Otis Gold Corp: OOO-La-La

Mickey Fulp, Mercenary Geologist (03/08/2010)
"I had an interesting discussion over a very nice dinner with Craig Lindsay, the CEO/President and Mike Belantis, the director of corporate development for a Vancouver junior called Otis Gold Corp. It has a cool stock symbol: OOO.V: Hard to forget that.

The company has good liquidity with recent volume of about 400,000 shares per week. Its 52-week high/low is 83 to 23 cents, the 30 day is 63 to 47 cents, and it is currently trading in the high 40- to low 50-cent range. Market capitalization is about $13 million and current working capital is $4.0 million. The corporate burn rate is low at a little over $50,000 per month.

. . .Clearly the people involved with OOO meet my expectations for a junior resource company.

Otis Gold follows the prospect generator model, which analysts, newsletter writers, and smart investors love. And in OOO’s case, it has a flagship project to boot. So the corporate plan is to focus exploration dollars on the Kilgore project. The Oakley advanced exploration project and three other precious metals projects in Idaho and one in Nevada are available for joint venture.

With its current 43-101 qualified resources, Otis Gold Corp has the right to earn 75% of 218,000 indicated ounces gold, or 163,000 ounces, 75% of 269,000 inferred ounces gold or 202,000 oz, and 100%

of 235,000 ounces gold. The present total 43-101 gold budget attributed to OOO is 600,000 ounces. With a market capitalization of $13 million, the market is currently valuing Otis Gold’s qualified resources at less than $22 per ounce. Industry wide peer comparisons for pre-production, in-the-ground gold ounces are currently about $85.

My conservative valuation does not account for historic resources that are not yet qualified and the strong exploration potential of its flagship project, the joint venture value of other projects, or the current working capital.

I must therefore conclude that Otis Gold is severely undervalued at its recent closing price of 50 cents."

 PRINT THIS PAGE   EMAIL THIS PAGE

Under SEC rules, analysts are required to disclose their interest in securities that they cover. We strongly encourage you to contact them to understand any potential conflicts of interest they may have.

Related Quotes: