Central Iron Ore Limited (CIO.V) rose an incredible 725% on Wednesday but we think it is well deserved after it announced a massive, near-surface gold discovery. Despite the move up, it has just a $12 million market cap and 72 million shares outstanding, comparing very favorably to other companies with similar large gold discoveries. Based on the strong close, we think it could spike over $0.20 on Thursday and might be worth buying high for the chance to sell even higher. Given the nature of the discovery and hotness of the junior gold sector, we think that CIO could go on a run similar to Freegold Ventures Limited (FVL.V) which has risen rom $0.05 to $0.56 in a couple of months and currently has a $132 million market cap.
We have been riding a win streak on the Canadian market recently with two of our last three picks doing extremely well. On May 19, we issued an alert on EastWest Bioscience Inc. (HBOSF) (EAST.V) when it was trading at $0.03 in a report titled "Canadian COVID Stocks Set To Double". On May 22, we issued an alert on Eyecarrot Innovations Corp. (EYCCF) (EYC.V) at $0.235. Both of those stocks doubled in the days that followed. We are up to 894 followers on our ValueTrades blog despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can also follow this blog by clicking the follow button on the top of the left hand panel. We have 28 followers so far on here. You can follow us on Twitter @StockTradePicks which has over 4,400 followers.
CIO's discovery was on its Endeavour Prospect at its South Darlot Gold Project in Western Australia. It was highlighted by a 1.6 meter length 124.4 gram per tonne discovery but it had six major hits:
FVL makes an interesting comparison as a recent large runner. FVL had very lengthy grades starting approximately 300 meters underground. While CIO does not have the length of FVL, it has very high grades that start basically from the surface and peak at around 30-40 meters in depth. That makes it much cheaper and easier to mine. 12 of the 20 holes encountered some material amount of gold or silver:
These are the reasons why we believe that there will be a spike well over $0.20 on Thursday:
1. Finds of this magnitude tend to create multi-day runners. FVL is just one example of this.
2. The strong buying and closing just under the high of the day is a signal of a continued run.
3. This was a mid-day press release. There is a good chance that many news and swing traders missed out on CIO when checking their screeners in the morning. They will have their eyes on this on Thursday morning.
4. At $12 million market cap, the stock is cheap for a discovery like this.
5. The company had over $1 million in cash (AUD) at March 31, 2020. So it's not starved for cash and doesn't need to announce a capital raise right away. But at some point in time the company may try to raise money. However, a capital raise did not stop FVL from going on a major run post-discovery. A capital raise could actually prove to be a positive catalyst if prolific gold investor Eric Sprott gets involved. He has been very active in participating in financings for explorers recently.
Disclosure: We are long CIO.V
What's next for microcap stocks? TradeMiner identifies seasonal trends and market cycles, the Penny Stock Prophet and Microcap Millionaires finds the next big small cap plays in various industries while Addicted to Profits makes trades from a Canadian perspective.
There are also some good books available on microcap stocks and day trading such as:
Mastering Microcaps: Strategies, Trends, and Stock Selection (Bloomberg Professional Library)
The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks
Microcap Magic: Why The Biggest Returns Are In Stocks You've Never Heard Of
How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology
A Beginner's Guide to Day Trading Online (2nd edition)
Stock Investing for Beginners: Marijuana Stocks
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
We have been riding a win streak on the Canadian market recently with two of our last three picks doing extremely well. On May 19, we issued an alert on EastWest Bioscience Inc. (HBOSF) (EAST.V) when it was trading at $0.03 in a report titled "Canadian COVID Stocks Set To Double". On May 22, we issued an alert on Eyecarrot Innovations Corp. (EYCCF) (EYC.V) at $0.235. Both of those stocks doubled in the days that followed. We are up to 894 followers on our ValueTrades blog despite not giving out a lot of alerts, a fact that we think is indicative of a successful, diligent and prudent stock picking history. If you like our picks you can also follow this blog by clicking the follow button on the top of the left hand panel. We have 28 followers so far on here. You can follow us on Twitter @StockTradePicks which has over 4,400 followers.
CIO's discovery was on its Endeavour Prospect at its South Darlot Gold Project in Western Australia. It was highlighted by a 1.6 meter length 124.4 gram per tonne discovery but it had six major hits:
Highlights
Significant gold intercepts
- ENDD20-002: 1.6m (1.28m true width) at 124.4 g/t Au from 37.3m.
- ENRC20-009: 2m (1.6m true width) at 88.08 g/t Au from 27m.
- ENRC20-010: 2m (1.6m true width) at 77 g/t Au from 37m.
- ENRC20-011: 2m (1.6m true width) at 74.5 g/t Au from 42m.
- ENDD20-003: 1.6m (1.28m true width) at 38.2 g/t Au from 53.2m.
- ENRC20-013: 2m (1.6m true width) at 36.4 g/t Au from 47m.
Endeavour Prospect
- 17 reverse circulation drill holes for 706 metres.
- 3 diamond core drill holes for 141.8 metres.
