Castle is hugely undervalued On 25 april a small unknown junior copper explorer named Colorado Resources (CXO) announced its first drill hole of 242m at 0.63% Cu and 0.85 g/t gold on their North ROK property located 190 km north of Stewart, B.C. The shares exploded by an amazing 600% and have given the company a market cap of $39 million.
Castle's Grand Duc project is also located north of Stewart, B.C. and has a NI 43-101 resource of 377 Million lb in the M&I category and 1.4 Billion lb in the inferred category. Grades are very high at 1.5% on average and the PEA gives the project a pre-tax NPV of $388 Million.
But guess what, the market cap is a ridiculous $14 million at present, almost 1/3 of CXO's. Investors must have lost their mind pushing the Castle shares down so much and in my opinion it can only be explained by the forced selling of several million shares as a result of fund redemptions.
The good news is that the selling pressure seems to be drying up, and some smart investors like Dominick & Dominick have been bottom fishing for that reason. They know a rebound is iminent, it is just a matter of time. I hope the company will do more about investor relations as I doubt it shows up on the radar screens of cash rich mining investors waiting for the next ten bagger.
We may need a catalyst and I will contact management about their plans in this respect. They hired Mike Baybak for promotional work, but quite frankly I haven't seen any research from him that triggered buying interest.