This is a very interesting situation. Kainantu Resources Ltd. (KRL:TSX) is a junior that is just in the process of completing a significant funding that will be used to drill its properties that are close to K92 Mining Inc.’s (KNT:TSX.V) big discovery.
So let’s start by looking at what happened to K92’s stock price when it struck. As we can see on its five-year chart (Figure 1), it rocketed from about CA$0.50 to CA$9.00 for an 18-fold gain, which is certainly impressive.
So let’s have a look at a map (Figure 2) on which we see that Kainantu’s properties are on either side of the K92 mine that made the big discovery in Papua New Guinea, and close to a range of other discoveries, too. So it is clear that if Kainantu found something significant here — and the chances are good that it will — its stock could take off like a rocket from its current low level.
In light of the map (Figure 2), the latest stock chart (Figure 3) presents an appealing picture for it shows that it is attractively priced here after its slow drift lower from a minor peak back in May at almost CA$0.40.
While this stock chart doesn’t look very inspiring at first glance, it starts to look a whole lot better when you factor in that the company is completing an oversubscribed financing at CA$0.18 and will use the proceeds to drill its land that is close to K92’s big find and close to other finds too, as set out above. Note that there isn’t much more chart history — it only goes back about a month more than is shown here.
Kainantu is therefore rated an immediate speculative buy here. Note that currently it only appears to be traded on the Canadian market.
Kainantu Resources' website is here.
Kainantu Resources Ltd, KRL.TSX, closed at C$0.17 on Jan. 4, 2022.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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Charts provided by the author.
The above represents the opinion and analysis of Mr Maund, based on data available to him, at the time of writing. Mr. Maund's opinions are his own, and are not a recommendation or an offer to buy or sell securities. Mr. Maund is an independent analyst who receives no compensation of any kind from any groups, individuals or corporations mentioned in his reports. As trading and investing in any financial markets may involve serious risk of loss, Mr. Maund recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction and do your own due diligence and research when making any kind of a transaction with financial ramifications. Although a qualified and experienced stock market analyst, Clive Maund is not a Registered Securities Advisor. Therefore Mr. Maund's opinions on the market and stocks can only be construed as a solicitation to buy and sell securities when they are subject to the prior approval and endorsement of a Registered Securities Advisor operating in accordance with the appropriate regulations in your area of jurisdiction.