Post by
lifegoeson on Apr 23, 2022 10:56am
Strong week for Tocvan in terms of price and buyer interest.
TOC closed at $0.95 on volume of 207,000, one of the higher volumes in a long time. TOC traded about 706,000 shares for the week and about 2 M shares for the month of April already. I suspect part of this increased volume and upward price movement has to do with the success of the first hole from the Phase III drilling and the overall extensive exploration program for Pilar, with now over 22 km of drilling.
It is nice to see TOC strengthen, both in price and buying interest, especially yesterday when the DOW was down almost 1,100 points, gold retreated somewhat, and crude oil remained over $100 USD. So many variables are coming into play at once, i.e., inflation, rising gas and house prices, rising interest rates and of course, the Global disruption due to the Ukraine/Russian war. It is an understatement to say this is complicated. I believe, however, that over time these factors will strengthen the price of gold and silver, which as we know, makes mining a more lucrative and viable business.
As I said, I believe the recent buying interest in TOC is due to the release of assays from their first drill hole in Phase III, quote,
“…. drill hole JES-22-59, a core twin of reverse circulation drill hole JES-20-32, which returned 94.6 metres at 1.6 grams per tonne Au. Drill hole JES-22-59 was previously mentioned in a news release (see NR Feb. 15, 2022) where a mineralized breccia host was observed in drill core correlating to the Main zone at Pilar. JES-22-59 returned 116.9 metres at 1.2 g/t Au and seven g/t Ag, including an impressive 48.1 metres at 2.8 g/t Au and nine g/t Ag. High-grade gold-silver mineralization was recorded adjacent to a heavily faulted and altered zone returning 10.2 metres at 12 g/t Au and 23 g/t Ag, including 4.2 metres at 28.3 g/t Au and 49 g/t Ag. ….”
WHY do I believe this – simply put, these are excellent assays, but more importantly, it looks like they have finally delineated the potential feeder system at Pilar, which is evidenced by the significantly elevated levels of both gold and silver. The entire property is generally underpinned with gold, but this makes it more exciting.
There are still several important deliverables in the coming months. First are 3 step-out holes on trend with this hole (JES-22-59) in the Main Zone at 25, 50 and 100 m. These are infill holes which will allow for critical information regarding release of TOC’s maiden 43-101 compliant resource, and subsequently a direct valuation calculation for TOC. We don’t know yet how many oz of gold equivalent the resource contains, my hopes are more than 1 M oz but who knows for sure until this calculation is made (greater than 700 M oz would also be a great, more than 1 M oz would be a bonus).
Let’s look at the financial metrics for TOC if, for example, there was 1 M oz gold equivalent identified. TOC has 31.7 M shares outstanding, 1.5 M options, and 1.66 M warrants, for an amazing fully diluted position of only 34.8 M shares (with options and warrants in the money that could be exercised and add money to the bank of TOC without further dilution). Thus at $0.95, this would make TOC’s market capitalization only $33M. No wonder people are buying TOC at these discounted share values.
In addition, there are two other holes from Trend-4 to be released, and the metallurgy results which are important in bringing Pilar to production. Lastly, I am hoping more money can be raised at higher prices to allow for an accelerated drill program at Pilar and to get a drill turning on Picacho, another very exciting property where they are currently locating drill targets for the potential start of a summer drill program.
As each weeks passes, I am getting more excited about the future prospect of TOC. I have owned TOC for a couple of years now. By the simple fact of an excellent share structure and excellent drill results, and the upside to raise capital with minimal share dilution, makes me hope we could see additional share value. If one assumes TOC has 500, 1M or even 1.5 M oz equivalent gold, with the potential for an open pit heap leach process, since the resource is close to the surface and the material is similar to other producing mines in the area, I believe TOC is undervalued at $0.95.
Time will tell if my analysis is correct. As everyone knows, many factors need to come together for TOC to become a success and potential takeover target. Conduct your own due diligence and come to your own conclusions. What I write about is self-serving since I own shares of TOC, so of course I want the price to go up. It is like the movie, “Polar Express” - can you hear the bell….?
My twitter handle: @Goldbug_101