Given our very bullish scenario for gold and the Venture Exchange heading into January, we see tremendous potential for upstart Colombian Mines Corporation (CMJ-TSX-V) which is trading this morning between 55 and 58 cents. We first started looking at this stock a couple of months ago and we wish we had written it up sooner as it has been a strong performer. However, it appears to us that it could have much further to go, that it’s in the beginning stages of a potentially massive move.
Colombian Mines was incorporated in 2006 and merged with Corporacion Minera de Colombia S.A. in September, 2006. It began trading on the Venture Exchange early last year and plummeted from over a dollar per share to a ridiculous three-and-a-half cents due to the market crash.
Since 2006 this company has quietly assembled a high quality portfolio of Colombian properties, often through the lengthy application process. Their current portfolio includes contracts, licences and applications covering approximately 222,000 hectares of massive sulphide, porphyry gold-copper, precious metal vein, coal and phosphate properties. In the Marmato mining district, Colombian Mines will soon be drilling its Yarumalito property which hosts both porphyry and epithermal gold targets. Just recently, the company was awarded 3,000 hectares in northern Colombia (Rio Negro area) which may be on trend with exploration and development properties controlled by Greystar, Ventana and Galway.
This is a tightly-held stock with only 18,500,000 shares outstanding giving it a current market capitalization of only about $10 million. Its current cash position is adequate, a little more than $1 million, with one million stock options at $1.00 and 950,000 warrants at $1.20 (expiring in May, 2010). With a substantial portfolio of properties in a red-hot country for exploration right now, Colombian Mines has been approached with several interesting joint venture opportunities. Management is solid with extensive experience in Colombia.
Technically, this stock has strong support at the 50 cent level and all of its moving averages are in bullish alignment. While it has performed well recently, it is certainly not overbought at current levels based on stochastics and RSI which give fairly neutral readings at the moment. The tight share structure means CMJ has the potential to move very quickly, and we believe the next big move will be up.
We’ll be keeping a close eye on Colombian Mines in the coming weeks, and we suggest investors do their due diligence and look at this one very closely. Along with Seafield, Colombian Mines in our view is clearly an up-and-comer and should be a star performer in 2010.
