New Colombia Resources Inc (OTCMKTS:NEWC) Is Worth Far More Than Markets Currently Give It Credit For

We have looked at New Colombia Resources Inc (OTCMKTS:NEWC) a few times over the last couple of months, and every time we highlight the company, it gains close to double digit percentage points within a week. Yes, the company is benefiting from the run up in the cannabis space ahead of the California and Nevada legalization votes, with its link to medicinal marijuana driving this run, but New Colombia also has a very strong coal based site to its operations, and there is probably (almost certainly, at this point) more value in its coal activity than there is in its cannabis activity.On October 26, the company gave us an update relating to its mining operations, and on both the rock and coal fronts, there looks to be substantial near-term activity on the cards – activity that should feed into a valuation increase that is completely separate to the almost inevitable increase we are likely to see as the situation in the marijuana space plays out.That’s two-pronged growth, in two very lucrative industries.So what did the latest mining update tell us?Well, the company is working with the government in Colombia to get its operations underway. An entity called Agencia Nacional de Mineria (ANM) contacted New Colombia and requested a meeting, at which the former requested that the latter expedite an application for a permit for rock mining operations. With a permit for coal mining already in place, as soon as this rock mining permit comes through, the company is set to commence action on both fronts, rock and coal.To summarize the fundamental environment that is driving these developments, the industry for coking coal has contracted from a supply perspective as late. It is getting more and more difficult to pick up permits in the US for environmental and social reasons, and we're seeing a similar situation in China. Demand has not decreased (despite suggestions that a shift to cleaner energy is already underway), and this supply contraction has – naturally – led to the price gains. Government agencies such as the ANM in Colombia are trying to capitalize on this supply contraction by motivating companies in their own jurisdictions to meet the demand.New Colombia is one such company.Rock mining (basically just crushing rock for sale to construction companies) is going to provide bread and butter revenues for the company, while it capitalizes on the extremely high price of coking coal, which has risen from $70 per ton to $245 per ton this year alone.The importance of this update cannot be understated. If New Colombia can execute on its coal mining operations strategy, it is going to be outputting more than 30,000 tons per month raw product. At current prices, this would generate revenues of more than $7 million monthly. To add a little bit of perspective to that, New Colombia’s current entire market capitalization comes in at a little over $8 million.To add to the attraction, the company just extinguished all convertible debt, and all remaining shares held in reserve for the conversion of the debt have been returned to treasury.The bottom line here is that New Colombia is a mining company that is just about to complete its permitting for operations that are going to bring in pretty much the equivalent of its market capitalization in revenues monthly. It has the support of its local government, the benefit of a supply contraction in its target commodity and – as a kicker – a young but robust and growing marijuana arm.Capital raises may provide some degree of near term value hit, as the company raises money to fund its operations and meet its marijuana industry growth expectations; that's really our only concern right now, however.All said, it’s tough to see how New Colombia cannot gain strength from its current price.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.