Market Turmoil Caused By COVID-19 Has Created A Unique Opportunity For Small-Cap Gold Stocks Right Now
A little while ago we took a survey of our subscribers to see what they wanted to see from us. One of the biggest things was more focused-content. In fact, over 90% of respondents said: “Give Me Something To Focus On.”
Every day on our site, we cover top penny stocks to watch but we haven’t done a focus article yet; something that can show potential for more than just a 1-day watchlist. Well, we heard you loud and clear.
Our first company in focus is:
IMC International Mining (CSE: IMCX) (OTC: IMIMF)
5 Reasons Why:
- The company has just completed a multi-million dollar acquisition of Thane Minerals & its Cathedral Property in Northern British Columbia.
- Mounting government debt and a global economic slowdown have made safe-haven stocks a huge priority for investors.
- Small-cap gold stocks offer some of the biggest returns over their larger competitors especially during times of gold rallies.
- The opportunities created during the gold boom of 2008-2012 saw investors making hundreds & even thousands of percentage gains.
- IMC International Mining (CSE: IMCX) (OTC: IMIMF) is in its discovery phase with a management team responsible for creating billions in market cap growth from their previous mining projects.
But this is just the tip of the iceberg as you’ll see. Before we dive in further, we need to get on the same page and explain not only why gold but why IMC International Mining (CSE: IMCX) (OTC: IMIMF) could be a mainstay on watch lists right now.
What Has Happened To The Market & Why?
Unless you’ve been living under a rock, you’ve heard of two big events:
- The coronavirus causing massive shutdowns and even mandated quarantines; and
- A Massive Market Meltdown
While there was already a general economic slowdown across the globe, this virus sent it over the edge. Now we’re seeing the blowback from it. This includes dropping oil prices, a 0% Federal Funds rate, trillions of dollars in economic stimulus packages, and central banks around the world scrambling to print money to use it as a safety net against a depression.
Maybe you’re thinking that gold dropped along with stocks. While this is true, the reasons why each dropped are very different. Since gold is seen as a safe-haven, investors will buy positions “just in case” something happens to currencies or stocks. Since the broader markets dropped so much, so quickly, most investors with long-term positions may have been over-leveraged on their actual cash positions compared to the level of stock they held. In this case, they incurred something known as a margin call.
This is when a broker essentially tells the investor to pay up. If stocks are down, where are they looking to get cash from? Safe havens, and gold is one of these. So if you look closely, you’ll see the broader markets dropped about 30% from their 2020 highs. But gold only slipped about 15% thanks to safe-have profit takers.
But THIS is why RIGHT NOW is so important.
The discount in gold has created a huge opportunity for the next leg in gold’s bull rally. The reason being is that from a financial perspective, nothing has changed for the better. If anything, the situation has gotten worse for banking, which makes it an even better situation for gold right now; let’s dive deeper
What Sectors Do Well In A Recession?
The long and short of it is this, one of the top-performing sectors during times of economic fall-out and/or recessions is gold and mining. If you’re too young to remember, the last major (and I’m talking MAJOR) economic melt-down came in 2008 with the financial crisis. Not only were interest rates lowered to help the economy but banks were actually failing! One of the best places for investors to secure value was…you guessed it…gold.
If you look at some of the major gold stocks of today, they’re up significantly from where they were trading at back in 2008. But it’s important to also keep in mind that during the last gold rush from 2008 to 2012, these same heavy hitters recorded serious gains. Just look at some of these numbers and where these gold stocks were trading at right when the last gold rush started during the 4th quarter of 2008
|Company||Price In 2008||Gain During Last Gold Rush|
|Royal Gold||$23.75 (Oct 28)||324% @$100.71|
|AngloGold Ashanti||$14.86 (Nov. 20)||256% @$52.86|
|Newmont Corp.||$21.47 (Oct. 24)||237% @$72.42|
|Wheaton Precious Metals||$2.91 (Nov. 25)||1,536% @$47.60|
Today, these companies trade much higher than they did back in 2008. Their time has come and gone but this isn’t to say you missed out. It’s to simply show the power of a perfect economic storm. There were low rates, currency turmoil, economic slowdown, and a recession; sound familiar?
But Why Small-Cap Gold Stocks?
