"In December 2011, Teryl sold its 20% interest in the Gil Project in Fairbanks, Alaska to Kinross Gold for $15 million and royalty rights, including a $2.5 million upfront payment."
V.TRC PROFILE
A look into the past prices of gold shows that there are only rare occasions which investors in the precious, yellow weren’t handsomely rewarded in the relatively short term. After all, there haven’t been many times that gold prices have sustained much of a downtrend, especially since ringing-in the 21st century. But, rarely do investors want to look backward when it comes to gold. Generally speaking, it’s all about the future and that’s what spikes curiosity about where metals of all sorts will be going.
Investors could walk to Wall Street or Bay Street and pick ten analysts only to get ten different predictions about where gold prices will be at the end of 2012 following a more than decade-long run that sent gold to record highs. The safe bet to place, though, is that miners will still be able to operate profitably whether bullion prices gallop through $2,000 (as some experts predict) or retrace to $1,400 (as other experts believe). Fact is that at those prices, there is still a great opportunity for miners to run profitable operations.
Moreover, it does not matter what gold does in the near term when it comes to long-term investing in commodities or in developmental explorers. Gold has held its appeal since the days of ancient Egypt and will continue to do so for many years to come as long as it remains a rare commodity.
From an investing standpoint, gold has been long-heralded as the safe haven against riskier equities. The markets collapsing four years ago led to a record bullion price. Its high before this latest peak was in 1980, during the height of the Cold War when inflation was zooming to its highest levels ever. In a nutshell, gold is a prince when times are good, but king when times are tough.
There is some credence to the world standing on firmer ground towards economic recovery today as Greece’s debt problems are under wraps for the moment and economic data from the U.S. continues to outperform. But, potentially ballooning inflation is still a major concern with interest rates at historic lows and QE3 always a possibility with any sign of loss of economic stability. Inflation was ringing-in at a scorching 3.9% in the third quarter of 2011 and, even just because it has dropped mildly, doesn’t mean it’s as fine as politicians want everyone to believe.
Gold will be fine all on its own, but any number of catalysts that are hanging in the balance can light a fuse under it and send it soaring again.
Industry titans should continue to trek higher with gold, but their upside percentage is certainly limited by their high share prices, and really only serve to diversify a broad portfolio. When the markets were getting crippled four years ago, the majors had considerably more headroom, but as the markets continue to recover and push towards old highs, more money is flowing back into the junior miners, creating a lot of liquidity and casting a light on well-positioned developmental firms like dually-listed Teryl Resources Corporation (TSX-Venture:TRC) (OTCBB:TRYLF). The company is headquartered in the mining heartland of North America, Vancouver, British Columbia, and has ownership in a portfolio of projects located in prolific gold regions of Canada and the United States that are associated with some of the biggest names in the metal mining business.
Over the last few years, Teryl has focused its main exploration and development work on the Gil claims, a gold prospect located in the Fairbanks Mining District, Alaska. Gold is Alaska’s most valuable non-energy commodity with nearly 40 million ounces of gold coming from its ground to date. Late in 2011, the company made a savvy move to sell its 20 percent working interest in the 237 Gil claims to industry juggernaut Kinross Gold Corp. (TSX:K) (NYSE:KGC) while keeping a 1% net smelter return rate on all production up to $15 million. At the $15 million mark, the royalty is reduced to 0.5%. At closing, Kinross paid Teryl $2.5 million as an advance payment of the production royalty. An additional advance payment of royalty of $1.5 million will also be paid to Teryl upon commencement of commercial production from a mine constructed on the property. While those Gil claims have been sold, the company still holds more property in the area.
In fact, Teryl has several gold prospects in Alaska near Kinross’ Fort Knox Mine (with more than 800,000 ounces of gold reserves); a 100% interest in the Westridge property (located just down the road from the Fort Knox mine); and a 50% option on the Fish Creek property, adjacent to the Gil property. Teryl also owns a 10% net profit interest in the Stepovich claims, near the Fort Knox deposit; and a 30% interest and 10% net profit royalty in a silver property located in Northern B.C. adjacent to Silvercorp's (TSX:SVM) (NYSE:SVM) silver lead zinc discovery. Silvercorp is slated to begin production this year on their property which has 35 million ounces of silver indicated and inferred. Teryl also has a small revenue interest in three producing oil and gas wells in Texas with Anadarko Petroleum as the operator. The oil and gas interests generate about $2,000.00 a month for Teryl.
There are a few key elements here that must not go unaddressed. For starters, Teryl is well-funded. They have a balance sheet that shows cash on hand that is virtually unparalleled by peers that are always on the hunt for cash. There is absolutely no need for dilution and the company’s revenue stream looks to only grow wider as time passes. That’s a true anomaly in the junior miner space that bears recognition.
Second, Teryl has a penchant for striking deals that can yield long-term revenue streams as indicated by the claims mentioned above. It’s a prescient business move that not many juniors can make happen simply because they don’t have the properties to justify the agreements. Their interest in the property located next to Silvercorp’s massive silver project is one to keep a close eye upon. Data shows that the mineralization from Silvercorp’s land looks to be running right into the heart of Teryl’s. If Teryl taps the ground and confirms that strong silver deposits are located there, another healthy royalty deal or perhaps even an acquisition offer could be in the making in the near future as Silvercorp is already heading into production on the property, so expanding and exploring the adjacent land could be a win-win for both organizations.
Teryl has also turned its attention towards other holdings in the Fairbanks Mining District and applied for an exploration program permit to drill five targets on the road accessible Westridge property, which is about 2 miles from the True North Mine, which has produced approximately 450,000 ounces of gold. The 2012 Westridge Exploration Program is designed to test both the placer and lode targets located within the claim block. Previous lode exploration has identified 5 targets within the Westridge Area.
