Gold Canyon is Heating up – Institutional Buying is Evident
Gecko Research, Mar 6, 2015
As we dig deeper in our due diligence on Gold Canyon (gcu.v) and tell the story from our perspective, it’s evident to us that one or several institutional buyers have been (and still are) buying shares in the open market. In this article we will try to shed some light to that thesis and what they might find so attractive that the retail investors have missed.
Institutional Buying
We have been following the day-to-day trading of GCU very intensely for a while now and when we were buying shares around 16.5-17 cents, we noticed that someone was iceberging (see below) their order at 16.5 cents. This is a typical strategy for deep pocket institutional buyers and we think they weren’t very successful at that level. They probably picked up 400,000-500,000 shares before GCU started to move higher.
We are simplifying a bit here, but close to 70% of the company’s outstanding shares has traded in the last three months and although some of those shares are traded several times, a large huge chunk of that was Sprott and Pinetree dumping (as we explained here) their holdings. We are making a guess here that someone has been accumulating between 20-40 million shares at the very least in Gold Canyon lately and what we can say with a 100% certainty, those shares have not been bought by retail investors. Someone is still out there buying and the only conclusion we can make from that is that institutional buying is strong in GCU at the moment.
Life Cycle of a Junior Explorer
Placing Gold Canyon in the graph below, it’s our opinion that Gold Canyon is past the “discovery cycle” and has already bottomed out in time for its next cycle. We have seen the speculators leave (Sprott, Pinetree and very likely many retail investors) and now it seems like institutional money is moving in. Our whole thesis for our investment is that GCU is ripe for a take-over, so we see someone else moving the Springpole Gold Project forward with the next step being to take the Springpole Gold Mine to a full feasibility study.
Let’s assume that we are right and that one or several institutions (take your pick: funds, large-cap producers, Chinese interests) are trying to acquire a strategic position in GCU, what attracts them besides what’s already known? Sure, the 5.1 Million ounce open pittable deposit in a great jurisdiction is the obvious reason. But as we have touched on before, we suspect that the potential at Springpole is greatly understated and perhaps even misunderstood.
We have had a friend of ours, a geologist who we consult when we ourselves lack in knowledge and understanding of the technical aspects, go through all the technical reports and other available information. If you look at the map of Springpole below, all the drilling that has been done is in a small corner of the property, to the north-west. It’s clear that most of the project has never been drilled and if what our geologist told us is correct, Springpole could very likely become a >10 Million ounce gold mine. The deposit is open at depth, to the south and to the southeast.
The Springpole Gold Mine put in perspective
Springpole’s resources are 5.1 Million ounces eq. (4.4 Moz Indicated, 0.7 Moz Inferred). When one prepares a bankable feasibility study one has to do infill drilling to prove up the resources into reserves, so in that sense this comparison is not 100% accurate, but it will still get you an idea of just how undervalued Gold Canyon is. Two other large Canadian projects:
1) Goldcorp has one of their flagship properties in the Red Lake district, the Red Lake Mine, which produced 414,000 ounces in 2014. That mine has 2,550,000 ounces in Proven and Probable reserves.
2) Goldcorp recently acquired Probe Mines (valuing Probe at the time at C$526 Million) mainly for its Borden Gold Project. Borden has both higher grade underground resources as well as (perhaps?) open pittable resources, together totaling 4.35 Moz mostly in the Indicated category (similar to Gold Canyon’s resources).
Even if Springpole doesn’t contain a single ounce more of what’s been discovered so far, the current resource alone makes this a world class mine in the making. The metallurgy is non-complicated, the strip ratio is very low and the project is in a country that is considered one of the best in the world.
To be fair, Gold Canyon need to bring the Springpole Gold Mine further ahead in order for a comparison to Probe to feel accurate, but how much should 5.1 Million ounces be valued at in a take-over? C$100 Million? C$200 Million? And assuming we are right, how much should the potential to double the resource be worth on top of that?
Gold Canyon’s market cap is a mere ~34 Mcad at today’s 18.5 cents/share (184m shares x 18.5c) and we don’t want to speculate where a fair bid would come in at, but it sure isn’t going to be near where the stock is trading today. A shareholder’s dream scenario would be if more than one party eventually gets seriously interested, only then would we get a maximized and fair bid for Gold Canyon.
(Iceberging: When large participants, such as financial institutions, need to buy and sell large amounts. Instead of placing a single large order, it can be divided into smaller lots. Usually through automated order mechanisms, iceberg orders are used for the purpose of hiding the actual order size. By doing so, other participants only see a small portion of the total order at a time, the same way the “tip of the iceberg” is the only visible portion of an immense mass of ice)
Team Gecko Research
www.geckoresearch.com
If you like our work, feel free to share this link with your friends for our free newsletter: www.geckoresearch.com/signup
We are not investment advisors and what we write is our own view only. Please read our disclaimer
Let me try that agin:
Rick Rule’s company says:
Meanwhile in Austria things are not looking so good.
It would have been helpful to have been given an explanation as to why Sprott and others would be divesting themselves of this company when other institutions are ramping up their holdings in a significant way.
I just did a search on “Gold Canyon” and tons of stuff showed up. In Cory’s 2/27 post on Gold Canyon he mentions a research article you can find here: http://blog.geckoresearch.com/content/7814
In that article by Gecko Research article I found this:
“Two funds, Pinetree and Sprott (no secret here, everybody knows), have since December been forced to liquidate holdings and Gold Canyon was severely hit by this and we see that as a clear over-reaction. This would be our first special circumstance.”
So perhaps that’s where it came from. The important detail Cory left out was the part about Sprott and Pinetree being “forced” to liquidate holdings . Why they choose to dump their Gold Canyon’s holding instead of other ones is the really interesting question here I’d love an answer for.
Why is it that English and Australian newspapers have so much more information than American?
We also have more nipples.
Wasn’t going to comment Bob……but I could not stop laughing.
Is that udder truth?
Now for something completely different:
http://www.zerohedge.com/news/2015-03-06/wierdest-thing-youll-see-today
Orex well up today.
The mining company not the pharma one.
CFS………..GO OVER TO KWN………………
ANYBODY TALKING ABOUT HSBC…..SHUTTING DOWN THE VAULTS…………
J;
Looks to me that the suckers who thought they were holding gold, but who were, in fact, only holding paper gold, are about to be cash settled upon at the lowest possible amount the banksters can get the price down to.
No physical left?
No need for vaults?
Gerald Celente: “It should be a shock and it’s big news as is the rest of Andrew Maguire’s insights (in his KWN interview). What’s so important about HSBC closing down all 7 of their London gold vaults is that the Spyder Gold Trust, ticker symbol GLD, the custodian of that GLD gold is none other than HSBC….
I always thought GLD was vapor paper.
I always knew HSBC was..
There is nothing about London vault closing on any HSBC official internet site!
Well……..now that is interesting………..
Now we can see that HSBC….is a little tricky devil………….
There’s nothing on GLD website:
Is there a reason……..that London is not mentioned……..I see where it is in other places……………….
Maybe they do not know it yet………………..the spdr……wouldn’t that be a hoot……
“sub custodian” ………..maybe they do not have to mention ….
Hsbc….could use about any language it wants to hid the fact for awhile,
JOBS NUMBERS………………58,000 BAR TENDERS AND WAITRESS ADDED IN FEB……
here is the fact for the BLS…………..BAR LIQUIOR SALES………….
BLS is a Joke, but, they tell lots of jokes at the BARS……….
CATCH the real numbers from TURD F. REPORT…….
thanks…………………j
Menedez attacked Obama over Iran.
So the Bastard dictator is going after Menendez.
Interesting he does not go after any other of the many senators who have been lining their own pockets at the expense of the public.
I had forgotten Menedez did not like Obama’s Cuban policy:
http://thehill.com/blogs/blog-briefing-room/227400-top-senate-dem-slams-obama-on-cuba
This would be comical, if Boehner was not bought and paid for:
http://thehill.com/homenews/house/234766-dems-would-back-boehner-in-coup-attempt
More executive action.
He’s got a pen.
I know where he ought to shove it.
someone said …….Shovel ready……
Apple will replace ATT in the Dow on March 18th.
That’s one way to increase the Dow if QE does not work well enough.
Report on BBC radio 4 news (Which was a World Service broadcast)
HSBC has just given 2 months’ notice to its clients that they are closing down all 7 of their London gold vaults.
It then went on to talk about interest rates in Ukraine. Now 30% for agriculture borrowers!
Then taking about one of the biggest data hacks ever in the US.
Thanks CFS. BBC does care about their reputation and not lie. They do distort with their interpretation. But their facts are usually solid.
