TANZANIAN GOLD update…
Authored by Clive Maund
originally published Friday, June 28, 2019
It’s a case of so far, so good with the ongoing deep drilling program at Tanzanian Gold’s Buckreef project in Tanzania, where the aim is to delineate the extent of mineralization beneath the planned open pit, and in the process better define the mineralization within the open pit itself.
The stock has taken a rest over the past several months, running off into a rectangular consolidation pattern, following a strong runup at the start of the year which we capitalized on, as we can see on its latest 6-month chart below, but now, with the 200-day moving average having partially caught up with the price, and gold breaking out, it looks like it is limbering up to break out to new highs, with the pause of recent days looking like a tiny bull Flag.
The overall tenor of this chart is bullish, with the alignment and direction of moving averages being positive, which makes a breakout to new highs likely soon that should lead to another substantial upleg.
How far could it advance in favorable conditions? We can get some idea by looking at the long- term 18-year chart, which shows that the stock was trading at much higher levels for many years, before being dragged down to a very low level mainly be the severe depression afflicting the sector. To look at this chart you would think that management had done nothing in recent years but sat back in their chairs with their feet on the table throwing paper aircraft around.
Instead of which they have driven forward and delineated a profitable open pit at Buckreef which has the potential to be a supermine, if strong mineralization extends to depth below it, which is the reason that it is currently being deep drilled, with positive results to date. What has happened to the stock is that, after dropping to an extremely low level in 2014 – 2015, it appears to have marked out a giant “Double Bucket” base, which may have taken this form because of course buckets having such an esteemed place in mining history. In any event this base pattern looks complete, and with gold now starting to break out of its giant 6-year long base pattern, Tanzanian’ stock could see really big gains from here.
A couple of days ago the company announced a funding that took the form of a direct placement of almost 2 million common shares at a price of $0.58, which appears to had no adverse effect on the stock price, which is doubtless due to the offering having been fully taken up.
In conclusion, Tanzanian Gold looks like it is on the up here, with the prospect of further positive results from the deep drilling program at Buckreef, and with a major new gold bullmarket just signaled, should “have the wind at its back” going forward. So we stay long and it is rated a strong buy.
Tanzanian Gold website
Tanzanian Gold Corporation, TRX, TNX.TSX, trading at $0.84, C$1.10 at 10.31 am EST on 28th June 19.
Posted at 12.20 pm EDT on 28th June 19.