Technical analyst Clive Maund examines Aztec Minerals Corp. to explain why he thinks it's a strong buy.
Aztec Minerals Corp. (AZT:TSX.V; AZZTF:OTCQB) is primarily a well-established gold and silver exploration company that is positioned to make one or more potentially significant discoveries in mining-friendly areas of Arizona and northwest Mexico with a view to 'significantly increase its value, which will likely result in it being repurchased at a higher price. by a large mining company.
The reason it is of interest to us, as investors and speculators, is that its shares are currently trading at relatively low prices, at a time when the entire mining sector is about to embark on a bull market. major for various reasons likely to take on unprecedented proportions.
Before we look at Aztec's latest stock charts, we'll go over the company's fundamentals using a set of slides from its latest investor presentation, but note that we will not review those detailing the geology of the company's properties for reasons of space and because we do not need to go into that kind of detail. Those of you who have knowledge of geology and are interested can, of course, find this information in the file linked above.
So we'll start with an overview of the company.
This slide in the filing makes the case for buying stocks on a single page, provided it is backed up by what we see on stock charts, and it is.
The next slide shows the location of the company's two large properties, one just north of the border near Tombstone, Arizona, and the other not far away in northwest Mexico.
The Tombstone property contains primarily gold and silver, and the Cervantes property is primarily gold.
Now, we'll briefly introduce these two great properties, starting with Tombstone.
The map on the next slide shows Tombstone's location relative to other deposits in the area, some of which are LARGE, like the Taylor deposit discovered by Arizona Mining, which was later gobbled up by South32, resulting in massive windfalls for the company's investors. , and Tombstone has similar potential.
The next slide lists attributes of the Tombstone property, in which the company has a 75% joint venture interest, and shows a photo of the oval-shaped containment pit.
The location and surroundings of the other large property, the Cervantes property in northwest Mexico, are shown on this slide, and it is interesting to see that there are other large and mid-cap companies operating nearby, such as Agnico-Eagle, Alamos Gold. , Minera Alamos and Osisko, and they wouldn't be in the area without good reason.
The next slide lists the Cervantes property attributes.
The company makes no secret that it will become a takeover target if it makes a significant discovery, as seems likely, and gives the example of what happened to Arizona Mining's stock price after the discovery. the enormous Taylor deposit and its redemption. by South32.
The final slide shows the capital structure, and it's worth noting that of the 109 million shares outstanding, 14% are owned by insiders, of which 35% are closely held, and Alamos Gold is a strategic investor.
Now we'll take a look at Aztec Minerals' latest stock charts to see what they have to say about its prospects.
We'll start by looking at the long-term 9-year chart to get an overview of the stock's history and what it means for the future. From this chart, we can see that the stock has been in a persistent bear market since mid-2020 for almost four years now; however, for various reasons, this bear market is believed to have come to an end, with the final low being reached in February.
One of the main reasons is that all the action since the mid-2020 peak is supposed to make up the handle of the giant cup and the base of the handle depicted on the chart. This is a very important observation because, if true, it implies that the stock will, when the time comes, break out of the top of this pattern, and that is a perfectly reasonable expectation given that gold, silver and copper begin to develop. should prove to be their biggest bull market ever – and here we must note that the stock price will triple from its current position even before it breaks out of the top of the cup base and of the handle.
Before leaving this chart, it is worth observing the upward volume accumulation over the past few months, which has caused the accumulation line to improve. This is a sign that the giant base pattern is over and a new bull market is about to occur. which makes sense given that the big bull market in metals has now begun.
Zooming in now using a 2-year chart, we see that a severe decline followed the peak almost a year ago last April, and this was followed by a basic pattern that s is developed from last October and is better classified as a double bottom.
We can see that there was a fair amount of upside as this base pattern formed, which pushed the accumulation line higher. It's optimistic. The strong rally earlier this month is a sign that this basic pattern is over, and we will now look at recent action in more detail on a 7-month chart, with this time frame selected to allow us to see the first low . of the basic pattern that occurred last October.
On the 7-month chart we can see the basic pattern almost entirely, and the attempt to move away from it was made in early April. Although the price reacted towards the base pattern following the attempted breakout, this action is not considered bearish at all. Rather, the attempted breakout served to eliminate some of the overhanging supply and shift the moving averages to better levels. alignment, paving the way for a more sustained rise soon.
Additionally, we can see that a bullish crossover of the moving averages is currently occurring, and with the reaction of the last two weeks having completely neutralized the prior overbought condition, all the pieces are in place for the stock to advance again in a second stage whose gains will be less likely to be transferred.
Aztec Minerals is therefore considered a strong buy for all time frames.
Aztec minerals website.
Aztec Minerals Corp. (AZT:TSX.V; AZZTF:OTCQB) closed for trading at CA$0.20 and US$0.147 on May 2, 2024
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Important Disclosures:
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their households) own securities of Agnico Eagle Mines Ltd. and Osisko Gold Royalties Ltd.
- Certification and remuneration of authors: (Clive Maund of clivemaund.com) is compensated as an independent contractor by Street Smart, a subsidiary of Streetwise Reports, for the writing of this article. Maund qualified as a British Technical Analyst in 1989. The recommendations and opinions expressed in this content fairly reflect the personal, independent and objective views of the author regarding all designated securities discussed. No part of the compensation received by the author was, is, or will be directly or indirectly related to the specific recommendations or opinions expressed.
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Clivemaund.com Disclosures
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 do not constitute a recommendation or offer to buy or sell any security. Because trading and investing in any financial market may involve significant risk of loss, Mr. Maund recommends that you consult a qualified investment advisor, licensed by the appropriate regulatory bodies in your jurisdiction, and make your own due diligence and your own research when making any kind of transactions. of a transaction with financial consequences. Although qualified and experienced securities analyst, Clive Maund is not a registered securities advisor. Therefore, Mr. Maund's opinions on the market and stocks should not be construed solely as a recommendation or solicitation to buy and sell securities.