Continental Gold (CNL.TO) is rallying back above C$3.00 today as it tests a key resistance zone:
CNL.TO (Daily)
The support/resistance zone between C$3.00 and C$3.25 represents a crucial test for CNL. A breakout above C$3.25 would complete a 9-month rounding bottom pattern with a handle of a cup & handle pattern forming in the last couple of months. A breakout over $3.25 would target C$5.00+.
More importantly I would assert that a decisive breakout above C$3.25 would offer a strong indication that Continental’s flagship Buriticá project is well on its way through the permitting phase and closer to becoming a real mine.
Our C$5.00 technical price target in the event of a breakout above C$3.25 is interesting because the latest report from RBC on Continental offers a C$5.50 upside scenario target in the event that Continental successful moves forward with de-risking Buriticá via successfully permitting and financing the project through to commercial production:
The following slide from CNL’s latest corporate presentation illustrates that CNL is cheap relative to its peers and that there is significant upside revaluation potential in the event the company receives its environmental permits from the ANLA (national agency):
We will continue to monitor updates from CNL and look forward to hearing the results of additional exploration drilling at Buriticá and of course environmental permitting.
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