Joshua Gold Resources Inc. (OTC: JSHG) is currently on a bull run after the company presented its new Chief Geologist, Fred Sharpley. Besides, the recent gold price spike and Joshua’s preliminary exploration work on its gold properties in Northern Ontario explain the market move. We are talking about triple-digit stock returns since September 2019.
Volume And Price Analysis
Since the company commenced trading in August 2019, the stock volume increased to more than 0.6 million shares exchanged in only one session. The company was not able to move even 0.1 million shares a few weeks ago. Thus, it appears quite obvious that the stock demand is creeping up fueled by the recent news.
After bottoming in September at $0.1 mark, the stock price increased to cross the $0.2 mark. The market move represented more than 100% stock returns. But, that’s not all. In October, the price spiked up from the level of $0.2 to hit initially the $0.30 mark, and finally almost $0.4 mark. As of October 22, 2019, the shares are being sold at $0.3 after a small decline in market volume. With this impressive price reaction, the market should be expecting additional news from Joshua Gold:
Business Model And Properties
Headquartered in Canada, Joshua Gold explores properties that are contiguous to other gold-producing mines. The business strategy appears smart. Finding gold-bearing geological structures close to existing mines is likely.
The latest acquisitions of claims were announced in 2017. On March 28, 2017, the company acquired 100% interest in 33 claims (1,320 acres) in Rollo Township, Northern Ontario, Canada. The property is located close to an existing gold project:
“The proximity of the C1 Mortimer trench gold occurrence, as well as the Kenty gold deposit a few hundred meters to the south, in conjunction with the existence of favorable rock type units are arguments in support of extending the Company’s gold exploration interest on the newly acquired claims.” Source: Press Release
As of March 7, 2017, the company also reported the acquisition of three claims (120 acres) in Asquith Township, Northern Ontario, Canada. The agreement included one hundred thousand shares of common stock, which the market may not appreciate, and a two percent Net Smelter Royalty. With that, the contract also included an option to acquire up to 50% of the two percent royalty for $1 million. It is very valuable information. If the mineral exploration stage is positive, the option could be worth a significant amount of money.
New Market Expectations
In August 2019, the company announced the appointment of Fred Sharpley, which the market appreciated quite a bit. There are two reasons to like the business executive. Firstly, he brings over 57 years of expertise in the exploration business as a mine geologist for the Keevil Mining Group as well as Temagami Mining Company Ltd. Besides, the market will most likely appreciate that he has been exploring gold opportunities for companies like Opawica Explorations Inc., Detour Gold Corp., and Sabina among others.
In addition, Mr. Sharpley is expected to continue the JV exploration on the C-1 Property in Northern Ontario. Fred Sharpley seems to be preparing preliminary exploration work on its properties located in the Shiningtree area of Northern Ontario.
Many things appear to be changing. It seems pretty obvious that the recent announcement increased the market optimism. If Joshua Gold continues to release positive press releases, we don’t see why the share price would not creep up.
Currently trading with a market capitalization of $35 million, total liabilities of $0.9 million and negative book value, Joshua Gold has significant room for improvement, particularly in its financial figures. With that, the company reports financials similar to that of other exploration stage mining companies. If Joshua Gold has sufficient liquidity to develop its exploration activities, the state of the balance sheet may not matter that much.
Let’s keep an eye on this name, as the management may surprise us once again soon!
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Disclosure: We hold no position in Joshua Gold either long or short, and we have not been compensated for this article.