CDN Junior Miner With Market Cap Under $2MM Holds Several Promising Mining Projects

The turmoil from virtually everywhere overseas (i.e.
Greece, Spain, China, etc.) has investors wracked with
concerns about growth. Add in the debacle happening with
the European Union and money managers should be turning
their attention to investments much closer to home to
hedge risks associated with business activities from
those countries. The U.S. and Canadian markets have been
declining primarily as a result of dysfunction overseas,
not necessarily as a result of economic data stemming
from North America which continues to show growth,
albeit at a slow pace.

Bob Doll, Chief Equity Strategist at Black Rock,
commented on Monday that investors consider adding to
their equity holdings on dips such as what is happening
currently because the overall bull market of the last
year will prevail. Black Rock’s strategy is to slowly
accumulate on these types of weaknesses.

Equities and commodities have retraced well off of highs
in 2011. Metals, particularly precious metals like gold,
offer a value proposition as they typically serve as a
“safe haven” for investors during times of global
economic disarray, as was seen last Friday (June 1st,
2012). Going against the trend that has been established
over many decades, metals are trading more like equities
at this moment in direct response to overall market
sentiment, but this trend simply will not last as it is
counterintuitive to general investing principles. By
deduction, it would make sense for investors to look for
plays that are depressed in price, offer strong growth
potential and are focused on mineral exploration in and
around North America. Those looking for exponential
upside will turn their attention to junior explorers
properly aligned for steady, non-linear growth.

Using these metrics should put Vatic Ventures Corp. (TSX-Venture:VCV)
firmly on the radar of investors with its diversified
portfolio. Headquartered in Vancouver, British Columbia,
Vatic is a junior exploration company holding gold and
silver projects in Mexico and Canada: the BM property in
British Columbia and the La Silla and La Silla West
properties, in Sinaloa, Mexico. At this time – and
because of their prolific nature – the company is
primarily engaged in the exploration of its optioned La
Silla and La Silla West gold-silver properties. The BM
property was acquired in January 2011, the La Silla West
property in April 2011 and the La Silla property in
April 2012.

A “grass roots” investment opportunity, the projects
offer considerably more upside than many of the holdings
of Vatic’s peers. The BM property encompasses 7,126
hectares in the Spences Bridge Gold Belt near Merritt,
B.C., where low sulphidation epithermal precious metal
mineralization has been discovered. In fact, the Spences
Bridge Gold Belt was an area of significant exploration
in the early 1900’s when course gold findings in the
mid-1800’s initiated the Gold Rush in British Columbia.
Placer gold was mined from the Fraser and Thompson
Rivers and tributaries along the gold belt.

Although explorers seemed to move further north in B.C.
later in the 20th century, the area is rapidly emerging
again as an epithermal precious metal exploration
target. More recently, Fairfield Gold (merged with
Almaden (TSX: AMM, AMEX: AAU) in 2002) produced 51,500
ounces of gold at a whopping 97 g/t (3 o/t) from test
pit and underground decline in 1992-1995 at its Elk Gold
property outside of Merritt.

Exploration has been conducted since 2006 on the BM
property with a NI 43-101-compliant Technical Report
generated in May 2010. The report suggested undertaking
an exploration program at the property, which would
consist of an airborne magnetic survey followed by grid
soil geochemistry, prospecting, and mapping. By the end
of August 2011, Vatic had finished the mapping and
sampling phases.

Results from the exploration released in January are
extremely encouraging; showing a linear 900 metre long
by 25 to 50 metre wide multi-element anomaly on the
property. The anomaly is highlighted by gold and silver,
along with pathfinder elements antimony and selenium.
The company is evaluating a drill program on the project
currently.

Heading south, Vatic has acquired the right to earn an
undivided 100% interest in the La Silla West claims in
the State of Sinaloa, Mexico from K.J. Gold Canada Ltd.
and its wholly owned Mexican subsidiary. The property
encompasses about 29,000 hectares and is part of the
Trans Mexican Volcanic Belt, which hosts numerous world
class gold and silver deposits such as the San Dimas
Mine of Primero Gold , 75 kilometres to the east, and
the Cienega mine of Fresnillo, 115 kilometres to the
northeast. The property contains an abandoned
underground gold mining operation, known as the Ebano
vein and hosts multiple epithermal veins and stockworks
with widths up to 20 metres, and historical grades up to
30 g/t gold and 1,800 g/t silver. Some parts of these
structures have been historically mined on a small scale
as reported by KJ Gold.

Vatic pulled off a real coup recently by entering into
an Option Agreement with Minera Meridian Minerales SRL
de C.V., a subsidiary of Yamana Gold Inc. (TSX: YRI), to
acquire the 14,000-hectare gold-siver property known as
La Silla. Interestingly, Vatic’s La Silla West property
completely surrounds the La Silla property. Going
forward, La Silla will be Vatic’s focus. Vatic acquired
the right to earn an undivided 100% interest in the
claims – comprising 14,427 hectares – bringing the total
Vatic-owned land area in the region to around 43,000
hectares. Vatic can earn a 100% interest over a
four-year period by paying Minera various cash and share
payments, and by spending $8 million on exploration.

Minera has done considerable work on the property,
having drilled 99 holes and identified 31 gold-bearing
veins. The property’s drilled-inferred resource
inventory is almost 500,000 ounces of gold. This is
historic work and is not 43-101 compliant.

Further, the La Silla West claims surround the El Rey
property of Arianne Resources (TSX-Venture: DAN) which,
in 2010, reported drill results of 28.35 g/t gold and
245.78 g/t silver over 3.5 metres.