Several of the targets have been explored to limited degrees with results showing grades up to 1.6 g/t gold across 10 meters. Creeks in the area such as Dome, Fox, Steamboat, and Flume were mined extensively for placer gold. Limited past exploration in the 1990's and 2003 show shear and intrusive hosted gold mineralization at the Old Glory Prospect, Black Dome Prospect, East Anomaly, West Anomaly and the Moose Creek Anomaly. The company expects to complete two phases of exploration on the property which will cost approximately $200,000. Money from the Gil sale is in corporate coffers, so no additional funding is required.
The Teryl management team has a rich history of mining experience as well as finance and regulatory compliance. CEO, President and Director John Robertson has held those positions since 1982 at Teryl. He has an extensive background in the mining sector, including serving as president of Linux Gold Corp., Teryl’s JV partner at Fish Creek. Director Susanne Robertson has a resume that includes various positions at the Royal Bank of Canada (TSX:RY) and being the owner of SMR Investments, which has expertise in raising funds for public companies.
Technically speaking, the TRC chart has the look of a solid bottom play. The stock price moves easily, surging to and from the recent levels of 6 cents up to 10 cents and 8.5 cents on two occasions already this year before settling back down to a firm support in the area of 6 cents only to rise again. Resistance is scattered, but the price per share (pps) only meets some secondary resistance on rises to 8.5 with some stronger resistance at old highs of 10 cents, leaving a great deal of headroom immediately with a support level in close proximity. Bottom support comes in at 5.5 cents, a price that the stock has not closed below since the markets crashed in late 2008 (where it rebounded all the way up to 39 cents). Additionally, the pps is again above the 50 day moving average (which is trending upward) and challenging the 200 dma. A break of the 200 could signal an overall reversal in the chart into bull-mode.
The Moving Average Convergence/Divergence (MACD), an indicator of trend, has been uptrending since October of 2011, creating a positive divergence with the price per share. Moreover, the MACD has broken through zero (called “the money line”) and is holding above that key level, another sign of overall bullishness in a chart.
Volume-based indicators that track the flow of money are steadily trending upward, showing that cash is primarily coming into the stock, even when the price dips. The Relative Strength Index (RSI), a measure of momentum in a stock chart, has made a move again and is heading upward and now breaking through 50. This movement falls right in line with most of the indicators that are showing overall strength in the TRC chart. Given a catalyst such as a strong press release or an overall increase in volume, this stock could really head higher in a short time span as volume averaged over the last three months at just under 25,000 shares a day.
With support being indicated at around $0.06 a share, stop losses just below that level may be wise moves to protect against unwanted downside pressure. As we always mention at this point, these are merely the interpretations of AllPennyStocks.com. We encourage all investors to do their own due diligence and consult with a financial advisor prior to making any investment decisions.
The company’s share structure is intact with only 72 million shares outstanding. The 7.5 cent price tag on a share currently only gives Teryl a small market cap of $5.5 million. As mentioned earlier, the key to any investment is the headroom for growth with the fundamentals to support the growth. Teryl has the key ingredients for expansion in valuation with a portfolio of properties that dwarfs other companies its size and agreements in place to continue to bring revenue the company’s way for many years to support further exploration on its projects. It is for these reasons, as well as the ones listed above, that we have decided to shine our next corporate spotlight on Teryl Resources Corporation (TSX-Venture:TRC) (OTCBB:TRYLF) and encourage our members to begin their due diligence and promptly add it to their watchlists.
As always, more information on Teryl Resources Corp., (TSX-Venture:TRC) (OTCBB:TRYLF) can be found by going to the full Teryl Resources Corp. profile at AllPennyStocks.com or by clicking here.
INVESTMENT HIGHLIGHTS
Strong Portfolio. Teryl Resources Corp. owns a broad portfolio of holdings consisting of five gold properties located in Alaska and British Columbia. The company also has a small revenue interest in three producing oil and gas wells in Texas and another energy property in Kentucky.
Strong Books. In addition to the $2.5 million already received, Teryl holds royalty rights on several properties, has another payment scheduled once Kinross begins production at the Gil Project and is generating additional revenue from its Texas oil and gas holdings.
New Drill Program. With cash in hand from the Gil Project sale, Teryl has applied for permitting to commence a new drill program on its Westridge property, located only two miles from the True North Mine which has produced approximately 450,000 ounces of gold.
Experienced Management. Led by John Robertson as CEO, President and Director, the Teryl executive team has a wealth of experience in mining, finance, and regulatory compliance.
OVERVIEW
Teryl Resources Corp. has several gold prospects in Alaska near the Kinross Fort Knox Mine, a 100% interest in the Westridge property (located near the Fort Knox mine); a 50% option on the Fish Creek property, adjacent to the Gil property. Teryl retains a ½ of 1% royalty until $15 million is paid in payments from the Gil property in Fairbanks, Alaska, to date $2.5 million dollars has been received; a 10% net profit interest in the Stepovich claims, near the Fort Knox deposit; and a 40% interest in a silver property located in Northern B.C. adjacent to Silvercorp's silver lead zinc discovery. Teryl also has a small revenue interest in three producing oil and gas wells in Texas with Anadarko Petroleum as the operator.
AllPennyStocks.com has been compensated eight thousand five hundred dollars by the Company for its efforts in presenting the V.TRC profile on its web site and distributing it to its database of subscribers as well as other services. AllPennyStocks.com may decide to purchase or sell shares on a voluntary basis in the open market before, during or after the profiling period of this report.
http://www.allpennystocks.com/aps_ca/company_spotlights/archives/trc.asp
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