About six weeks back, I penned a brief article regarding Altamira Gold Corp. (ALTA:TSX.V; EQTRF:OTCBB), following their preliminary announcement that hinted at findings from their initial borehole at Maria Bonia. I'm generally skeptical about announcements focused on visual observations. These typically attract speculators who follow the "buy the rumor, sell the news" approach.
Despite remarkable results from this year's first Maria Bonia hole yielding 158.2 grams per meter, nervous investors dumped shares on Wednesday, October 15, after the company revealed the assay data, causing a 10.6% decline that day.
When evaluating assay findings, you need to consider two key factors: mineral concentration and intersection distance.
The most effective measurement converts these to grams/meters. Essentially, any figure exceeding 100 grams/meter is considered superb. You simply multiply concentration by distance. So while a 395.5-meter intersection is extraordinary by industry standards, some investors perceive a 0.4 g/t gold concentration as insufficient. However, with such an extensive intersection, this concentration is far from inadequate. This discovery will significantly increase the existing 1.42 million ounce gold resource at Cajueiro.
As I compose this, gold is valued at $4,199 per ounce or $135 per gram in USD. For surface extraction operations, 0.4 g/t gold represents exceptional value. Yesterday's reaction suggests many Altamira investors are failing to see the bigger picture due to excessive focus on minor details. We're experiencing unprecedented highs for precious metals almost every day, yet investors remain blind to what's plainly evident.
Altamira has finished an additional five boreholes across two of its nine priority Brazilian exploration zones. At the Tavares Norte and Morro Verde projects, Altamira has completed 1,256 meters of drilling and forwarded samples for laboratory analysis. The verified resources documented thus far in Altamira's 43-101 reports fall within this geological formation. A second deep exploration hole is currently underway at Maria Bonia.
Altamira is an advertising client. I've purchased shares through market transactions and intend to join any forthcoming private investment rounds, which admittedly creates bias. It's precisely these small-capitalization, affordable stocks that offer the greatest percentage gains. I found the stock attractive at higher valuations; I find it even more compelling at current prices.
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Important Disclosures:
- Bob Moriarty: I, or members of my immediate household or family, own securities of: Altamira Gold Corp. My company has a financial relationship with: Altamira Gold Corp. My company has purchased stocks mentioned in this article for my management clients: None. I determined which companies would be included in this article based on my research and understanding of the sector.
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