already and more will be consolidating this winter (1:3, 1:5 and even greater consolidations). These companies have generally issued significant shares at very low prices with the promise of great returns. It is unfortunate when one gets caught in a consolidation, but not unexpected. Generally, the stock promotion didn't work in these cases, so the only path forward for them to be able to raise money again is to consolidate. One almost never wins after a consolidation, but hopefully the lesson was well learned.
The more advanced resource companies with significant drilling and potential resources already discovered, are able to more effectively manage a market downturn without consolidation. The key lesson here is that they didn't finance at low prices but instead attracted higher pricing capital, and continued with execution of their development strategy. I believe Tocvan is one of these companies.
A lot has happened at Tocvan over the last year. Not to repeat myself, one has to keep in mind some of the key metrics that defines Tocvan from many other companies at this stage of development. The four top metrics are: 1) excellent advanced properties (Pilar and El Picacho), 2) promotion and investor awareness, 3) keeping the share issue as low as possible by raising capital at higher prices, and finally, 4) management that is responsive, gets the job done and only looks at future potential. not share price. If you see a company that has consolidated, just look at management and the Board, generally many of these people use the consolidation cycle as a means to an end, it becomes a job of promotion not resource development.
Pilar has now drilled over 22,000 meters, significantly de-risking this property as evidenced by quote, "Tocvan Ventures Corp. has entered into an agreement with a neighbouring private mining company for the completion of its first bulk sample from the Pilar gold-silver project in Sonora, Mexico. Bulk sample material will be prepared early in 2023 for processing by heap-leach method at a private mining operation less than 25 kilometers to the west of Pilar. Up to 1,000 tonnes of material will be processed for the bulk sample, which will aim to provide a more detailed account of expected head-grade and recovery percentage of gold."
The reason they can do a bulk sample of this size is because the resource essentially begins at the surface. Pilar drilling will start up again soon with the goal of in-fill drilling and publication of Pilar's Maiden Resource (not sure how big this is, but 1/2 M to 1 M oz gold is certainly realistic). Results from the 1,000 ton bulk sample will ultimately pave the way to a production decision in 2023.
If it hasn't been exciting enough for you over at Pilar, read on about El Picacho.
El Picacho was acquired in late 2022, and from what I have seen, exploration has been fast tracked with drilling completed already by the end of the year (10 plus holes). Mineralization is exposed at the surface, and several areas through the property have extensive mining activities and very deep mine shafts. One has to remember, these old workings target only high grade gold, but the potential for El Picacho to hold significant gold between and within these old workings, is very high. Locals in the area think that El Picacho could be host to the next multi-million oz resource based on similar characteristics of the 3 M oz Au resource being mined at San Fransisco only 18 km away.... a description of El Picacho from their Press Release is below....
Quote, "The El Picacho Gold-Silver property is interpreted as an orogenic gold system within the regional Caborca Orogenic Gold Belt known for producing gold mines that include La Herradura (>10 Moz Au) and San Francisco (>3 Moz Au). The project is 140 kilometers north of Hermosillo and only 18 kilometers southwest of the producing San Francisco Mine. The Project totals 24 square kilometers. Five primary zones of mineralization have been identified across the property totalling over six kilometers of prospective trends. Surface sampling and historic workings have identified high-grade gold and silver values. The project has only seen widely spaced reconnaissance drilling with no follow-up. Tocvan believes this provides an excellent opportunity for discovery of a multi-million ounce district.".
Very importantly, Tocvan is fully financed for almost two more years, with more than $5M. This is a huge endorsement from a large UK Investment Fund. I also suspect if the results are good at El Picacho and as Pilar moves towards production, this group will further be able to backstop financial needs as required and finance potential production, having a group like this is a feather in management's ability to raise capital. The good part is as the share price goes higher, any future financing will be strategic and less dilutive to the share structure.
Quote from Press Release.... "Tocvan Ventures Corp. has closed a private placement to an institutional investor to raise an aggregate amount of $5,125,000. The proceeds from the placement will be deposited with a third party escrow agent and delivered to the corporation in monthly tranches over the next 24 months pursuant to the terms and conditions of a sharing agreement (as defined below) and an escrow agreement dated June 28, 2022, between the corporation, Sorbie Bornholm LP, and Orrick, Herrington & Sutcliffe (U.K.) LLP. The funds will go toward the advancement of the Pilar and El Picacho gold-silver projects in Sonora, Mexico, and for general working capital purposes."
Lastly, MANAGEMENT.... Brodie Sutherland, CEO, has been key to moving the goal post. He recently added two new Board Members, both are significant, Wintermantel (20 years) is a critical link to old and new shareholders in Europe, and Dominguez (48 years) has extensive mine development experience, as well I expect a huge following in the Sonora area of Mexico and beyond.
Quote from a Press Release... "Tocvan Ventures Corp. has added two new directors to the board. The company welcomes Ralph Wintermantel and Luis Manuel Arroyo Dominguez to the board of directors. Mr. Wintermantel, a resident of Germany, brings over 20 years of financial market experience and provides a crucial link to the company's strong European shareholder base. Mr. Arroyo, a resident of Mexico, brings an impressive 48 years of professional experience in mine operations and will be an excellent resource with his background in moving projects from exploration to production."
Sit back, relax, and have a Merry Christmas and Happy New Year. I am hoping that 2023 will be the watershed year for Tocvan with share prices running to new all time highs, start of production at Pilar, and some of the best drilling results to date at El Picacho.