CCD Distressed Valuation...Potential 20X!!!Hey Friends!
When buying a stock like this remember, you’re not buying an established blue chip. The assets are not proven. Management is not great. And the balance sheet is weak. But what do you expect at this share price? So, why on earth would anyone want to throw money at it. And that’s where experience and some IP help a lot. The company is a mess, but it is priced in. There are many exploration companies on the TSXV, but most of them are hardly worth 1.5 cents in the end. This one is worth more. But it still has to be proven!
I need to emphasize that this is a distressed situation. It’s VERY high risk. But I see it as an easy 20 bagger over the next few years, if not more. No such reward comes without risk. But a 20 fold gain is still the low end of the range if they should prove successful. What is needed is a drill program at Sarita Este and the discovery of a high grade pocket of Cesium at Taron (also by drilling) to incorporate into a resource estimate as originally planned. It could take $500k or it could take $2 million to do it. In the near term what they need to get there is is to raise some more capital and do the work.
For those of you who don’t know the story, briefly: the company has a 70% interest in about 18 projects (32 tenements) in Argentina and is selling a 5 year call on 30% of 5 of those tenements, i.e., one project.
Their portfolio includes about 7 solid drill ready and joint venture projects.
The company is short on capital at the moment but long on technical expertise and asset values.
Note that InCoR recognizes the IP value of the extraction process for the Cesium compounds for which the company acquired a patent recently for Taron.
Cesium is a rare metal that doesn’t have a huge market. It is a relatively new market developed by Cabot Corp , starting in the nineties. Within this market the cesium formate compound holds an enviable position as the cleanest and most efficient compound for use in cleaning drill bits and oil well completions.
Many industries are finding a use for the other compounds that can be processed from the metal on site, based on studies by UBC so far. So demand is growing. But the supply side has run into a crunch with the market being fed only from TANCO’s stockpiles. The TANCO mine in Manitoba that previously supplied as much as 90% of the market was shut down a few years back due to depletion and geotechnical problems.
While there are a few small pods here and there nobody really has a long term solution to the problem, but Cascadero has discovered a unique form of Cesium deposit, one that has a biological origin, and one that is much lower grade, but sits right on surface, nowhere near civilization (which is good in this case), and way bigger than TANCO ever was. The 2017 drilling resulted in a lower than expected grade, but not so low as to reject its economic value, particularly since management feels that only a fraction of the prospective area - on the Taron properties - has even been explored. So I still see this as a highly prospective asset that just requires a bit more spending to prove. It has a lot of support from the geo and academic communities.
This asset alone could be worth $200 million if it is economic. That’s $80 million for its 40%, and another $40 million if that’s what InCoR sells it for within 4 years. So lots of upside there still if I am right, despite the setbacks we have seen so far. And it would only take a million or two million to prove up (a subjective estimate).
I am also very bullish on their separate Sarita gold properties - a bunch of claims surrounding First Quantum’s huge Taca Taca porphyry in Argentina. The whole region is prospective for porphyries but has not been explored. Cascadero has found lots of evidence of a gold system on its claims, which is why they need to trench and drill those targets. If they do it will be one hell of an eye opener for First Quantum who has been busy negotiating with the Argentine government on ways to deal with the waste of their mining project (Taca Taca) without having to deal with Cascadero who has them boxed in too tight to ignore.
Another major mess up, though, and who knows. It’s not riskless. And I really don’t think you should chase it above 2 cents for now, until the financing closes, for three reasons. The first is that if it doesn’t close then the stock will stay down here for a while so you don’t want to pay too much. The second is that I’m still not sure what is happening on the roll back front or the plans for additional capital raises.
Personally, I still see the upside, but I would not chase it over 2 cents for now.
Stay ahead of the masses,
Seth Maniscalco
Founder, Crypto Wealth Coach LLC
Owner, Modern Wealth Management LP
www.CryptoWealthCoach.com
