Gold Price Analysis – Durango Resources (TSX.V:DGO)- a Market-Beating Junior
Gold returned +/- 25% to investors last year and analysts remain bullish on the metal’s outlook. Durango Resources (TSX.V:DGO) could exceed market expectations.
Durango Resources (TSX.V:DGO)
— Marcy Kiesman
QUEBEC, CANADA, March 29, 2021 /EINPresswire.com/ — In Canada’s Windfall Lake, 200km north of Val D’or (Valley of Gold), three companies are positioned around the same geological faults in the most active exploration site in Quebec, the Abitibi greenstone belt. These companies include Osisko Mining Inc (TSX: OSK), BonTerra Resources Inc (TSXV: BTR) and Durango Resources Inc (TSX.V: DGO). Over the last 12 months, both Osisko Mining and BonTerra Resources saw negative share price movements, yet significantly outperforming the Canadian metals & mining market was relative newcomer and close neighbor, Durango Resources.
The junior mining companies have received increased financing since 2019 owing to diminishing above-ground gold supply, but the recent turnaround in the gold spot price has highlighted that these companies possess untapped growth potential.
As of March 4th 2021, CA metals & mining market grew by +28.2% over 12 months. Over the same period BonTerra retreated -17.3% and Osisko -12.6%, while Durango pulled ahead of the wider market to return +38.5% to its shareholders. Share price movement in-line with the gold price reversal suggests little upside potential outside of the main gold trend, and investors might be better off buying bullion or ETFs than a company that tracks the spot trend.
Generally, gold companies see heavy investment and positive share price movement on good news. Positive drilling assays, an NI 41-101 resource estimate, PEA, PFS or FS will almost always result in climbing share values.
Osisko has already passed the PEA stage: Reporting positive drill results in July 2018, coinciding with an influx of large-scale investment and the beginning of a bull-run in its share price lasting around 12 months. Currently, Osisko trades at CA$2.87; a reasonable valuation considering the company is still delineating its albeit large resource.
BonTerra experienced similar in 2017 with the extension of its Gladiator deposit, attracting major private placements and seeing the share price almost triple before the end of the year. BonTerra’s share price sits at CA$1.10 as of March 4th, which for now seems justified on the basis that the company’s land package and grades are significantly smaller than Osisko’s.
Durango (TSX: DGO) is just beginning to release results from its drill targets, some just meters away from Osisko’s highest priorities. The positive trend in its share price suggests that retail investors are excited by the prospect of further discovery at Windfall, and at only CA$0.09, represents the highest near-term upside potential of the three.
While Osisko and BonTerra have substantial works ahead to achieve a PFS and PEA respectively, Durango is fully permitted for the current drill program and should be steadily releasing assays in the coming months.
Should the company strike gold during the present drill program, it would prove that Durango’s Windfall project shares the same structural geology as its neighbors, almost certain to prompt strong positive movement in the share price.
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Durango: You find gold where there is gold