Summary of Drill Results
| Hole_ID | mE | mN | mRL | Dip | Azimith | Depth_from | Depth_to | interval | True_thickness | Au_ppm | Ag_ppm |
| ENRC20_001 | 328143.26 | 6905847.658 | 441.162 | -60 | 0 | NSI | |||||
| ENRC20_002 | 328133.183 | 6905848.257 | 441.006 | -60 | 0 | 2 | 7 | 5 | 4 | 6.75 | 2.3 |
| ENRC20_003 | 328123.276 | 6905852.508 | 432.913 | -60 | 0 | NSI | |||||
| ENRC20_004 | 328114.491 | 6905853.894 | 428.944 | -60 | 0 | NSI | |||||
| ENRC20_005 | 328143.78 | 6905840.721 | 434.461 | -60 | 0 | NSI | |||||
| ENRC20_006 | 328133.251 | 6905843.034 | 430.167 | -60 | 0 | 17 | 20 | 3 | 2.4 | 7.04 | 15.8 |
| ENRC20_007 | 328123.384 | 6905845.98 | 423.79 | -60 | 0 | NSI | |||||
| ENRC20_008 | 328114.321 | 6905849.007 | 417.482 | -60 | 0 | 33 | 34 | 1 | 0.8 | 7.91 | 6.3 |
| ENRC20_009 | 328139.078 | 6905835.564 | 422.036 | -60 | 0 | 27 | 29 | 2 | 1.6 | 88.08 | 24.7 |
| ENRC20_010 | 328119.501 | 6905841.524 | 413.667 | -60 | 0 | 37 | 39 | 2 | 1.6 | 77 | 47.0 |
| ENRC20_011 | 328110.819 | 6905843.56 | 409.317 | -60 | 0 | 42 | 44 | 2 | 1.6 | 74.5 | 45.1 |
| ENRC20_012 | 328113.474 | 6905836.077 | 403.064 | -60 | 0 | 50 | 51 | 1 | 0.8 | 9.68 | 4.6 |
| ENRC20_013 | 328124.142 | 6905830.904 | 404.049 | -60 | 0 | 47 | 52 | 5 | 4 | 36.4 | 19.2 |
| ENRC20_014 | 328140.339 | 6905825.698 | 411.09 | -60 | 0 | 40 | 42 | 2 | 1.6 | 16.63 | 33.3 |
| ENRC20_015 | 328148.56 | 6905822.635 | 412.439 | -60 | 0 | NSI | |||||
| ENRC20_016 | 328104.695 | 6905854.041 | 429.059 | -60 | 0 | NSI | |||||
| ENRC20_017 | 328104.091 | 6905851.303 | 414.553 | -60 | 0 | 36 | 37 | 1 | 0.8 | 9.42 | 5.29 |
| END20_001 | 328125.667 | 6905849.545 | 433.135 | -60 | 0 | NSI | |||||
| END20_002 | 328131.74 | 6905834.019 | 413.255 | -60 | 0 | 37.3 | 38.9 | 1.6 | 1.28 | 124.4 | 146.7 |
| END20_003 | 328141.274 | 6905817.239 | 399.368 | -60 | 0 | 53.2 | 54.8 | 1.6 | 1.28 | 38.2 | 38 |
1. Finds of this magnitude tend to create multi-day runners. FVL is just one example of this.
2. The strong buying and closing just under the high of the day is a signal of a continued run.
3. This was a mid-day press release. There is a good chance that many news and swing traders missed out on CIO when checking their screeners in the morning. They will have their eyes on this on Thursday morning.
4. At $12 million market cap, the stock is cheap for a discovery like this.
5. The company had over $1 million in cash (AUD) at March 31, 2020. So it's not starved for cash and doesn't need to announce a capital raise right away. But at some point in time the company may try to raise money. However, a capital raise did not stop FVL from going on a major run post-discovery. A capital raise could actually prove to be a positive catalyst if prolific gold investor Eric Sprott gets involved. He has been very active in participating in financings for explorers recently.
Disclosure: We are long CIO.V
What's next for microcap stocks? TradeMiner identifies seasonal trends and market cycles, the Penny Stock Prophet and Microcap Millionaires finds the next big small cap plays in various industries while Addicted to Profits makes trades from a Canadian perspective.
There are also some good books available on microcap stocks and day trading such as:
Mastering Microcaps: Strategies, Trends, and Stock Selection (Bloomberg Professional Library)
The Little Black Book of Microcap Investing: Beat the Market with NASDAQ/AMEX Microcap Stocks, OTCBB Penny Stocks, and Pink Sheet Stocks
Microcap Magic: Why The Biggest Returns Are In Stocks You've Never Heard Of
How to Day Trade for a Living: A Beginner’s Guide to Trading Tools and Tactics, Money Management, Discipline and Trading Psychology
How to Day Trade: A Detailed Guide to Day Trading Strategies, Risk Management, and Trader Psychology
A Beginner's Guide to Day Trading Online (2nd edition)
Stock Investing for Beginners: Marijuana Stocks
Here are some other good stock market resources. This includes technical analysis and day trading, dividend stock investing, gold and commodities, sector rotation, options trading and microcap trading strategies:
The dividend stock report from dividendstocksonline.com
The dividend stock report from Dividend Stocks Rock
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
Goldmasterinvesting.com Ocean Of Gold Report for the top 15 gold mining companies
Trader Review
The Trader's Academy Club
The Wealth Builder's Club from beatthemarketanalyzer.com
MyBB: A Forum For Investors and Traders
Spartan Trader Forex Academy Live Daily Trading Room
And try the Z Code System if you're looking for other ways to make money systematically outside of the stock market.
For those who are interested in trading bitcoin and other cryptocurrencies, here are some links to valuable reports and strategies:
