Sarissa Resources Inc (SRSR)

[goforthebet]

for new investors an interesting read

Posted by: OntaREEo Date: Friday, June 06, 2008 12:46:00 AM
In reply to: None Post # of 21240

I've tried to clean it up:

Sarissa Resources – investment opportunity – status/summary:

1. Start-up junior mining company with 5 properties currently.
2. New management of stellar quality. Scott Keevil, new CEO (Dec 1, 2007), is from mining royalty, a third generation miner. His father is chairman at Teck Cominco (TCK), and as majority shareholder is valued at $11 billion. Teck Cominco has made clear they are interested in strategic joint ventures.
3. Scott is not paid a salary, but was given 30 million restricted shares (2 years until Nov 2009), and is very concerned about maintaining shareholder value, which was reiterated in the June 5 update. He is delivering on what he said he would do.
4. Recently hired geologist Dr. Cam Cheriton is a top name in his field with 50 years experience in the mining industry and adds instant credibility to Sarissa.
5. Scott’s first acquisition, Nemegosenda, had 50 year old Gulf study indicating niobium on the property. Two samples also indicated various REE (rare earth elements), but REE’s were not a big deal back then. They are now.
6. Sarissa commissioned independent geologist report from Hawk Engineering to verify Gulf study. Released in May, it confirmed at least $5 billion in niobium in one zone alone, and was described as a “world-class asset.”
7. Conversations with management unofficially indicate the Hawk report was understated. Privately, they believe Nemegosenda has $15 billion in niobium and tantalum (tantalum is always found with niobium). We are still not talking about (a) REE’s, (b) other properties, or (c) resource price increases in the next few years.
8. Sarissa is currently suffering from being a pinksheet stock, where pump and dump is rampant. The company is taking steps to uplist to an exchange where it will have more credibility, as well as access to many investors that can’t or won’t touch a pinky. Specifically, they have engaged an auditor for its financial statements. A press release could be coming soon, although the actual uplisting is likely 2-4 months away. Investor Relations has recently indicated that they will first uplist to the OTCBB exchange, and subsequently the TSX.V exchange.
9. Following the Hawk report, the next step is to drill core samples and have them tested for niobium, tantalum, the REE’s etc. The company has told shareholders that they will drill in both Zone D and the East Zone, which both have most promise. This is being set up, exact stage unknown, but test results should be in July-August. They first need to clear some roads for the drilling equipment, of which almost 2000 feet has already done as of June 5. The company also indicates a 580’ foot adit from 50 years ago is dry and in good condition to rehabilitate and will assist with this phase.
10. Ultimately, the company needs to document compliant reserves, known as NI43-101 standard. A second phase of drilling of core samples and testing may be required to ultimately meet this standard. At this point, it seems very possible that this second phase would also occur in 2008 before winter would suspend such operations. However, from people knowledgeable of the process, the first round of testing is most critical to shareholders and potential partners in proving the value of the reserves, and subsequent testing is more of a routine process.
11. Valuation estimates based on companies on similar tracks (Commerce Resources) indicate the company could be valued at 5-20% of NI43-101 reserves, and this is in a depressed stock price environment for these companies, a condition expected to reverse in the next couple of years. See Eric Hommelberg’s article (http://www.kitco.com/ind/Hommelberg/may282008.html).
12. Niobium is used in steel production. The REE’s are critical to many modern products, including batteries, headphones, disc drives, cell phones, etc. China currently controls most of these markets. More details on these elements and their uses are easily available on the web.
13. The value of the company once it has compliant reserves is dependent on the total resources available, the price of these elements, and the percentage put on these mining companies. Shareholders estimate significant price increases when the stock is uplisted, when the first core sample test results are available, and ultimately when the reserves are compliant. Also important would be the announcement of their extraction method.
14. Sarissa has four choices – (a) develop the mine themselves, (b) get bought out, (c) take on a partner or joint venture, or (d) a Chinese off take agreement. From conversations with the company, the last two are more likely, and are better for shareholder value. It has been suggested that Scott Keevil wants to make Sarissa his legacy and is not interested in selling out. A Chinese off take agreement is where the Chinese guarantee they will buy all of the product at market prices or at an agreed floor price, and put up the resources for Sarissa to extract the resources. The company is obviously developing these options but has not yet had to disclose them.
15. A June 3 PR may lead credence to last option: Sarissa has appointed seasoned mining industry veteran and project geologist, Alan A. Hawke B.Sc. M.Sc to its Board of Directors. Mr. Hawke, currently based in Tianjin, China, will offer his considerable experience to assist Sarissa in the ongoing exploration program of its Nemegosenda carbonatite deposit and extensive industry connections to source new and compelling exploration properties for the Company's property portfolio. In a 30 year career on three continents, Mr. Hawke has operated in key managerial roles -- encompassing mine development and construction management -- with prominent mining companies including eight years in Indonesia with PT Kelian Equatorial Mining.
16. The major risk to this company is a commodity collapse, which given the recent price increases, and the continued need for steel, batteries, and gadgets, is not very likely.
17. The company obviously believes the current share price “grossly undervalues” the company, and indicates that insiders have been buying the stock on the open market as well. While a pink sheet stock does not have to disclose more details, the company has indicated that approximately 450 million of the 740 million shares are “tight”. 264 million are restricted, and the rest being held by people close to the company that are holding for much higher values.
18. Estimates of the potential for this company vary widely, but once uplisted and initial tests are complete in 2008 the stock could conservatively reach $0.30 to $0.60. Once compliant reserves are established and the JV or method of financing extraction are complete, and evaluation of its other properties potential is known, the stock could trade between $1 and $5 in the 3-5 year time frame.
19. SRSR is currently trading around .03 per share. Incredibly, since the Hawk report came out, verifying the mineral resources, the stock has drifted lower 11 out of 12 days. This is primarily attributed to the pink stock environment, where first shorter term traders were selling on the news, and subsequently where market makers are walking the stock down. The June 5 update also makes clear that 154 million shares became unrestricted recently, which undoubtedly is applying some selling pressure.

BOTTOM LINE: A company with billions in reserves and stellar management very concerned about shareholder value suffering from pink sheet status is making all the right moves and is currently trading for pennies! Truly a retirement investment opportunity! Watch for uplisting, drilling test results, NI 43-101 compliance, extraction plans, and other positive management surprises!