Stockhouse Ticker Trax is published to subscribers every Monday (annual cost only $99). We focus on best-in-class high growth small companies trading on the TSX and TSX.V between 5 cents and $3 with a market cap below $300 million.
Equity Analyst Danny Deadlock has 30 years of experience speculating on Canadian penny stocks and targets capital gain opportunities and diversification in metals and minerals exploration, energy, and technology.
For experienced investor, Ticker Trax provides and extra set of eyes and ears (idea generation) and for those learning to invest in micro cap stocks, we provide stock picks and market education.
Subscribers receive; (1) new research (stock picks) weeks in advance of being featured on this weekend column (2) exclusive access to our list of junior gold exploration companies (critical for peer valuation), (3) exclusive access to our list of Cash Rich micro cap companies (our Virtual Vulture Fund), which contains 80 companies with almost $3 Billion. Both tables are updated monthly.
Goldquest (TSX: V.GQC, Stock Forum; 51 cents)
www.goldquestcorp.com
Goldquest was a new stock pick May 13th at 30 cents for paid Ticker Trax subscribers. The stock has done very well this past week and prior to the big selloff in gold today, was trading near 57 cents, which would have generated a 90% gain in only three weeks.
It is refreshing to see what we know the junior exploration stocks are capable of. The past couple years has been no picnic for this sector but valuations are so depressed that the upside potential on the better companies is dramatic. Goldquest is proof of that as the company has generated these gains without any news.
As I noted in my original report (provided below), there are several events that we are waiting on and while no news has been issued, I am hoping these gains are a good leading indicator.
It is tough for junior exploration stocks in this market to eat through paper and produce consistent gains – because old shareholders simply want to free up cash as they recover. As the Friday pullback from 57 cents shows, volatility is second nature to these companies but our plan with Goldquest was to wait and see what news unfolds through the summer.
I have another very attractive Canadian Penny Stock company in the Dominican Republic I will be featuring on Monday to paid Ticker Trax subscribers. It also has a very attractive valuation and is trading rock bottom on their chart.
GQC's big run in August 2012 pushed a lot of money towards Dominican gold stocks. Any positive developments for GQC this summer are positive for our Monday pick as I feel this is the next most important junior exploration company in the Caribbean.
________________________________________________________________________
May 13th Ticker Trax Report
Goldquest
www.goldquestcorp.com
Shares Outstanding: 144 million
Cash Approx.: $15 million
4 Rigs Running
2 Important Catalysts Enroute **
If you're not familiar with Goldquest, here is the condensed version: Late May 2012 they hit 231m of 2.4 g/t gold in the Dominican. This is followed up by 159m of 4.5 in July, 258m of 4.5 a couple weeks later, and then a big 234m of 7.8 late August.
From late May to late September the stock moved from 10 cents to $1.95! In the process trading huge volume and is a four month market darling.
Subsequent holes fail to keep hitting big numbers, market for small stocks continues to weaken, and GQC becomes the movie star most everyone forgot about.
The company was smart to raise capital along the way and now has 4 drills running and $15 million in the bank. But other than existing shareholders who rode out a beating over the past eight months, few are paying attention anymore.
Dundee Securities issued an update last week and it has me thinking this is worth speculating on into the summer. Main points from the Dundee report:
- Romero where they had the big drill hits should host (gold equivalent ounces) 450,000 to 1.1 Million on the low side, or 1.2 Million to 3 Million on the high side. Overall grade appears economic.
- A new geophysical anomaly called Guama has been identified. It has high grade copper geochemistry and is located 2km NW of Romero. Appears 3km long and 2km wide. It has significant potential and is larger in size than the entire Las Tres Palmas trend that hosts Romero.
** Over the next few months we will see an initial resource estimate for Romero
** Within a few weeks drilling will start on Guama (in theory this will build new speculation)
The company has too much stock outstanding but for the time being this is intended as a shorter term speculation while the stock has been pushed to a stable low.
If they are unable to replicate 2012 results in the new Guama zone, then we would not follow the company beyond those initial drill results and the initial resource estimate for Romero.
More extensive due diligence can be done by going through their corporate presentation. It makes little sense to reinvent the wheel in this report - which is intended as a “heads up” for those fortunate enough to have spare cash (which is becoming a rarity these days).
https://www.goldquestcorp.com/images/pdf/presentation/GQC-Presentation_2013_04_23.pdf
_________________________________________________________________
Disclosure: Danny Deadlock owns 20,000 shares of Goldquest (TSX: V.GQC).
_______________________________________________________________________