Every smart investor diversifies. Take a good look at Warren Buffett or Carl Icahn, two of the most closely followed investors in the world. It’s not a whole lot different for companies or small investors. A wide-spread portfolio of holdings hedges risks for other investments. Agree with the concept or not, when combined with technical charts, the concepts seem to find support and resistance levels as to the valuation of a company.
Developmental resource company Gossan Resources Limited (TSX-Venture:GSS) is built upon the principles of diversification. A mineral exploration firm, Gossan holds interests in seven different operations in its portfolio. The majority are mineral exploration-based, but not all fall under the same umbrella. Keeping its focus in Canada, the Winnipeg-based company holds properties in Manitoba and northwestern Ontario.
The projects are diversified including properties holding gold, platinum group and base metals, as well as the specialty and minor metals, vanadium, titanium, tantalum, lithium, and chromium. The Company also has a large deposit of magnesium-rich dolomite, the worldwide rights to the Zuliani magnesium production process, and a silica sand deposit.
Interesting enough, though Gossan also holds a 47% equity investment in The Claims Network, a web-based technology company engaged in providing the Property and Causality Insurance Industry with loss assessment valuations. In today’s economic climate, The Claims Network rings a bell of value simply because of its importance in struggling economies.
Gossan announced Friday that it has received an offer for the sale of its entire 66.3% equity interest in The Claims Network Inc. for a net sale price of $1.4 million. In a side note, prior to closing, which is expected in early-November, TCN has the right, within the terms of the offer, to declare a dividend whereby Gossan could receive up to $115,030. Of course, any deal of this nature is subject to regulatory and proper approvals.
Technically speaking, Gossan poses an interesting look as a stock chart. While depreciating in value since March 2011 for a price per share of $0.30, the stock is coming near a trendline that offers support from early in 2009 when the stock price hit a nickel.
A high was made of 27 cents in October 2009 coming off that bottom, but it was topped again by a high of 30 cents in 2011, while higher lows of $0.09 in 2010 were made in the interim.
Price per share support comes into play at current levels which further supports the concept that investors may be seeing to support the trendline, further making the chart more interesting.
As market conditions continue to worsen with the major indices fighting to gain any traction, juniors may present value propositions on many different levels.
A well-diversified organization certainly is the topic of conversation amongst the most elite of investors, but is also valuable no matter how much an individual has to put into a public company.
Combining individual knowledge with technical charts that show similar strategies and inevitably perpetuate the cycle of technical trading is a trait that slips past many that don’t ingest the whole gamut of trading or investments, but certainly should be explored. As with every company, proper due diligence is always encouraged.
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