Thanks to an ongoing 15,000 meters drilling program, Stronghold is rapidly increasing its resource estimate of 733,500 ounces of gold on its Eagle Mountain project in Guyana. As a result, many U.S. investors, who noticed these developments, contacted Stronghold about investment opportunities in the Company. With the listing, the Company meets those investors’ inquiries by providing them easier access to the stock, as well as greater transparency in their trades. This will undoubtedly expand and diversify the Company’s shareholder base in the United States.
Important to note is that Merriman Capital, a well established full service investment bank, will serve as Stronghold’s Principal American Liaison (“PAL”), responsible for providing guidance on OTCQX requirements and U.S. securities laws. Merriman will also provide equity research coverage and will introduce Stronghold to several U.S. institutional investors in the coming months.
The OTC Market
The OTC platform lists over 10,000 securities trading over $144 billion in dollar value in 2010. The OTC companies are divided in three categories, or tiers:
- The OTCQX is the most prestigious of the three tiers and is reserved for high quality companies. The OTCQX International section lists many highly respected companies like Allianz, Air France KLM and Adidas Group. Its major advantage is that it provides foreign companies access to U.S. investors, without the duplicative regulatory costs required of listing on a traditional U.S. exchange;
- The OTCQB is the middle tier and designates companies that have operating businesses and provide substantial disclosure to the marketplace. For example, OTCQB companies must provide audited financials and certain disclosures to Pink OTC Markets. However, there are no financial or qualitative standards to be in this tier;
- Finally, OTC Pink is the speculative trading marketplace that has no financial standards or reporting requirements. OTC Pink companies decide for themselves what level of information they provide to investors and may have current, limited or no public disclosure.
I initiated coverage of Stronghold Metals on Monday because the resource estimate for the Company’s flagship property, Eagle Mountain has potential of being considerably increased in the next few quarters by an ongoing 15,000 meters infill and step-out drilling program.
First analytical results from the drilling program support the expectation that the resource estimate can be expanded both within and outside the currently known mineralized zone. These are exciting times as more assay results are expected in the next few days.
The listing on the OTCQX opens up the entire U.S. investor market for Stronghold and the valuable partnership with Merriman is a following step to spread the word on Stronghold Metals among institutional parties.
Stronghold Metals is a buy recommendation with an initial price target of $0.90 or 2.25 times higher than today’s stock price.
Mr. Yannis Tsitos, the President and CEO of Stronghold Metals also conducted an informative audio interview this week which contains more information on Stronghold, its Eagle Mountain project and the Company’s excellent prospects.
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