Coral Gold (TSXV: CLH) closed yesterday up to a new 7 1/2 year high of $0.455 per share and looking at its long-term chart, CLH is a coiled up spring that appears ready to explode! There is absolutely no resistance in sight with CLH closing yesterday above its long-term key breakout point! With only 47.7 million shares outstanding, CLH has a current market cap of only CAD$21.7 million and the company has CAD$18.21 million in cash with NO debt! This means CLH's enterprise value at $0.455 per share is only CAD$3.49 million!
CLH was originally founded in 1982 by Louis Wolfin who also founded Avino Silver & Gold Mines (TSX: ASM), which successfully operated the Avino mine in Mexico for 27 straight years from 1974 through 2001 producing 16 million oz of silver, 24 million lbs of copper, and 96,000 oz of gold. His son David Wolfin later became CEO of both companies. In October 2013, despite declining metals prices, Wolfin successfully brought ASM's Avino mine back into production! Initially, its enterprise value in October 2013 was only CAD$25.33 million, but by July 2016 it reached a peak of $174.52 million for an increase of 589% in only 33 months!
Louis Wolfin was always keen to follow the latest new developments in technology and in the early 1980s, he became attracted to heap leaching technology, believing it could one day allow low grade gold mines with less than 1 gram of gold per ton to become profitable! In 1986, Coral Gold hired famed geologist Dr. Ralph Roberts, who had 40 years experience with the USGS and discovered the Carlin and Cortez-Battle Mountain gold belts the two most important gold discoveries in U.S. history! He toured the Robertson project and encouraged Wolfin to acquire the ground immediately! Click here to read about Dr. Ralph Roberts on Wikipedia!
Dr. Roberts became CLH’s head geological consultant and also helped CLH acquire extensive ground surrounding the Robertson Project plus other nearby properties like JDN, Norma Sass, and Eagle.
CLH is guaranteed to AT LEAST receive a minimum of USD$5 million or CAD$6.633 million from its sliding scale NSR royalty in the Robertson Project! This will add $0.14 per share in cash to CLH's current cash position of $0.382 per share, therefore, NIA sees almost no downside risk below $0.522 per share!
In our opinion, CLH could easily sell its royalty for USD$10 million or more immediately if it wanted to! In the event that CLH decided to sell its royalty to a third-party, Barrick Gold has the right to match the sale price to acquire the NSR royalty for itself! However, we believe the true value of CLH's royalty right now to be USD$20-$30 million! To reach an enterprise value of USD$20-$30 million or CAD$26.51-$39.77 million, CLH will need to rise to $0.94-$1.22 per share!
No matter what, its guaranteed to be worth FAR MORE than CLH's current enterprise value at $0.455 per share of only $3.49 MILLION!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. Never make investment decisions based on anything NIA says. This message is meant for informational and educational purposes only and does not provide investment advice.
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