Joel’s Resource Report – a multibagger in the making? #CGNR
At the time of writing, the author does not have a position in CGNR.
Hi all, I hope the markets have been treating you well. My portfolio took at all time highs last week – I’m now up over 80% year to date which I’m obviously rather happy about.
That being said, things can change in the blink of an eye, so I’m trying not to be complacent or count chickens before they’ve hatched.
The resource company I’ll cover today is one which I’d ordinarily view as a bit of a dog. it’s been listed for years, has been undercapitilized, living placing to placing, and management haven’t had the funds to do meaningful work programs. The company is Irish exploration company Conroy Gold And Natural Resources PLC. At 32 pence. Conroy’s market capitalization is £10 million:
It should be noted that around five years ago there was a share consolidation.
What does CGNR have?
“Conroy Gold’s primary focus in Ireland is the development of a gold mine on its Clontibret gold target and the continued exploration of the district scale, 65km (40 miles) gold trend, which the Company has discovered along a major geological structure, the Orlock Bridge Fault Zone, in the Longford – Down Massif, in northeast Ireland.”
Conroy has the following JORC Resource estimate on its Clontibret area:
PEA – results
At current gold prices, Conroy’s market cap looks woefully low versus NPV but it must be said that PEAs don’t have a high degree of certainty. The PEA would not be sufficient to fundraise, but it gives investors an idea of the type of upside available.
How Conroy can unlock their potential – Anglo Asian Mining JV
On 21st July, Conroy announced a proposed JV with Anglo Asian.
Anglo Asian are a gold mining company based in Azerbaijan that I covered earlier in the year for Cube.
The key heads of terms highlights are as follows:
- The Joint Venture goal is the development of a gold mine and further exploration and development along the district scale gold trend which the Company has discovered in Ireland.
- Anglo Asian Mining to acquire an initial 17.5% working interest in the Joint Venture for committing to spend €2 million on a primary expenditure programme.
- Option to increase working interest to 25% by spending a further €2 million to complete the Primary Expenditure Programme of a minimum of €4 million.
- Further option to acquire a total 55% working interest in exchange for committing to meet the expenditures of the Secondary Expenditure Programme in order to advance the Clontibret Gold Deposit to mine construction ready status and certain further exploration expenditures.
In essence, Anglo can earn 25% of Conroy’s projects by spending €4 million on exploration drilling. This compares favorably to Conroy’s £10 million market cap (€11 million). Assuming drill success, Anglo might very well look to take their interest up to 55%, by further advancing the project.
Like any junior, cash is usually tight. Thankfully, Conroy just raised £800,000 which should see them cashed up for some time.
There are a number of catalysts that I believe could start to rerate Conroy’s share price in the near term (next three to six months):
- Signing of the JV
- Announcement of exploration drilling program
- Confirmation that gold mineralization extends down below 300m
- Positive drill results
Professor Conroy, Chairman of the company was recently interviewed here:
#CGNR #Gold #AAZ
𝗥𝗶𝗰𝗵𝗮𝗿𝗱 𝗖𝗼𝗻𝗿𝗼𝘆 𝗜𝗻𝘁𝗲𝗿𝘃𝗶𝗲𝘄
▪️ @ConroyGoldplc Chairman Richard Conroy recently spoke to the @StockBoxMedia team about the joint venture agreement with Anglo Asian Mining and the progress at Longford-Downhttps://t.co/JCGFLeSwTS
— Conroy Gold and Natural Resources (@ConroyGoldplc) September 21, 2020
Conroy Gold is early in its journey towards gold production, but Anglo’s involvement is a real endorsement of its projects. The additional funding and accelerated development should provide plenty of excitement of shareholders. Depending very much on success with the drill bit, the market cap could grow – it’ll certainly be interesting to track the company’s progress.
Till next week!