The price of Tocvan pushed over the $0.60 barrier on Friday to close at $0.62 on 94,700 shares. This was one of the highest volume days lately, with Tocvan trading only 166,000 shares for the entire week. I find it amazing that so few people sold shares, but I am not surprised.
Starting to feel like the quiet days of summer are behind us, Tocvan traded about 1 million shares in August, and only 783,000 shares for the month of July. The good part, this light trading pattern is an indication that Tocvan is tightly held by shareholders who aren't about to give up their stock easily.
I have been asked many times, "who is the big seller through Anonymous"?
First let me provide some background on the acquisition of Pilar. Tocvan acquired 51% of the Pilar Gold Project located in Sonora, Mexico in 2019 from Colibri Resource Corp. Since then Tocvan has paid Colibri $525,000 in cash, conducted over $2 M in exploration, and given Colibri 5 M shares. Tocvan is current and compliant with all terms and conditions of the acquisition.
If you look at Colibri's financial statements from June 30, 2023, it will become crystal clear that Colibri has exited all their Tocvan stock except for 100,000 shares. I suspect they are now completely gone but we will have to wait to see the next filing to see if they sold their last 100,000 shares. However, there is a silver lining as these shares have been moved into much stronger and long-term hands, and now Colibri has no stock left to sell, so they can't interfere with the trading pattern of Tocvan. From Colibri's financial statements from June 30, 2023;
"The Company acquired 2,000,000 common shares of Tocvan Ventures Corp during fiscal 2019 as partial consideration for the option of a mineral property as described in Note 9. During fiscal 2020 the Company acquired an additional 1,000,000 shares and sold 1,650,000 shares and realized a gain of $50,484. During fiscal 2021, the Company acquired an additional 1,000,000 shares and sold 1,329,900 shares and realized a gain of $115,414. During the year ended December 31, 2022, the Company acquired another 1,000,000 shares, sold 1,020,100 shares and realized a loss of $112,333. During the six months ended June 30, 2023, the Company sold 900,000 shares and realized a gain of $32,631. The fair value of the shares has been adjusted to reflect market value resulting in a cumulative gain of $62,800 (December 31, 2022 – loss of $100,000)."
It is hard to imagine that they have sold 4.9 M shares since 2019. Some would say this is good money management since they sold a premium property, kept 49% of the asset, and cashed out for millions of dollars. Unfortunately, they used Tocvan's promotion as a "Cash Cow" for years while Tocvan created significant value in the Pilar asset. Tocvan now has over 23,000 m of drilling and is in the final stages of optimizing methodologies for mining operations and production facilities, and acquiring a larger land package.
Tocvan is now in a sweet spot, they can acquire 49% of Pilar from Colibri to own 100% for only $2 M, and for only another $1 M, eliminate the smelter royalty completely. Tocvan has a very strong and deep pocketed financial partner, Sorbie Bornholm LP and Orrick, Herrington & Sutcliffe (U.K.) LLP, who has already participated in two financings and likely have contingency approval by their Board of Directors to undertake follow on financings to protect and maximize their return. Tocvan has only 40 M shares outstanding, and can easily raise capital to gain 100% control of Pilar, especially if the price is higher to minimize dilution. They also have funding in place for over the next two years through Sorbie.
Combine this with the recent binding letter of intent (LOI) to acquire a massive land package adjacent to and surrounding Pilar, this would represent one of the best land consolidation packages in Sonora, Mexico. This will surely attract local attention from companies in the area looking for new advanced properties to acquire.
A quote from the Press Release from July 27, "Tocvan Ventures Corp. has entered into a binding letter of intent (LOI) with a private title owner for the 100-per-cent acquisition of 2,172.7 hectares immediately adjacent and north of its Pilar gold-silver project in Sonora, Mexico. The area includes highly prospective zones that have seen limited exploration to date, however recent placer mining suggests untested gold and silver potential. Prior to closing a definitive agreement, the acquisition is subject to a 60-day due diligence period effective July 25, 2023."
As I have mentioned before, the resource markets have been in a significant slide over the last several months. This is typical during this time of year, but even more pronounced this year. Early stage plays generally decrease the most in price, whereas more advanced mining plays only pull back slightly. Tocvan basically held over $0.50 for most of the year, and just moved back up over $0.60 on Friday on good volume.
The fundamentals of Tocvan have never been stronger. What are the news catalysts that might move the stock higher?
The most significant event in my opinion would be to finalize the land acquisition around Pilar. This would provide significant future negotiation leverage by allowing a turn key mining operation consisting of crushing, processing, and large heap leach pads to be located on Pilar's property, resulting in considerable savings.
More importantly, don't underestimate the "Blue Sky" potential this land acquisition represents. This is a large property, with existing old mine workings, as well as ongoing surface alluvial mining along old stream beds. There is a 60 day due diligence period that started July 25, thus we should be close to a decision. This new property could easily double or triple the overall resource value of Pilar, perhaps even more if the feeder system is discovered. Drilling should begin soon on Pilar to test new targets, but more importantly conduct infill drilling which will lead to calculation of a maiden resource. Drilling should also begin soon on El Picacho, a highly valued property that Tocvan already owns100%, and from what I have seen thus far, Picahco represents one of the best land packages in that area.