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This is a bit of a long story- one that appears to be headed for a very happy ending. Clean Coal Technologies (CCTC) is a penny stock investors have been hanging their hats on for quite a few years.
It's a 5 cent story with pretty dramatic upside- the exact kind of story people like you and I love to find for a mere nickel. From 5 cents there's not all that much downside, but if the dream becomes reality, the score of a lifetime.
This past March this little stock appreciated 300% over the course of about 10 days when the market learned a gigantic diversified conglomerate (Archean Group) with commodity based operations in Indonesia pledged to invest $2 million towards building a pilot plant to prove CCTC concept is sound.
The stock did a round trip back to the $.04 to $.05 level as investors awaited the final news on how and where that capital would be deployed.
Today, after the market closed, we learned exactly who will get it and how it will be spent. This could lead to another 300% rally that might just stick this time. This is the news CCTC's audience has been waiting for.
Let's start with a little background, and we'll go from there.
I've spent the last couple hours reading about coal, and I now know more than I ever thought I'd need to know, and probably a lot less than I should.
Coal is used to power a lot of US utilities, but so is our very cheap natural gas. Coal pollution is a problem in the US, but a far, far bigger problem in the Far East- particularly China and Indonesia, where coal is the primary source of fuel for power plants.
As it turns out, coal is very "wet" and porous. It burns very well, but the wet and porous low grade coals give off huge levels of pollution that have blackened the skies all over the Far East, and created a horridly toxic environment.
Enter Clean Coal Technologies (CCTC)- a company that has captured the imagination of penny stock investors. CCTC claims to have a solution to the problem which has mind boggling commercial implications.
CCTC has a proprietary process for drying out or "cleaning" coal before it's sent to a power plant to generate electrical energy. Using a combination of pressure and heat, CCTC dries out the coal and removes the toxic chemicals, which can then be transported out and actually sold for other purposes.
As you can see from the diagram, the Exhaust Gas Collection and Separation happens before the coal is moved to the power plant. There are other companies offering to clean pre burned coal, but each of them must pulverize the stuff to dust, and it becomes un burnable as dust. It must be restored to its natural porous rock state.
Penny stock investors have been willing to bet this might just work. CCTC has been working diligently to get pilot programs going in Indonesia and Mongolia- two places where a lot of super cheap low grade coal is burned.
Today, after the market closed, the company made a critical announcement that should crank up the buzz in a major way from the Penny Stock community.
CCTC announced how it is going to spend the $2 million that was pledged by Archean Group in March. CCTC has entered into an EPC Contract (Engineering, Procurement, and Construction) contract with US based engineering giant SAIC- a Fortune 500 company that generates over $10 billion in annual sales.
SAIC has been contracted to build a "proof of concept" plant in Oklahoma that will be 1/10th the size of a normal plant, and be used to demonstrate CCTC's technology works.
So, while this little stock has certainly had its ups and downs, and the management needed to undergo and major turnover, it would appear CCTC is finally going to have the opportunity to prove this technology works. Without having some merit, it's highly doubtful Archean Group would be ponying up $2 million to build a pilot plant.
From $.05, I'll bet investors are willing to pounce on this stock now that there's some concrete evidence huge companies have looked at their technology, and are willing to bet on it.
Where to from here? Read on..........
To get some reasonable expectation of where we might go, let's look at March's chart when the $2 million funding was announced with Archean Group.
As you can see from the chart, this past March when CCTC announced it had been pledged $2 million to start moving forward on proving this Clean Coal technology works, the stock went berserk.
In a matter of a few days, the stock climbed from $.04 to a high of $.16 and traded 20 million shares in one day. If you owned it at $.04, and sold on the spike, you quadrupled your money.
Even when it pulled back, it traded sideways at about $.08 for over a month- if you owned it at $.04 you could doubled your money and had plenty of time to get out.
I can't say for sure where this stock will go over the next few days after this monster piece of news, but it seems to me it's better than it was in March. We now have SAIC involved, and that's a highly respected Fortune 500 company.
I've looked at this company in the past, and held off on writing about it. I was waiting for some sort of tangible break through. The breakthrough as a $.05 stock has arrived.
The next breakthrough will be pilot plant operations, and the company might have to prove itself again- however, this might happen when the stock is $.50- who knows? I just know with $2 million from Archean Group funding and the EPC contract with SAIC (NYSE: SAI), this little stock takes on a whole new life. There's already a heavily embedded audience as the stock trades 1.5 million shares on average, so their response might just send this stock rocketing up the charts.
The hard part is figuring out where it will open tomorrow. I suspect it's going back to the $.16 level from March, so anything in the $.10 range offers a nice short term gain. Set your SSL (suggested stop loss) at $.04- but I don't believe it will go there in the short term. Accumulate up to $.10 for a move to $.16 to $.20.
A reminder: Catch me live on TV every Monday from 12 to 2PM eastern.