With the CDNX having jumped a whopping 41% in three months, it’s not easy finding a company active in the Gold exploration business, generating regular monthly cash flow, and trading at cash value. Which is why it’s so important to listen to BMR’s 11-minute interview (below) with Greencastle Resources’ (VGN, TSX-V) President and CEO Tony Roodenburg. Something very important has changed with Greencastle in the last couple of weeks that investors haven’t fully grasped the significance of yet.
Roodenburg has confirmed with BMR that after a few years of inactivity in the Gold sector, Greencastle is about to make some noise. Two weeks ago the company announced it had acquired an option to purchase a 100% interest in a property covering 13,000 hectares (28 claims) in the Nechako Plateau region of British Columbia, on trend with Richfield Ventures’ (RVC, TSX-V) potential multi-million ounce Blackwater Project that we have written about extensively at BMR over the past 10 months. In and of itself, Greencastle’s property agreement was important but nothing to get overwhelmingly excited about. What is worth getting excited about is that this announcement represented a change in direction for the company, a return to being an active player in the Gold exploration space after just watching from the sidelines the last few years.
To demonstrate its seriousness, Greencastle has already completed a detailed heliborne magnetic and electromagnetic geophysical survey over its newly-acquired property near Blackwater within just two weeks after announcing the deal.
In Nevada, Greencastle is sitting on two very promising Gold properties strategically located on the Battle Mountain Trend – Indian Creek and Jewel Ridge – that the company now appears determined to unlock the value of as Roodenburg suggested in our interview. Greencastle’s most recent MD & A stated, “The Company is actively seeking other projects to create shareholder value.” Indeed that’s the case as Roodenburg indicated Greencastle is currently looking at acquiring a fourth Gold property, “likely in the Americas”.
What all this means, we believe, is that Roodenburg has decided to “seize the moment” and is positioning Greencastle to reap the maximum benefit from higher Gold prices and a robust market for junior Gold stocks.
At just 14 cents per share, today’s closing price for Greencastle and its average closing price for the last 5 trading sessions, the company’s market capitalization is $6.3 million which essentially matches its current working capital. No value is therefore being attributed to Greencastle’s Gold assets and that means opportunity from an investor’s point view of view. An oil royalty that was valued at $5.2 million by an independent engineering firm a year ago brings Greencastle at least $125,000 per month in revenue.
Technically, the stock is showing signs it’s ready to move higher. The 100-day moving average reversed to the upside this month after being in decline since March, and the 50-day SMA has now just slightly crossed over the 200-day SMA which is the infamous “golden cross”.
There is a new golden opportunity in our view with Greencastle Resources. For investors who like to keep risk to a minimum but still enjoy significant capital appreciation potential (this writer being one of them who also holds 75,000 VGN shares), now is the time to be taking a serious look at this company.
To listen to our interview with Roodenburg, please click on the link below (in Part 2 of our interview, to be uploaded sometime Thursday, Roodenburg discusses his other company, Seafield Resources):
Thanks for doing these audio interviews. I think they are a great way to supplement your writings and to hear direct from the CEOs. While I know you can not interview everyone, it would be great to see if you can arrange an interview with several of the Rare Earth Companies you mentioned or other rare earth junior companies in the sector such as Rare Earth Metals, Stans Energy, Ucore, Bolero Resources, Matamec Explorations, Medallion Resources, etc.
Comment by Michael — October 28, 2010 @ 2:33 pm
I was looking for this certain info for a very long time. Thank you and good luck.
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