Let everyone see this one:
Both Sides of the Double Crown Resources (DDCC) Coin Are Winners
Double Crown Resources Inc (OTCMKTS:DDCC) is a double-edged sword, and either side could bear nice fruit for investors.
By James E. Brumley
Nov 8, 2016 5:55:07 AM PS
Most young companies only have one way to make money, so when a startup has two clear revenue paths, it's an exciting prospect to say the least.
Double Crown Resources Inc (OTCMKTS:DDCC) is one of those double-barreled small caps. Not only is it a minerals/mining play, DDCC is also a transportation stock. Better still, the company is doing things the low-risk way.
Double Crown Resources' claim to fame is a shipping-crate system called Translock2 (or Translock Squared). It's ingenious. The design removes all the risks and hassle of shipping things like pellets or beans or salt - which are normally delivered in drybulk vessels - but still utilizes all the flexibility of intermodal containers.
In short, Translock2 a delivery and dispensing platform for drybulk goods. The idea is to convert intermodal containers (the big box containers you see sitting on top of flatbed trucks or train cars, or stacked by the hundreds on top of a ship) into something that also serves as a dispenser of things like sand or livestock feed. Rather than constantly aggregate or separate several times en route to the customer -- and lose material each time -- the shipping container is already pre-filled with the amount of ordered drybulk goods, and the container remains on-site as a dispenser until the final user empties it. It's a development worth noting, in that it explicitly circumvents the need for drybulk vessels, and turns intermodal container ships into dry cargo vessels.
It's also just a smart idea, and more important, Double Crown Resources has patented the idea.
To that end, DDCC has made it clear how it plans to drive revenue with its Translock2 system. It's not going to make them. It's going to license the platform out to companies that make such shipping equipment.
It's the right move in all ways. Making 20-foot container boxes is not only labor-intensive, it requires a lot of space as well as upfront capital. Conversely, licensing revenue is high-margin, easy money, and doesn't require any real upfront capital.
At stake is a piece of the $30 billion that's spent every year delivering drybulk goods.
As clever as Translock2 is, however, it's not the only thing Double Crown Resources Inc has going on. It's taken a back-seat in terms of garnering attention, but DDCC was and still is a mining stock. It does things differently on that front though.
Double Crown deserves lot of credit for making smart decisions. Unlike so many other miners who continued to dig all through the commodity glut - and incur expenses - without really knowing if they would be able to sell what they dug up, DDCC won purchase commitments first before committing to produce anything. Case in point: In November of last year, the company secured a five-year industrial mineral (barite) deal that could be worth up to $20 million in revenue. Also in November of last year the company inked a copper supply deal that could be worth up to $40 million worth of revenue. Since then, Double Crown has sourced and started to deliver those goods.
With guaranteed business waiting for it, Double Crown can now justify tapping into established supply sources. It's a smart, low-risk way of being in the business.
It's not just a reactionary business model though. The company also identifies future sources of resources it might sell.
In October, instance, DDCC announced it had acquired the rights to a major gold and silver mining operation in the Puebla region of Mexico. In short, the company will be able to deliver even more gold to contracted buyer that materialized in January, and accelerate the deal's revenue generation.
As the company also said in the press release, those mining/extraction rights are something "Double Crown intends to use for the fulfillment of multiple high value supply projects over the next several years."
In other words, the Puebla rights are something Double Crown Resources can keep in its back pocket, ready to tap at a moment's notice for when the next off-take agreement materializes.
It really is one of the market's most compelling yet most understated opportunities, with that bullish flames being fanned by not only a measurable even if not red-hot economic growth pace as well as a rebound in commodity prices..... and demand. Throw in the fact that the Baltic Dry Index continues to rise, subsequently pushing shipping costs higher for commodity buyers and sellers, and the need for cost-control measures like the one Translock2 can offer becomes just that more valuable. Look for DDCC to become something bigger than most people might expect it to become.
For more on Double Crown Resources, visit the company website here.
James E. Brumley is a paid contributor of the SmallCap Network. James E. Brumley's personal holdings should be disclosed above. You can also view SmallCap Network's complete disclaimer and disclosure.
