Note: My time this week does not allow me to include a report on Geovic (TSX: T.GMC, Stock Forum, 60 cents), so that will be a story for the week of July 26. It is cash rich and sitting on one of the world’s largest undeveloped cobalt deposits. The value of this deposit is barely above its cash value. Next week I will elaborate on the company and the market potential of cobalt. Some of you may wish to research the company ahead of time.
www.geovic.net
Xtra Gold (OTC:BB: XTGR, Stock Forum; $1.19)
www.xtragold.com
I featured Xtra on Stockhouse back in late February near $1 but have not commented since. The stock is up about 20% but gains to date have been muted. For the past several months we have seen a significant aversion to risk and this has impacted almost all the small stocks (micro caps). The problem became worse as we entered summer – although this was to be expected. Many stocks have drifted near their 52-week lows but Xtra has managed to hold their own.
On July 15, the company released a 43-101 technical report on their Kibi project in Ghana. The only reason someone does this is to list in Canada. Many Canadian and overseas investors will not touch the OTC so a TSX listing is critical for a junior exploration company. Canada is well known globally as being a primary source for raising exploration capital. A TSX listing (and even the 43-101 report) not only raises investor awareness, but is a stamp of credibility. If they can list in Canada, it should help the share price considerably.
I have also heard they will start a big institutional road show in New York this week.
Snapshot
Ghana is one of the more business-friendly countries in Africa. It has 13 large-scale mining operations and some of the most significant gold discoveries on the continent.
Xtra owns five concessions in the Kibi Gold Belt in the eastern region of Ghana. The properties had more than $20 million spent on them from 1990-1994 to define the reserves of the placer deposit and place them into production. Operations were suspended in 1994 due to low commodity prices and difficulties finding financing for the properties. There was no further development until 2001 when they were purchased for $5 million.
The company is focusing on an area 80 km from the roughly eight million ounce Newmont Akyem gold project. They control a large land position in the highly prospective and under explored Kibi-Winneba greenstone belt ("Kibi Gold Ridge"). This region is adjacent and geologically similar to the Ashanti Gold Belt (116 million ounces of proven gold reserves).
Equally important, XTGR has a very strong management and exploration team.
Disclosure: Danny Deadlock owns 5,000 shares of Xtra Gold (OTC:BB: XTGR) purchased in March.
Current and past reports are archived on our Stockhouse message board at: https://stockhouse.com/Groups/GroupInfo.aspx?g=50540
Danny Deadlock has specialized in micro cap and small cap companies for over 25 years and is a registered member of the Stockhouse community since 1997. You can find his website at www.MicroCap.com - a service that has specialized in TSX and TSX.V penny stocks since 1998. You can also email Danny at microcap@telus.net.