The small cap market has recovered a bit so far in 2023, but overall has still been a disaster for the last several months. Despite that, we have been on an incredible hot streak in Canada. Five for our last five, with three of those going up more than 100%:
1. In July we called GobiMin Inc. (GMNFF) (GMN.V) when it was $0.81. It recently had a take-private transaction at $1.84 and is now trading at $1.73 for a 114% gain.
2. In October we called Surge Battery Metals Inc. (NILI.V) (NILIF) when it was $0.10. Material findings of lithium on its property with expectations of more to come has resulted in a $0.26 stock price, a 160% gain with it going as high as $0.46.
3. In November we called Fission 3.0 Corp. (FUU.V) (FISOF) when it was $0.12 and reiterated our call at $0.29 in December. A massive uranium find has caused the stock to move up to $0.42, a 250% gain from our first call point.
4. On December 1, we called Equity Metals Corporation (EQTY.V)(EQMEF) at $0.11. It's $0.165 now for a 50% gain.
5. Finally, on December 6, we called Valeura Energy Inc. (VLE.TO) (PNWRF) at $1.45 after the company announced an extremely profitable offshore oil acquisition. It's $2.58 now for a 78% gain.
This doesn't include Simply Better Brands Corp. (SBBC.V)(PKANF), which we called on July 13 when it was trading at $0.265. It hit a high of $0.96 eight days later but then a poorly timed financing killed its momentum and it's back to where it started.
If you want winners, we have proven that we can find them. Even in a massive bear market for small caps. Our next pick is Dynasty Gold Corp. (DYG.V)(DGDCF). It ran 243% to $0.36 on Tuesday after announcing a bonanza gold discovery, but has since pulled back to $0.275. We think this is an ideal level to load up for a second run, which could be major based on these results and minuscule float. We are up to 1,012 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 113 followers so far on here. You can also follow us on Twitter @StockTradePicks which has over 5,000 followers.
From Tuesday's news release:
Vancouver, British Columbia--(Newsfile Corp. - January 10, 2023) - Dynasty Gold Corp. (TSXV: DYG) (FSE: D5G1) (OTC Pink: DGDCF) ("Dynasty" or the "Company") is pleased to release assay results from its Phase 1 2022 maiden drill campaign at the Thundercloud gold property located 47 kilometres southeast of Dryden, in northwestern Ontario. These are the best assay results ever reported from Thundercloud, and constitute new discovery of wide zones and high-grade gold-bearing quartz veins requiring further delineation.
Significant Assay Highlights:
- DP22-02 intercepted 1.31 g/t Au over 121 m from 102 m;
- Including 15.06 g/t Au over 9 m:
- Including 43.47 g/t Au over 3 m.
- DP22-03 intercepted 7.35 g/t Au over 51 m from 88.5 m, contains the longest intercepts with the highest gold grades to date;
- Including 13.01 g/t Au over 28.5m:
- Including 25.66 g/t Au over 12.5 m:
- Including 101 g/t Au over 3 m:
- Including 246 g/t Au over 1.5 m.
- DP22-04 intercepted 0.764 g/t Au over 40.5 meters from 120 m;
- Including 8.61 g/t Au over 3 m:
- Including 25.1 g/t Au over 1.5 m.
Assay Results:
| Hole ID | From (m) | To (m) | Interval (m) | Au (g/t) |
| DP22-01 | 9.0 25.5 30.0 | 25.5 30.0 252.0 | 15.5 4.5 222.0 | 0.104 0.269 0.0815 |
| DP22-02 Including Including Including | 0 77.0 83.0 102.0 189.0 189.0 190.5 | 77.0 83.0 102.0 223.50 214.5 198.0 193.5 | Not sampled 5.0 Not sampled 121.0 25.5 9.0 3.0 | 0.072 1.31 5.37 15.06 43.47 |
| DP22-03 Including Including Including Including And | 0 88.5 111.0 112.5 118.5 118.5 139.5 148.5 | 88.5 139.5 139.5 125.0 121.5 120.0 148.5 154.5 | Not sampled 51.0 28.5 12.5 3.0 1.5 Not sampled 6.0 | 7.35 13.01 25.66 101.1 246.0 1.90 |
| DP22-04 Including Including | 0 20.58 120.0 144.0 147.0 | 20.58 120 160.5 147.0 148.5 | Not sampled Negligible values 40.5 3.0 1.5 | 0.764 8.61 25.1 |
"We are thrilled with these outstanding results in our first drill program on the property. They are the highest gold grades, the longest and the widest intercepts ever drilled at the property. These drill results indicate a much bigger resource potential with higher grades at Thundercloud. The data will assist in building a structural model for a NI 43-101 resource update, and future drill target planning for resource expansion," states Ivy Chong, President and CEO.
