Should you buy this Nano-cap Gold Stock – CDT?

Castle Minerals Limited

CDT Details

Efforts to drive growth: Up 4.2% on March 12, 2018, Castle Minerals Limited (ASX: CDT), a Perth based ASX listed gold exploration company with projects in Ghana and Pilbara region of Western Australia, had posted a mixed financial result. The group had faced ASX price queries and it has highlighted that the announcements of 7 November 2017, 20 December 2017 and recent quarterly activities report, led to the price movement. CDT has undertaken a detailed review and interpretation of recent mapping and historical drilling data in respect of its Beasley Creek Conglomerate-Hosted Gold Project and flagged for renewed market interest in Pilbara conglomerate-hosted gold mineralisation exploration with regards to high grade gold sampling results on the Purdy’s Reward Conglomerate Gold Project. As per the recent updates, Mt Roe Basalt and Conglomerate are considerably more extensive than expected. Further, four key prospect areas have been identified along 16km unconformity surface with historical RC drilling (1998) intersected interpreting Hardey Conglomerate with best intercept. As at December 2017, the group had secured rights to acquire 80% interests in exploration licence applications at Coolyia Creek and Beasley Creek, and has generated and reviewed several new project opportunities around conglomerate-hosted gold style targets in the Pilbara region, and a range of commodities in Western Australia. The group’s cash position at end of December Quarter was $1,100,000.
 

Beasley Creek (Source: Company Reports)
 
The group’s FY17 profit was $8,911 against the FY16 loss of $480,297 indicating a turn-around from loss making positions over the last four years, while revenue surged from $282,339 in FY16 to $563,827. Gain on sale of subsidiary helped the group in terms of boosting financial position.  During the year, the company has raised funds through placement of 10 Mn ordinary shares. These were used to actively advance the Group’s project in Ghana, West Africa.

CDT stock has been moving on volatility with 25% fall in three months, followed by a 20% rise in one month and then a 11% fall in last five days (as at March 10, 2018). We believe that the stock does have a potential to offer returns but is susceptible to the volatile environment and commodity price movement. We consider this to be a highly speculative stock and would recommend a wait and watch approach to see more positives that the company may unveil for attaining some stability towards an upward momentum.

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