BMR Market Musings...Nov 16Greencastle Resources (VGN, TSX-V)
There are many examples of common sense value on the Venture at the moment, and Greencastle Resources (VGN, TSX-V) is certainly one of them…historically, Greencastle has made a significant run every couple of years and then trades down to cash value or even slightly below…Greencastle touched 8 cents this week – almost its low for the last decade – and closed yesterday at 9.5 cents, meaning its current market cap (4.4 million) is 30% below its working capital position of $6.3 million (as of June 30)…Greencastle’s burn rate is about $125,000 per month…traditionally, the company has funded itself internally through its oil royalties but those have been drying up…an interesting new situation, however, is that Greencastle holds nearly 8 million shares of Deveron Resources and rumor has it the Deveron IPO will be successfully launched later this month at 25 cents…Greencastle put its Blackwater property into Deveron and also took a sizeable position in the company…post-IPO, Greencastle will hold approximately 70% of Deveron…
From a chart perspective, what’s interesting about Greencastle is that there has been a notable divergence between price and RSI recently…this is usually a bullish sign…below is a VGN 5-year weekly chart from John…as always, perform your own due diligence…