While the $15 and $20 gold stocks returned incredible gains, can you see something different from the penny stock on that list during the exact same period of time? Wheaton Precious Metals was trading below $5, well within penny stock territory. During the same time the now $90 Royal Gold stock ran 324%, Wheaton returned nearly 4 times that gain. Like I said above, during gold rallies, small-cap gold stocks tend to outperform the big dogs. And I’m not the only one saying this either.
TheStreet, which is another site that you might have heard of, run by someone who’s name rhymes with Bim Jaymer, also agrees. They say, “the juniors tend to be more volatile than the majors, jumping faster in rallies, and falling further in routs. Now that gold prices seem to be on the march higher, we can expect juniors to race ahead of the major gold stocks.”
So it’s not just us at PennyStocks.com “making something up”; this is a well-known trend that investors have stood by. Obviously, the numbers don’t lie as the only penny stock on that list returned the greatest percentage over the same time-frame as the “blue-chips”.
This Small-Cap Gold Stock Is Presenting Investors With Potentially Massive Upside
Now that we’re on the same page, let’s dive into our Gold Company In Focus. Who is IMC International Mining (CSE: IMCX) (OTC: IMIMF) and what makes it a company worth looking at? This is a junior gold discovery company focused on exploiting its portfolio of global mining assets to drive revenue. It’s also important to note that IMC International Mining (CSE: IMCX) (OTC: IMIMF) has focused on rapid expansion as well, seeking out new asset opportunities around the world.
Let’s Talk About Assets
Obviously, when it comes to the junior gold discovery stocks, we’re talking about early-stage companies at the beginning of the gold and precious metals food chain. But the current & prospective projects held by IMC International Mining (CSE: IMCX) (OTC: IMIMF) could present significant opportunities for investors right now.
Aside from its Bullard Pass property in Arizona, the big story to focus on right now is the company’s latest, multi-million dollar acquisition of Thane Minerals. It’s more than just buying rights to another mineral company, it’s about what comes with the acquisition. If you’re looking for a potential “diamond in the rough” right now, this could be the exact company and deal to pay attention to.
Multi-Million Dollar Acquisition In Major Gold Discovery Zone
Thane’s interest in British Columbia’s Cathedral property could create one of the biggest opportunities in the history of IMC International Mining (CSE: IMCX) (OTC: IMIMF). Thane’s 51,000+ acre Cathedral property is in an area called the “Quesnel Terrane” which is rich in mineralization and perfect for gold discovery. In fact, just North West of this region is an area called “The Golden Triangle,” which hosts some of the richest gold ore bodies in the world.
The northern part of the Quesnel Terrane right between the Mt. Milligan Mine and the Kemess Mine. The importance of this is that the Mt Milligan copper-gold porphyry deposit contains a combined Measured and Indicated Mineral Resource of 243.9 million tons at 0.134% Cu and 0.226 grams per ton of gold, containing 717.7 million pounds of copper and 1,769,000 ounces of gold.
There’s also an Inferred Mineral Resource of 11.0 Mt at 0.306 grams per ton of gold and 0.125% Cu, exclusive of Mineral Reserves. There are currently six areas with significant copper mineralization. It also includes areas of high-grade silver and gold mineralization. As far as the Kemess Mine is concerned, it produced approximately 3 million ounces of gold and 700 million pounds of copper over the life of the mine.
The fact that Cathedral not only located right in between these mines but is also still in a relatively unexplored portion of the Quesnel Terrane means that IMC International Mining (CSE: IMCX) (OTC: IMIMF) has a real opportunity to strike gold first.
Top Management & Key Board Appointments Secure Future Potential
The Thane acquisition doesn’t only come with a mining asset, it also comes with key leadership including Greg Hawkins, MSc, PGeo. who sits as Chairman of IMC International’s Board. Not only does he have over 50 years of industry experience, but Hawkins was also the Founding Project Consultant and/or Founding Director of seven public and private Exploration/Development ventures including Brohm Mining, Banro Resource Corp, African Gold Group and other companies that were eventually acquired for millions and even billions of dollars:
- Tagish Lake Gold Corp – Acquired by New Pacific Metals, a company with a market cap of over $760 Million. Hawkins is also the current Director of the company.
- Yellowhead Mining – Acquired by Taseko Mines for nearly $20 million.
- Dayton Mining – Acquired by Pegasus Gold Inc. for $390 million.
- Nevsun Resources – Acquired by China’s Zijin Mining for $1.8 Billion.
