KAT Exploration Inc (KATX)

[Rick-UK]

"is it possible that this stock goes to a dollar in the next months?"

Good question!


1. VALE and Lucky

Junior exploration companies are worth pretty much nothing at all until they find file a claim, analyse what’s in the ground and file their NI 43-101 to prove it. Most exploration companies would be over the moon with just one good claim, but KAT has six! Not only that, but early sample analysis from Handcamp suggests KAT is sitting on an incredible amount of gold and recent activity around Lucky not only show the same thing for copper, but also hint strongly at a JV partnership with a world leading mining company VALE, who have staked massive claims around Lucky at a cost of roughly $1m in the first year. VALE would not be willing to spend this money if they weren’t seriously excited about Lucky, and Ken Stead “cannot comment” on whether he’s in discussions with them, and we all know what that means… KAT Exploration has something out of the ordinary and VALE want it! They have already mopped up Cornerstone on the edge of this area, and that I believe is just "for completeness". The entire reason they are there at all is because of what is in the ground at Lucky South.




2. Handcamp and Teck

Handcamp is a very special and unique type of gold deposit known as a "Felsic" VMS deposit. World wide there are only something like 800 VMS deposits and only the best of these are "Felsic". According to the USGS, Handcamp is the highest grade VMS gold site in all of Newfoundland. Surface rock and soil samples show a level of gold FAR higher than any of the surrounding mining sites owned by other companies and to find these levels of gold in just the surface rocks implies FAR more gold in deeper deposits.

The full soil sample analyses results are now back from the independent lab and have been digitally plotted onto a map which can be seen here. These results are very exciting as they show up to 158g/t of gold as well as extensive deposits of zinc and copper. To put this in perspective, even 3g/t is considered a good find.

KAT Exploration has recently added a further 5,311 acres to its Handcamp claim. A test drilling programme IS NOW STARTED and is being done by a well respected multinational drilling company called Cabo Drilling - http://www.cabo.ca/. The drilling is likely to take 3 to 4 weeks to complete, although updates as to progress during this period are very likely.

According to CEO Ken Stead: “[Handcamp] is just south of the new gold processing facility which just opened this year by Anaconda Mining. That in itself is just south of what used to be the Nugget Pond Gold Mine, which is now being operated by Crew Gold and then there’s the Duck Pond Deposit, which is being mined as a massive sulphide deposit, and is a bit to the south also.” Handcamp’s situation so close to existing gold mines and Anaconda Mining’s gold processing facility could make a potential JV with Anaconda a good prospect for both companies, but Teck looks like a very interesting potential partner for Handcamp and they have certainly got plenty of cash... $835m net profits in Q1 2010 alone!

Why would they be good for us as a partner? Because they have Duck Pond, which is just down the road from Handcamp and is already mining copper, zinc, gold and silver so all of the infrastructure is in place for the processing and onward transportation of raw minerals as they are extracted from the ground. This is not just my opinion but Ken Stead's too, as Birdman Bob pointed out a while back and again here - http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49820398&txt2find=teck

What is also of interest is the fact that Handcamp lies absolutely dead central within an area marked out by the Canadian Government as being of special interest due to its underlying geology, and was given the most detailed attention in the entirety of all Canada in the air survey carried out on behalf of the Canadian Govt (fig1 and fig2 were given much more detailed surveys than remainder of Newfoundland and the entirety of the rest of Canada bar a couple of other places)...




3. Example - US Gold

One year ago an exploration company called US Gold (UXG) were in a similar position to where KAT is now, with a similar share structure. They were trading at around 0.30 and were waiting on the results of test drilling so they could file their 43-101. Within weeks of filing their 43-101 the PPS went from 0.30 to $1.20 and a few months later hit $3.00. UXG’s best results were 2.9 g/t Au. By comparison, KAT’s initial sample analysis indicates 158g/t Au, 94g/t Au and 82g/t Au. Not only this, but as well as Handcamp, KAT has Lucky and four other claims as well. If UXG can hit $3.50 there is absolutely no reason why KAT cannot hit $4 OR MORE if we get a DOUBLE announcement – a 43-101 for Handcamp and a JV with VALE for Lucky.

It's very common for these type of companies to go from a few cents to multiple dollars on great drill results alone. This is because the NI 43-101 basically confirms exactly how much gold is in the ground and how much it's worth. So there’s no need to actually be mining it to make this stock go up, once people know exactly what they are sitting on and what it's worth, this will shoot up accordingly to reflect that. And that is just Handcamp!


4. KATX assets and corporate structure

We have seven claim areas, two of which look to have massive amounts of gold, three of which look to have massive amounts of copper and REEs and at least one appears to have massive amounts of silver. So when you factor in all of the properties and the potential JV with VALE, this company "could" be worth quite a bunch of money. I expect KATX to continue to rise until the test drill program is complete and the NI 43-101 compliant report is filed for Handcamp, and a JV partnership is announced. Once these occur then the sky is the limit.

KATX has a relatively small O/S and a very tight float for a junior exploration company. KATX has the funding and the CEO has stated that dilution in the future will only occur if there’s a positive reason to do so, ie a JV partnership. In a recent statement, the CEO has also said that he intends to take either KAT Exploration itself or possibly a spin off company containing certain of the claim areas off pinksheets and onto another exchange or market.

We do not as yet have a timescale for this from Ken, but the assumption has to be “within the next few days, weeks or at most months”, especially when you consider the recent purchase of BVIG - an empty, non trading OTC shell company ripe for a reverse merger or spin off - and the appointment of a prestigious Wall Street law firm that specialises in precisely this thing.


5. My expectations within next three months

1. Drilling on Handcamp completed and a very positive NI 43-101 compliant report filed
2. JV announced with Teck on Handcamp claim
3. Announcement of reverse merger and/or spin off of one or multiple properties into BVIG with shareholders carefully looked after to ensure value retained in their shareholdings
4. JV announced with VALE Inco on Lucky and Rusty Ridge claims

Of course that's all speculation on my part, BUT there is a lot of hard evidence and stacks and stacks of secondary evidence that one can add up. If even half of the above hits then please expect a multiple dollars PPS!


6. Further references

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49245962
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=49103668
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46255277