Gediminas Jasionis
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Canaco Resources Inc. (CVE:CAN) (PINK:CANWF) Stays Oversold

by Gediminas Jasionis May 17, 2012
90can_chart.pngCanaco Resources Inc. (CVE:CAN) (PINK:CANWF) share price regained some ground on Wednesday in what seems to be a temporary consolidation period.

CAN tanked 60.3% on Tuesday under a humongous trading volume and some interest still remains. Wednesday's session pulled in 4.7 million in volume while the average is only 1.4 million.

The selloff was a reaction to the company's latest report declaring mineral resource estimates for the Magambazi area the Handeni project in Tanzania. At a cut-off grade of 0.5 grams per ton, the company estimated to have 15.2 million tons or ore grading around 1.48 g/t. That's somewhat 721.3 thousand ounces of gold. The inferred resource estimates adds another 292.4 thousand ounces.

A full technical report supporting the estimates should be filed within the coming 45 days. Preliminary economic assessment will follow.

4canaco_logo.jpgThe current market cap is only $61.9 million, which is far below their net book value of $164 million and even lower than what Canaco has in cash and marketable securities. The resource estimate might have fallen below expectations but the company's fundamentals are not really bad and there's still a substantial amount of gold present on their properties. Sooner or later the stock price should get some bullish action and creep out of this oversold position.

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