Analysts at Couloir Capital have examined the stock of gold explorer Quimbaya Gold (CSE QIM / WKN A3DT3C) and recommend it as a buy. They initially see the fair value of the stock at $1.00. From the price at the time of the analysis, this represents a potential of 117%.
As the experts explain, Quimbaya Gold owns a strategically located, large area in the Segovia mining camp in Colombia, which borders a producing gold mine. The company is currently initiating its first drilling program, with Quimbaya targeting high-grade veins along a known, nearby trend of rich veins.
According to Couloir, the first 4,000-meter drilling program is designed to confirm high-grade gold veins, which should quickly provide indications of a gold resource. The analysts point out that the exploration work is supported by a team of technical advisors with extensive expertise in this specific region. These experts are also responsible for land acquisition, drilling program design, and ongoing project evaluation.
Couloir Capital also finds Quimbaya’s collaboration with Independence Drilling, Colombia’s largest drilling company, interesting. The latter has committed to conducting 100,000 meters of drilling in exchange for Quimbaya shares, in order to advance the Tahami project to the resource stage. Additionally, the company recently raised CAD 2.79 million to finance exploration and general operations.
According to the analysts, Quimbaya’s strategy is to look for opportunities to enter into formal partnerships with local producers, identify and provide material for production expansion, and thus generate cash flow.
Given a tight capital structure and strong support from institutions and insiders, Couloir Capital believes the stock could react with significant price movements in response to positive exploration or drilling results.
Accordingly, they recommend Quimbaya as a buy for investors seeking the opportunity to participate in a promising explorer in Colombia’s Segovia mining camp. With the ever-increasing gold price, the company’s upcoming drilling program presents a promising opportunity. Therefore, Couloir sets the initial price target for the stock at CAD 1.00.