Amid all of his ventures, they collectively accounted for over $2.1 billion in market cap at their respective peaks. But Hawkins isn’t the only industry heavyweight. The company has amassed key management with years of experience in mining and the public markets:
Brian Thurston, P.Geo President: Chief Executive Officer Corporate Secretary, Director
Mr. Thurston is a professional geologist and holds an Honours Bachelor of Science degree in Geology from the University of Western Ontario. Mr. Thurston has over 26 years’ experience working as a geologist around the globe including North, Central and South America, Africa and India. He has experience working on projects from grassroots to feasibility level. Mr. Thurston was instrumental in the initial exploration, land acquisition and development of Aurelian Resources’ Ecuador grassroots exploration and held the position of Country Manager in Ecuador from 2004 to 2006.
David Charlton: Chief Financial Officer
Mr. Charlton is a Chartered Professional Accountant CPA with over 7 years’ experience working with junior mining, oil, gas, blockchain and cryptocurrency companies in the public sector. Prior to joining the Company, David worked for midsize audit firms where he serviced a variety of TSX Venture Exchange and CSE-listed companies in audit and assurance, business consultation, financial statement preparation, and compliance.
Faizaan Lalani: Director
Mr. Lalani is an accounting and finances professional with over 10 years of experience covering audit, financial reporting, corporate finance, and operations management. Recently, Faizaan was instrumental in a multi-million dollar raise for a privately held company through various US offerings. Prior to this, he worked in the audit and assurance group at PwC, where he obtained his CA, CPA designation, gaining experience in both the public and private sectors. Faizaan currently is on several board positions for both private and public companies.
Mike Aujla: Director
Mr. Aujla brings over 16 years of experience as a lawyer, director, and officer for both public and private companies. Mr. Aujla was previously a corporate lawyer who worked with international law firms. He has experience advising companies in financial services, corporate mergers and acquisitions and commercial real estate in various jurisdictions.
How has the stock held up during this recent overall market volatility?
As discussed earlier, gold stocks saw a drop from late-February to mid-March. The main reason behind it was that investors used gold stocks to their advantage as safe havens to secure capital that they could retrieve from the broader market.
IMC International Mining Stock Chart 2020:
While most gold stocks retreated 15% or more, IMC International Mining (CSE: IMCX) (OTC: IMIMF) maintained a strong level of support through it all. So, we think that this is saying a lot when it comes to looking to top gold stocks right now.
Gold Price Chart 2020:
Where most of the other names need to claw their way back as the new gold rush begins, IMC International Mining (CSE: IMCX) (OTC: IMIMF) is already trading at a level it’s been able to maintain for weeks, ready to take advantage of the next move in gold prices.
5 Key Takeaways
The big thing to pay attention to right now is the fact that gold is on the verge of its next big move. Here are 5 key takeaways to take note of right now:
- IMC International Mining (CSE: IMCX) (OTC: IMIMF) closed on a multi-million dollar acquisition of a company with 100% ownership to a property in one of the most prolific areas for gold discovery in the world
- The company’s new Chairman, Greg Hawkins has over 50 years of industry expertise and has been part of at least 4 major mining company acquisitions collectively worth more than $2 billion in deal size.
- The current global financial climate is perfect for a bull run in gold. Precious metals thrive in an environment that has low/no interest, slowing world economies, weaker currencies, and low Treasury yields.
- The full ramifications of Coronavirus are still yet to be realized and likely still months away from showing the true economic impact. That could mean a long runway for gold’s next bull run.
- Small-cap gold stocks perform the best during gold rallies and given the latest developments by IMC International Mining (CSE: IMCX) (OTC: IMIMF), it warrants a closer look by the market.
Disclaimer: Pursuant to an agreement between Midam Ventures LLC and IMC International Mining Corp. (CSE: IMCX) (IMIMF), Midam has been paid $200,000 for a period from January 7, 2020, to February 14, 2020. Midam has been paid an additional $200,000 and extended its period of coverage to March 14, 2020. Midam has been paid an additional $200,000 and extended its period of coverage to April 30, 2020. We may buy or sell additional shares of IMC International Mining Corp.(CSE: IMCX) (IMIMF) in the open market at any time, including before, during or after the Website and Information, to provide public dissemination of favorable Information about IMC International Mining Corp. (CSE: IMCX) (IMIMF). Full disclaimer here.