Calm Before the Storm, perhap in the eye of the Hurricane? This was one of the lowest volume weeks for Tocvan that I have seen in a long time. The price of Tocvan closed the week at $0.61, basically unchanged from the week before. 11,000 shares passed hands on Friday, but even more strikingly, only 133,000 shares traded for the entire week.
What are these low volume trading weeks telling me?
Good question. There is an old phrase, "the Calm Before the Storm", a quiet period before there is great activity, argument, or difficulty.
My sense is the dinner table has been set and we are just waiting for turkey to be brought out. I know that I have been talking about delays for several weeks, call me optimistic, but I still don't think anything has changed, perhaps just taking longer than most would like.
On the other hand, if there were negative things happening, there would have been more selling pressure. This has certainly not been the case. The only conclusion I can reach is there is something broader happening. Not sure what this might be, but in all my years of trading, the absence of downward price pressure over an extended period of time generally means good things. I am just going to have to wait until Brodie turns over the next card.
As I have said previously, we are in a "long game of Texas Poker and the next card has not been turned over yet".
My experience analyzing trading patterns suggest that Tocvan has a remarkably strong shareholder base as evidenced by the lack of selling week after week. There appears to be a sense of control and consolidation at the $0.60 price this time, i.e. good price support from key brokerages and shareholders not willing to sell at these low prices.
Everyone has been waiting for news, specifically assays from the 700 samples collected across a broad area of Gran Pilar and the re-start of drilling. Neither of these events have occurred, so why are shareholders willing to wait? I think the answer is simple, if Brodie gets this right, there will surely be more value created, thus no one wants to miss out on the potential price upside. Shareholders have been engaged since 2021.
Many have asked me, "what is the potential price upside?". I can't answer this question, but I will say if Brodie manages to 1) fund and operate a 50,000 ton pilot mine which is expandable to accommodate a full production scenario, 2) establish a significant economic resource, and 3) bring into focus the "Blue Sky" upside value of Gran Pilar, the price of Tocvan's shares are surely going to increase. This will take time, but a potentially rewarding scenario I am willing to wait for.
I know I sound like a broken record, but as I look at the broader markets, in particular the price of gold and Tocvan's current stage of development, the future looks very promising. The value proposition remains strong. And now with the acquisition of Gran Pilar, a large untested property where several new discoveries have been recently made, both properties now combined could potentially represent a multi-million oz gold discovery.
In the near term, until more is known about Tocvan's ability to execute on its promises, there really isn't much more to talk about. We know the smaller Pilar footprint is a robust near-surface gold discovery that is potentially profitable by open pit mining, however, we still don't know the size of the resource. This has yet to be published, thus more drilling is required to get to these answers.
The rainy season is over, so perhaps we will see a press release in the next few weeks that will outline exactly what they are going to do. There have been numerous interviews with Brodie and rumors circulating on the internet, but I am a very pragmatic investor who judges a company's progress by what is published in press releases and filed on SEDAR. I am confident more is coming, thus I will just wait patiently, I don't want to sell here based on rumours.
Lastly, the price of gold had a wild ride this week, in particular the day after the election where gold futures dropped nearly $100 USD. I suspect this represented a significant buying opportunity as gold quickly recovered over $30 the next day. I suspect gold's small retreat will be short lived and the price of gold will strengthen in this price range and then eventually make its next upward movement to new highs.
I don't think politics in the US is going to determine the price of gold worldwide, it is the simple supply and demand economics that will drive the price of gold to new highs. Too many countries are backing BRICS and now using gold as a trading currency, thus lessening their reliance on the US dollar.
I will leave you with this quote, " When paper money systems begin to crack at the seams, the run to gold could be explosive.” — Harry Browne
Have a great weekend, with each passing week we get closer to our destiny.