The small cap specialists at UK-Microcap.com recommended shares in Conroy Gold & Diamonds in August 2008. Since then they have risen by 86%. To find out how to subscribe to this exclusive website, limited to just 200 premium investors,
click here.
Company Description:
Conroy Diamonds & Gold was formed in 1995 by CEO Professor Richard Conroy, the shares began trading on the old OFEX markets in 1997 and the company moved to the Alternative Investment Market in 2000. Professor Conroy has always believed that Ireland represents an attractive opportunity for gold exploration, particularly with regard to the Longford-Down Massif, the company's principal area of operation. And right he was.
The company's main asset is its 1 million ounce JORC-compliant gold resource at the Clontibret project. More excitingly this only covers an area amounting to only 20% of the target anomaly, providing the potential for significant resource upgrades. Conroy has recently appointed an engineering consultancy to carry out a scoping study at Clontibret, with the aim of determining if the resource can support a profitable mining operation .
Elsewhere, Conroy is exploring the Clay Lake target, in search of the source of the fabled 28 ounce Clay Lake gold nugget which was discovered in the 1980's. Recent drilling results from Clay Lake delivered figures including 1.57g/t gold from 22.5 metres, followed by a 63 metres intersection of 0.62g/t gold and 1g/t silver from 90.5 metres, the first 9 metres of which averaged 1.48g/t gold and 1g/t silver. Although the gold values being delivered are relatively low grade, the current strong gold price means that Conroy has a potentially very exciting project. What's more, with the project area covering more than 1.4 million square metres, there is plenty more potential for the company to deliver good news during the current drilling campaign.
With regard to its financial position, the group has limited cash resources, but its principal investors are committed to funding the company through the exploration stage. Obviously, some equity dilution is expected, but the current valuation is so pessimistic when compared to the size of the underlying asset that we don't see this as representing a problem. When the company enters the development phase alternative sources of funding will be called for, such as taking on board a JV partner.
Do Good with every Trade!
Trade UK Shares online for only GBP9.99
All limit orders FREE
Telephone Dealing from GBP15
No transfer in fee
ISA service provided
Yearly account fee only GBP 5
25p of each trade is donated to Woodlarks
ShareCrazy Trader – trade shares online |
| Click for Full Charting facilities
from ShareCrazy.com |
Bull Points:
– High potential for further resource upgrades given the fact that 80% of the Clontibret target anomaly remains to be tested.
- Potential for a rise in the value of the dollar against the euro to augment the estimated value of the company's resource.
- Operational risk in Ireland is negligible.
- Gold price remains buoyant.
Bear Points:
– Equity dilution in the near future unavoidable.
- Production not expected for many years
|
*The value of investments can go down as well as up. Past
performance is no guarantee of future success. Investing in
equities can lose you part or all of your capital. The tips
given here are of necessity, general. They cannot relate to
the individual circumstances of investors. Anyone
considering following the recommendations contained here
should seek independent advice. Smaller company shares
usually suffer a wider bid offer spread the blue chips and
can be illiquid and hard to sell and must therefore be
deemed higher risk investments.
|
Recommendation:
What the company has achieved to date is quite possibly the tip of the iceberg. It has barely scraped the surface of the potential at Clontibret, not to mention the rest of its property along the Longford-Down Massif. The potential for upgrades is therefore very significant indeed.
At the current share price the market values Conroy's 1 million ounce JORC resource at Clontibret at around $11.5 per ounce (£7.3) at a time when gold, at $1,100, is trading near its all time high. With that valuation assuming no value being given to Clay Lake, which looks like it could be a significant discovery in its own right, the shares continue to have significant upside potential. SPECULATIVE BUY.
*The SF t1ps Smaller Companies Growth Fund and the t1ps Smaller Companies Gold Fund, which are managed by a subsidiary of Rivington Street Holdings, the ultimate owner of UKMicrocap.com, owns shares in Conroy Diamonds & Gold. For more information on the funds email spiros.kurtidis@t1ps.com
Key Data
EPIC:
CDG
Market: AIM
Spread:
5p – 5.25p (4.77%)
UKMicrocap.com is
unashamedly elitist in its approach. We are elitist in that we are
restricting access to this site to just 200 investors. When we have 200
serious investors using this site we simply cease to take new membership
applications. That means that when we recommend a stock our members can buy
shares in that stock at, or near to, the recommended price without being
trampled in the herd. To join UKMicrocap.com now click
here.
