The markets have been horrible over the past few weeks and two of our favorite companies have fallen back to all-time lows.
CuOro Resources Corp. (TSX-V:CUA), a Colombian copper explorer is currently trading at C$0.80, barely above their 52 wk lows. It’s been a while since we’ve had a drilling update from them, but we are anticipating to see results soon as the company is currently completing a 25,000m drill program with 4 drill rigs on their Santa Elena VMS-project. As the company has a cash position of approximately C$15M, their Enterprise Value is currently only C$9M. This appears to be way too low for this company, given that we anticipate further drilling successes, and expect an NI43-compliant resource estimate of in excess of 1.5B lbs copper next year. Based on a conservative valuation of 3 cents per pound of copper in-the ground, we feel CuOro should be valued at around C$1.50/share for a $45-50M market capitalization. We have been buying more shares in the open market to average down our position.
Tembo Gold Corp. (TSX-V:TEM) is trading at C$0.73 and has fallen approximately 65% from their 52wk high, only 3 months ago. Tembo currently has 8 drill rigs on their Tanzanian Tembo Project in the Lake Victoria goldfield in Tanzania, and we expect new drill results here as well. The first results, which were released in March were very encouraging, and we are confidently looking forward to the next batch of drill results. The company currently has C$11M in cash, and thus has an Enterprise Value of approximately C$18M, which is relatively cheap, considering we firmly believe Tembo owns the next multi-million ounce discovery in Tanzania.
Disclosure: Over the past 12 months, we acted as a placement agent for Tembo Gold, and were compensated for our services. We also visited the Tembo project in February, and all of our costs have been reimbursed by the company. Please see our disclaimer for current positions.