These 4 near-surface shallow holes were drilled in the southeastern and south-central portions of the known Pelham area. The first hole was drilled on the eastern edge of a magnetic low that may represent a fault boundary, with no significant gold mineralization in it. Holes 2, 3, and 4 were drilled in untested areas of magnetic "highs" identified in the drone magnetic survey conducted in summer 2022. These three holes discovered a new area of very high-grade gold mineralization in quartz-veined mafic metavolcanics and overlying volcanic flow breccias ("conglomerates"). Quartz-veined rocks contained up to 246 g/t Au (7.91 ounces per ton) over a 1.5 m core length. The Company will sample the entire hole 3 in the coming months. The focus of the next drill program will be to outline the extent of this high grade mineralization in previously unexplored areas.
The host rocks at Thundercloud are metamorphosed mafic volcanic strata and local overlying flow breccias intruded by two phases of intrusive gabbros. Much of the low-grade gold mineralization found at Thundercloud is associated with a "cloud" of disseminated pyrite. Higher-grade gold mineralization is found locally with quartz veining and local sulfide enrichments. The Company regards this as a previously unexplored zone of high-grade gold mineralization worthy of further drilling. In addition, the property has several other mostly unexplored areas of high magnetization that could be explored in the future.
"Current assay results obtained by Dynasty Gold from the Thundercloud Property are particularly of interest in that the results clearly indicate that the Property has potential for both large-tonnage with high-grade and vein deposits. Although only four holes were completed, intercepts such as 121 m of 1.31 g/t Au and 101 g/t over 3 m are selected examples of each type with more present in the data set. Additional work obviously is required to establish economics but the nature of the indicators to date are encouraging," said Roman Shklanka, Director.
The Company thanks its dedicated team, contractors and the First Nations whose efforts have made this drill program a success. It also likes to acknowledge the contribution by the Ontario Junior Exploration Program ("OJEP") to the Company for the $60,000 grant towards furthering exploration on Thundercloud.
The highlights of the results are the 1.5 meters of 246 g/t in the third hole, 3 meters of 43 g/t in the second hole and 4.5 meters of 14 g/t in the fourth hole. There are 42 million shares outstanding (54 million fully diluted). So at $0.275, the market cap is a little over $13 million for these excellent results. We think a reasonably fair value on this find is somewhere between $0.50 to $1.00. Splitting the difference at $0.75, that's a $40 million market cap, fully diluted.
Part of the reason why the stock has pulled back the way it has after its major run was that there was an insider sell of 706,500 shares at $0.34 by Karim Mohamedani. This may have temporarily scared off momentum traders. Mohamedani appears to be a private investor who is merely taking his profits and doesn't have any managerial role that would imply access to privileged information. A much more important development is the insider buying from Roman Shklanka, purchasing 150,000 shares at $0.335. We point to the quote from Shklanka in the press release, noting that the findings presented are "selected examples of each type with more present in the data set". This implies that there are more results to come and his buying AFTER the massive run only furthers this point. We would like to point out that Shklanka is a highly respected name in the mining and exploration industry, having been inducted into the Canadian Mining Hall of Fame. So his purchase is extremely encouraging, much more so than Karim Mohamedani's sell is discouraging.
The wild card for DYG is its float. DYG has historically been an illiquid stock with a tight share structure. While we think $0.75 represents fair value, the supply-demand balance of shares has potential to send it much higher. This move is reminiscent of Go Metals Corp. (GOCO.CN) (GOCOF), which ran from $0.085 to $0.45 on the first day of its battery metals discovery news on September 13 and then proceeded to run all the way to $1.23 in the days that followed. Prior to Tuesday, DYG only traded 39,000 in volume on its TSXV listing in nine trading days, with six of those nine days having no volume at all. GOCO was similarly illiquid in the days leading up to its big move. GOCO has 24 million shares outstanding, so DYG's 42 million shares is in that ballpark in terms of small float. GOCO topped out at approximately a $30 million market cap and managed to raise money at that level on much less news than DYG's. It eventually tanked because follow up news has disappointed. DYG has already shown to have discovered material amounts of gold in this drill program. Also unlike DYG, GOCO didn't have an insider like Roman Shklanka buying "high" on the open market.
Disclosure: We are long DYG.V