This is first direct verification of Andrew Macquire’s information. This is what I like about KWN. Their facts are correct and and fast. As long as you don’t believe their gold $5000 in a year kind of prediction, it is worth listen to. The mainstream media will destroy your gold investment.
THANKS CFS……………..APPRECIATE……sorry to put you to all the work……….j
If you are sufficiently ignorant of Islam to believe it is a peaceful religion, you really should read this:
Government of the people, by the political elite, for the elite and their cronies:
Come the revolution……
Just checked kitcosilver and surprised that silver is actually up compared to yesterday at the end of the day in Canadian $. So if you don’t only look at US dollar instead in the currency you earn and use, it may not as bad as it looks. Since all you properties and savings are in your own money, it is what it counts.
For US dollar owner, does this look like supernova?
HSBC agreed back in December 2012 to pay $1.92 billion to settle accusations that it laundered money for Colombian and Mexican drug cartels.
http://www.huffingtonpost.com/2014/04/08/matt-taibbi-jon-stewart_n_5110632.html
British bank HSBC Holdings Plc admitted failings by its Swiss subsidiary in response to media reports it helped wealthy customers dodge taxes and conceal millions of dollars of assets.
It also listed arms dealers, people linked to former dictators and traffickers in blood diamonds, and several individuals on the current U.S. sanctions list…
http://www.huffingtonpost.com/2015/02/09/hsbc-admission-swiss-banks_n_6646300.html
he Hong Kong and Shanghai Banking Corporation was founded by Scotsman Sir Thomas Sutherland in the then British colony of Hong Kong on 3 March 1865, and in Shanghai a month later, benefiting from the start of trading into China, including opium trading.
http://en.wikipedia.org/wiki/HSBC
HSBC: Too Big To Jail/Gangster Banksters
http://www.rollingstone.com/politics/news/gangster-bankers-too-big-to-jail-20130214
In the seminal study by John Hoefle coming out of the Executive Intelligence Research, HSBC: Flagship Bank Of Britain’s Dope, Inc., the historic composition of dishonest business dealings that transcend even shady banking is documented.
“It should come as no surprise that British banking giant HSBC was caught laundering money for drug cartels and terrorist groups. HSBC, as we shall show, is the kingpin bank of the global drug trade, a bank which, since its founding in 1865, has been devoted to financing drug crops and laundering the proceeds. HSBC is, in fact, one of the key controlling institutions of the global illicit drug cartel we call Dope, Inc.
If you think that is an outlandish claim, consider the fact that EIR, through its book Dope, Inc., and in its affilicated War on Drugs magazine, published in the early 1980s by the National Anti-Drug Coalition, have made this charge for over 30 years, and have never been sued or challenged by the bank.”
http://beforeitsnews.com/alternative/2015/02/hsbcs-long-history-of-money-laundering-3110192.html
great additional info…for the newbees……………….
House of Windsor and Rothschild involvement with HSBC and the opium trade:
http://www.zerohedge.com/news/2015-02-16/hsbc-bank-secret-origins-laundering-worlds-drug-money
thanks for posting…….Of course this is a good tie in for what is now happening to the manipulation of Gold and silver……………and has been happening ……..and now we see the Manipulators are now exiting the scene.
HSBC is closing all 7 of its vaults in London. Remember these guys are the custodians to the GLD. Are they closing because the gold is not there? If it is there, to whom are they transferring the gold to? This is a very profitable business for HSBC, so why are they closing all physical vaults?
The registered vaults at the GLD will eventually become a crime scene as real physical gold departs for eastern shores leaving behind paper obligations to the remaining shareholders. There is no doubt in my mind that GLD has nowhere near the gold that say they have and this will eventually lead to the default at the LBMA and then onto the comex in a heartbeat (same banks).
THIS IS WHAT WE WERE SCREAMING ABOUT……………
I can only find one analyst following Gold Canyon, but he loves it:
Gold Canyon Resources Inc.
$ 0.18 -0.015 (-7.69%) Volume: 1.25m 3:12 PM EST Mar 6, 2015
Current Target Price
High Target Price Estimate 1.09
Low Target Price Estimate 1.09
Mean Target Price Estimate 1.09
Standard Deviation 0.00
Date of Most Recent Estimate 03/02/15
Target Price History
Current 1 Week Ago 2 Weeks Ago 3 Weeks Ago
Target Price Estimate 1.09 1.07 1.04
Date of Most Recent Estimate 03/02/15 02/23/15 02/09/15