CORONET METALS INC COM NPV (OTCMKTS:CORMF) is an exciting name in the junior gold miners space that’s clearly begun to spur some interest among players in the marketplace as shares continue to show relative strength. The stock is up over 1500% from its lows of last year, but has undergone a nice period of consolidation over recent months, presenting us with a good opportunity for a fresh look.
The gold space is particularly interesting right now given the recent burst higher in interest rates and some of the recent data we have seen from a macro perspective. In particular, investors must understand that market participants are looking ahead at a world that includes both of the concepts, “full employment” and “fiscal stimulus”. That’s a combustible combination, from an inflation standpoint. Hence, the gold space – and in particular, junior miners like CORMF, IAMGOLD Corp (USA) (NYSE:IAG), KIRKLAND LAKE GOLD COM NPV (OTCMKTS:NMKTF), and Alamos Gold Inc (US)(NYSE:AGI) – should expect increasing money flows as that picture evolves.
CORONET METALS INC COM NPV (OTCMKTS:CORMF) acquires, explores for, and develops natural resources properties primarily in the United States. Through its wholly-owned subsidiary, “White Caps Mining Company” (“WCMC”), the Company controls the former producing White Caps Gold Mine and processing mill, along with an estimated 250,000 tons of historic tails and mine dumps * (“The White Caps Gold Project”).
The White Caps Gold Project is located in the historic Manhattan mining district of south-central Nevada, which consists of ~2,800 acres & 121 patented and unpatented mining and mill site claims, only 13 miles south of Kinross’ multi-million ounce Round Mountain Gold Mine. The Manhattan mining district is considered one of the more underexplored areas in Nevada.
According to company materials, “Coronet Metals Inc. is engaged in the business of acquiring, exploring and developing natural resource properties, with a focus on precious mineral properties/projects which have the potential for both near-term cash flow and significant exploration upside potential. Coronet’s White Caps Gold Project is near the town of Manhattan in Northern Nye County. The Project is well in line with its strategy of consolidating the Manhattan mining district, developing the tailings & dumps and to create significant exploration upside.”
Currently trading at a market capitalization of $5M, CORMF has a chunk ($320K) of cash on the books, which compares with virtually no total current liabilities. The company is pre-revenue at this point, but moving quickly toward monetization, which potentially represents a sweet spot for investors.
Next Steps
The next steps here are interesting where that potential sweet spot is concerned based on recent rhetoric out company officials. According to the company’s latest release, “With the encouraging initial metallurgical results and with confirming the tonnage of the tailings and dumps under way, the Company is well positioned to enter into commercial production in the near-term.”
Time to market is probably the key variable for this type of asset, and some sort of evolution toward top line growth is likely not too far off in this case.
That works as a coming catalyst, along with the company’s plans to verify historical estimates of the White Caps resource. Plans are currently underway to achieve that result, and recent estimates present an encouraging picture as to how that catalyst may impact the market for CORMF shares.
The Market
According to our research, market participants may want to pay attention to this stock. CORMF has a track record that includes a number of dramatic moves. In addition, the stock has seen an influx in interest of late, with the stock’s recent average trading volume running 910% above the average volume levels in play in this stock over the longer term.
Traders should note this as important with the stock trading on a float that is tight at just 12.6M shares. One is wise to respect the dynamic this may create — with such a tight trading float, this kind of ramping interest can force a supply-shock squeeze.
As the gold space heats up, this type of dynamic may accelerate the action here.
