E2Gold Inc. (ETU:TSX.V), a Toronto-based small-cap gold exploration company, recently received positive attention from independent technical analyst Clive Maund and Dr. Quinton Hennigh, Geologic and Technical Director of Crescat Capital. Hennigh’s firm is a Denver-based global macro asset management firm that recently led a financing round for E2Gold and now holds 10% of the company.
"...The company presents an exciting opportunity if an investor wants to swing for the fences.”
E2Gold currently is engaged in an early-stage gold exploration project -drilling operation at its 60-kilometer-long Hawkins property located between Ontario’s historic Sault Ste. Marie and Timmins mining districts.
Given the firm’s potential, Maund wrote on September 7 that he bought E2Gold in June, expecting a further advance. Instead, the stock remained in a base pattern. “However, its technical condition has continued to improve.”
Completing what is known as a Double Bottom, he said the stock’s base pattern has been accompanied by positive volume and strong volume indicators, “with both the Accumulation line and On-balance Volume hitting new highs, which together make the probability high that this base pattern will lead to a bull market in the stock.”
Fundamentally, Maund wrote, “all the pieces are in place for a new bull market in gold to develop.” With that as a backdrop, Maund is optimistic for E2Gold’s prospects.
“With a successful financing behind it and a robust drilling program underway, the outlook is bright,” he wrote. “The stock is clearly not expensive here, having barely advanced out of its base pattern. We therefore stay long and it continues to be rated a buy at these levels.”
Equally positive was Dr. Hennigh, a long-time mining and exploration expert. In a recent Streetwise Live! video, he said that E2Gold’s prospects look comparable to the great Hemlo project, which turned out to be the largest single gold deposit in Canada. E2Gold’s Hawkins property, Hennigh said, is only about 110 kilometers away from Hemlo’s mining operations and shares much of its geologic attributes.
“Already, it is much like Hemlo at shallow depths,” Dr. Hennigh said, “and the company is committed to drilling deeper holes and testing the hypothesis that there may be Hemlo-like deposits at depth in its McKinnon zone.”
For gold investors, Hennigh noted that the price of the metal is now in one of its quiet periods and likely looking for a reason to rise.
“The discovery of a Hemlo-like find would be remarkable,” Hennigh said. “Of course, there is no guarantee of that, but E2Gold is doing diligent testing of the hypothesis. Its basis for testing at a deeper level is well founded, and the company presents an exciting opportunity if an investor wants to swing for the fences.”
In the same video, Dr. Eric Owens, President, CEO and a Director of E2Gold, described the capitalization structure of his company.
“We have 95 million outstanding shares, 65% of which are tightly held,” he said, adding that eight funds, led by Crescat, are now among the company’s shareholders.
Streetwise Reports Disclosures:
1) Evan Cooper compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor/employee. He/she or members of his/her household own securities of the following companies mentioned in the article: None. He/she or members of his/her household are paid by the following companies mentioned in this article: None. His/her company has a financial relationship with the following companies referred to in this article: None.
2) Dr. Quinton Hennigh is Crescat Capital’s full-time Geologic and Technical Director. You should assume that as of the publication date, Dr. Hennigh has a position in the securities discussed and therefore stands to realize significant gains in the event the price of security moves.
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