Much like the La Silla West claims, parts of the new
claims were previously mined on a small scale. Minera
Meridian identified 31 structures on the property in the
year 2000 and, between the years 2003 and 2004, drilled
99 reverse circulation holes in 14 of the structures.

In the first year after the closing of the option
agreement, Vatic plans to drill about 2,000 meters on
the previously explored veins. In 2013-2014, the
drilling should intensify and cover undrilled veins. A
NI 43-101 compliant resource estimate for the property
is likely in 2014.

In a 2006 resource estimate, La Silla was reported to
host 260,000 ounces of gold and 3,045,000 ounces of
silver in the Inferred category. Breaking this down, the
acquisition of the property based solely on those
resources and giving no consideration for future
findings, eResearch analysts Yuri Belinsky, B.A., M.A.
and Bob Weir, B.Sc., B. Comm, CFA deduced that “[the]
cash equivalent of the price of the transaction thus is
$10.65 million, which yields a price per ounce of $33,
or 2.2% of our forecast long-term price of gold
($1,500/oz). This is a moderate price, as we believe
that junior gold explorers should be valued at least at
3% of the gold price, or $45/oz…there are reasons which
make us believe that the price is quite favourable for
Vatic.”

Leading analyst firm eResearch sees the moves as
favorable to Vatic and its shareholders as well. A
recent report stated that Vatic could be sitting on a
resource of at least 1.5 million ounces of gold because:
(1) the property is less than 50% explored; (2) the
unexplored areas exhibit gold mineralization that is
similar to mineralization in explored areas; and (3)
drilling at the explored veins has been insufficient. As
such, eResearch has issued a “Speculative Buy” rating
with a $0.48 price target for July 2013.

The management team has clearly done a stunning job at
setting-up Vatic with a strong portfolio in a short
period of time. There is no reason to believe that the
execs won’t continue to grow the portfolio of projects
as it develops its current properties. President Nasim
Tyab has more than two decades of experience in the
Canadian capital market and is currently the President
of Oracle Energy (TSX-Venture: OEC) as well as CEO of
privately-held Firebrand Resources. The rest of the
senior management team is well-rounded and highly
experienced, including CFO Tom Wilson with his 30 years
in corporate finance and securities compliance; Director
T. Barry Coughlan, with more than 25 years involved in
the financing of publicly traded companies; and Director
Matthew Mikulic, who is concurrently a Director of Lucky
Strike Resources Ltd. (TSX-Venture: LKY). These leaders’
association with other major and junior miners and
history of amalgamations should keep the astute investor
on alert for deals in the future.

It is also notable that the accumulation of projects has
not been done at the expense of shareholder value. The
company maintains a tight share structure with only 15.8
million shares outstanding (22.8 million fully diluted).
With the price of a share only costing 11.5 cents
currently, Vatic commands a market cap of under $2
million.

Technically
speaking, the VCV stock chart is making a “cup and
handle” pattern. A powerful bullish pattern, support is
established at 11 and 9.5 cents, with a resistance point
at 13.5 cents. The moving averages are in a prime
position with the 9 dma recently breaking up through
both the 50 and 200 day moving averages on increased
volume. The 50 dma is now trending upward and heading at
the 200 dma. An intersection of those is called a
“golden cross” because it is a bullish indication for
the chart. The cup and handle pattern has a depth of 6.5
cents (from bottom support at $0.07 to the top
resistance at $0.135) which would put a technical target
at 20 cents should the price per share break the top end
resistance.

A measure of momentum, the Relative Strength Index (RSI)
is hovering right around 50 as the stock has pulled-back
from the highs at $0.135. Holding over 50 is a key mark
for stocks that are uptrending as it shows momentum is
holding steady in the play and leaves it positioned for
another run. The Moving Average Convergence/Divergence (MACD),
an important gauge of trend has broken through zero,
called the “money line,” and is holding above that
measure. Much like the RSI holding over 50, the MACD
maintaining a position over 0 is key to the strength of
the trend remaining bullish.

In general, the chart has made a nice climb throughout
May and is now resting at a nice support level near
highs. Volume has slid back slightly indicating that
there is no selling pressure from the run. Technical
traders will be watching closely for volume to come back
into the play and add buy-side pressure for a possible
run at a new high. As always, this is merely our
interpretation of the chart and we encourage using
stop-loss practices should support levels be broken.

With support being indicated at around $0.11 and $0.095
a share, stop losses just below one of those levels,
depending on your risk tolerance may be wise moves to
protect against unwanted downside pressure. As we always
mention at this point, these are merely the
interpretations of AllPennyStocks.com. We encourage all
investors to do their own due diligence and consult with
a financial advisor prior to making any investment
decisions.

With a miniscule market cap and a robust portfolio, the
company could certainly be deemed as an undervalued
proposition at this point. The leadership is in place,
the capital structure is in order and their holdings are
in prolific areas for gold and silver. The fact that
many investors have overlooked quality opportunities
because of broader market unrest presents a chance to
capitalize on other’s hesitation. It is for these
reasons, as well as the ones mentioned above, that we at
AllPennyStocks.com have decided to turn our latest
Canadian corporate spotlight on Vatic Ventures Corp. (TSX-Venture:
VCV) and encourage our members to promptly begin their
due diligence and add it to their watchlists.

As always, more
information on Vatic Ventures Corp., (TSX-Venture:VCV) can be found by going to the full
Vatic Ventures Corp. profile
at AllPennyStocks.com or
by
clicking here.