Market action: Colonial Coal, A TSXV Top Gainer of the Week

Colonial Coal International Corp. (TSX.V:CAD) sounds like the kind of thing that one might use to stir up an outraged mob of liberal arts majors, but it caught our attention for having been one of the largest gainers by percent on the TSX Venture today, making an $0.085 jump to $0.435 on 671,000 shares, the most volume it’s seen since May.

The company hasn’t been very active this past year, having released no news at all about their core coal business in the past 12 months. Colonial spent a total of $1.5 million in their last fiscal year (ending July, 2019), none of it on mineral exploration, and drew a price chart that reflected a global slump in metallurgical coal prices.

But the stock caught a tailwind following the November 19th appointment of an experienced Indian coal executive to Colonial’s board of directors. Partha S. Bhattacharyya is a former director of Coal India Ltd., a government controlled Indian coal company and the largest coal producer in the world.

S&P Global Platts reported today that import restrictions in China are likely to lead to India overtaking China as the world’s largest net importer.

The British Columbia business press lives in a perpetual state of optimism about their coal industry, fawning over the companies who operate them, perpetually forecasting price turnarounds and parsing the annual rises and falls in different countries coal imports from BC, looking for meaning.

India has shown great appetite for BC Coal recently. In 2018, 3.6 million tons of met coal were shipped there out of the Port of Vancouver, 14% of the 24.6 million ton total.

Colonial Coal‘s properties in the Tumbler Ridge area of BC are marked here in yellow, on this scale-less map taken from their most recent investors presentation (January 2019).

Colonial issued stock options on the 20th, giving traders the green light to speculate that it might be time for CAD to get busy. The company has two met coal properties in BC’s Tumbler Ridge area that amount to 277.7 million measured and indicated tons of coal; a fairly preliminary estimate that will require a great deal more work before it’s a bankable resource.

If CAD plans to do any more development on those properties, they’re going to have to raise some money. The cash balance at the end of July was $2.7 million.

Colonial Coal last traded at $0.435 on the Toronto Stock Exchange, up 24.3%.

Information for this briefing was found via Sedar and Colonial Coal. The author has no securities or affiliations related to Canada House Wellness. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.