New Colombia Resources Inc (OTCMKTS:NEWC) just picked up a close to 20% spike on the back of some news detailing the companies efforts in Colombia. This is a company that we have looked at a few times here at Insider Financial, and in light of the recent update, we're going to take another look, in an attempt to figure out if, and how, this changes our thesis on the stock.So, here goes.For those new to the company, it is a dual play – cannabis and mining. The company is, at core, a mining play, with operations based in Colombia. It's got a coking coal operation, for which (and as we reported earlier this year) there is a $90 million contract in place that will see it deliver resource to China throughout 2017. It's also got a rock crushing operation, which (again, as we reported earlier this year) just picked up the relevant permitting under which management can now give the green light for operational go-ahead.The cannabis venture is called Sannabis, and it's a joint venture (again based in Colombia) that is currently a sort of health and wellness venture rooted in skincare products, that sort of thing. The forward plans for the Sannabis brand look to be a bit more ambitious than skincare, however, with recent communication putting forward data that drives towards therapies for things like cancer, inflammatory conditions, depression – all those big names.Looking specifically at the latest update, New Colombia details a response from the Colombian government (specifically, an arm of the government called Agencia Nacional de Mineria (ANM)) suggesting it will accept terms on the company's application for an additional 489 hectares of premium metallurgical coal reserves. This sentence…
This notice advises the company that the requested area will be reduced
… adds a bit of ambiguity to the release (by how much will the application be reduced, is it even referring to land area, that sort of thing), but in all honesty, we're not too concerned about the release. An extra 500 hectares is nice, and adds to the already contracted 4000 hectares in place, but it's the second part of the release we're really interested in.Why?Because the contract discussion leads into a note from management regarding financials, and specifically, their filing with the SEC. This company is way behind on its filings, and this has been a red flag (understandably) for shareholders/potential shareholders. In the latest release, John Campo, NEWC President, basically says that the delay is rooted in the auditing of the financials before they hit press, and that the auditors are shuffling items back and forth between themselves and the company that need clarifying before the submission can take place.Here's a statement from Campo:
"I share my shareholder's frustration, but at this point I have to let the auditors do their job. All I can do is give them what they ask for, which I have. I was told for the past two weeks we would be done the following week."
So this tells us that it should literally be any day now that the auditing is complete. A week or two at the outside. The 10K filing is important, from a credibility perspective, but it's also important because it opens the floodgates for a host of other updates, each of which will be taken far more seriously when backed up by an audited 10K than they would if they hit press pre-filing. Coal supply contracts, acquisitions, a $200 million LOI for a power plant, the launch of Sannabis Non-THC products in the USA; all this and more should hit press almost as soon as the filing is in, and as such, the next quarter or two have the potential to be game changers for this company and its shareholders.We have said it in each of our previous coverages of this company – there is risk here. Management promising filings is very different from a company actually filing something with the SEC, and until we see the 10K in black and white, nothing can be said for certain. From an objective viewpoint, however, it looks as though this company, and Campo in particular, is trying to be as forthcoming as possible, and this helps to mitigate the red flag nature of the late filings.As a closing note – New Colombia referenced an article we published as part of its latest press release. Here's a snippet pulled from the release:"For a concise independent analysis of New Colombia Resources Inc. visit http://insiderfinancial.com/new-colombia-resources-inc-otcmktsnewc-continues-to-run-up-on-two-pronged-strategy/118133/"It's great to see the company feels our grasp of its operations is accurate, but it's important that we point out that we aren’t affiliated with this one in any way.We will be updating our subscribers as soon as we know more. For the latest updates on NEWC, sign up below!Disclosure: We have no position in NEWC and have not been compensated for this article.
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