The best trading/investing setups occur when the fundamentals and technicals align closely and the potential reward far outweighs the risk. The current situation in OK2 Minerals (TSX-V:OK) is a textbook example of such a situation.
OK shares have drifted lower on relatively light volume along with the junior mining sector during the last few months, however, a double-bottom has been potentially put in place and there are some early signs of accumulation taking place just as the company embarks on expansive exploration programs at its projects (Kinskuch and Pyramid) in British Columbia’s prolific Golden Triangle:
Bullish MACD cross over as buying volume begins to pour in – double-bottom at C$.09 with next resistance up at C$.13 then C$.16.
OK2’s flagship project is the highly prospective Pyramid Property in BC’s Golden Triangle – the company is committed to conducting a 3,500 meter reverse circulation (RC) drill program at Pyramid this summer. Yesterday OK announced that it has secured drill contractors for its first ever regional drilling program at Pyramid and drill crews are expected to mobilize to the site by the end of May.
The results from this upcoming RC program will be used to target deeper diamond core holes which are to be drilled later in the summer; an initial diamond core program of up to 2,000 meters will commence in early-August.
The beauty of this project is that it has never been drilled, any discovery would be greatly rewarded.
And don’t take this fact lightly, Pyramid has seen zero exploration work done at Pyramid prior to 2013 even though the property is in such a prolific mining district (not far from Eskay Creek, Red Chris, Brucejack, etc.) with exceptional road access, and that is very hard to find in a jurisdiction in the likes of BC’s Northern Triangle.
For example, Zone 37, discovered in the 2016 exploration program, is only 4 Km’s from the highway and had a surface rock sample 82 g/t gold. The East Zone, 6.5km’s from the highway surface rock grab sample 1.5% copper and 3.5 grams per tonne gold.
If you are an investor, looking for the blue sky of a Brucejack, Red Chris or Kemess style discovery, (obviously two different types of deposit) this is where you look. And you have a hell of a management team betting on it with you.
OK2 has identified several high priority targets at Pyramid which will be tested early in the 2017 exploration program.
The situation from an investment standpoint is straightforward:
Invest alongside an all-star management team with a proven track record (CEO Mike Devji, President & COO Jim Currie, VP Exploration George Cavey, Board member Blair Schultz etc.) – simply put it doesn’t get any better than the management team and board which OK2 has assembled to lead this early stage explorer with a modest C$8 million market cap.
Management owns well north of 10% of OK shares and insiders have been active buyers of OK shares including aggressively participating in the company’s latest C$1.84 million private placement at C$.125.
OK shares are at a relatively cheap valuation just as the company is ramping up a substantial summer exploration program at its two Golden Triangle projects.
Investors have the opportunity to jump aboard a promising copper/gold porphyry exploration play below share price levels at which company management and insiders have recently invested hundreds of thousands of dollars. It’s hard to beat the current setup in OK from a risk/reward vantage point given the recent double-bottom (less than 20% below yesterday’s closing level), the strong insider buying and ownership, and the relatively small market cap which means that even modest exploration success could easily result in a double or triple in the company’s share price.
The article is for informational purposes only and is neither a solicitation for the purchase of securities nor an offer of securities. Readers of the article are expressly cautioned to seek the advice of a registered investment advisor and other professional advisors, as applicable, regarding the appropriateness of investing in any securities or any investment strategies, including those discussed above. Ok2 Minerals is a high-risk venture stock and not suitable for most investors. Consult OK2 Minerals’ SEDAR profile for important risk disclosures.
EnergyandGold has been compensated to cover Ok2 Minerals and so some information may be biased. EnergyandGold.com, EnergyandGold Publishing LTD, its writers and principals are not registered investment advisors and advice you to do your own due diligence with a licensed investment advisor prior to making any investment decisions.
This article contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation (collectively “forward-looking statements”). Certain information contained herein constitutes “forward-looking information” under Canadian securities legislation. Generally, forward-looking information can be identified by the use of forward-looking terminology such as “expects”, “believes”, “aims to”, “plans to” or “intends to” or variations of such words and phrases or statements that certain actions, events or results “will” occur. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed by such forward-looking statements or forward-looking information, standard transaction risks; impact of the transaction on the parties; and risks relating to financings; regulatory approvals; foreign country operations and volatile share prices. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements or forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Actual results may differ materially from those currently anticipated in such statements. The views expressed in this publication and on the EnergyandGold website do not necessarily reflect the views of Energy and Gold Publishing LTD, publisher of EnergyandGold.com. Accordingly, readers should not place undue reliance on forward-looking statements and forward looking information. The Company does not undertake to update any forward-looking statements or forward-looking information that are incorporated by reference herein, except as required by applicable securities laws. Always thoroughly do your own due diligence and talk to a licensed investment adviser prior to making any investment decisions. Junior resource companies can easily lose 100% of their value so read company profiles on www.SEDAR.com for important risk disclosures. It’s your money and your responsibility.