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Trip report to Yale Resources (V.YLL) La Verde Project
Last week I spent a day at the La Verde Project, in Sonora, Mx. The property was acquired earlier this year by V.YLL - Yale Resources for US $1.6 Million in staged payments, and then subsequently additional holdings in the surrounding area were staked to increase the total land package.
http://www.yaleresources.com/s.....A-STATE...
This is the 4th project within the suite of properties controlled by Yale, and IMO it is the most prospective. There is widespread alteration throughout the property area, and numerous surface showings. The potential here is for a large tonnage deposit (or several deposits) that can create critical mass necessary to put Yale on the radar of serious mineral resources. That is probably the most important consideration for a project generator like YLL. Large discoveries tend to support large asset value and market caps for juniors. While the silver properties in Zacatecas have yielded some high grade results, they are not likely to develop into big scale development. Urique, the JV with EXM.V is an intriguing prospect with excellent potential, but it will probably amount to smaller, high grade deposits.
Within the La Verde property package, there are several past producing mines. However these mines are pretty much narrow access workings that produced very limited volumes of high grade ore. The reason is that they developed at the turn of the last century and only the very highest grade copper mineralization would have been economic to extract and transport to a mill. In fact, the dumps of 'waste rock' that surround these old mine workings are most likely economic feedstock for a producing operation today, and tens of thousands of tonnes of this mineralization is sitting on surface if the company chooses to commence small, start-up mining to process it.
Road access to the property is served by paved highway from the main city of Hermasillo, until the last few kilometers where a gravel road extends right to the old workings. Power infrastructure is in close proximity. Water access is limited, but Mexican mining law dictates that mines are a priority development and hence local land owners are compelled to sell water rights at reasonable prices to mine operators, so it will not present a major hurdle.
The most significant of the historic workings was the La Verde Grande, where 2 adits extend on either side of a small valley into the adjacent hillsides. These tunnels penetrate for just limited distances underground, and a second lower level has also been developed with shaft access. A third adit is also open a few metres below, and this just extends a few metres in, with a side tunnel halfway along.
The company has untaken sampling work every five meters in these tunnels, cutting channels across the open mineralized face from the top to the bottom of the tunnel walls. There was obvious secondary copper mineralization exposed throughout the interior of the workings, and I toured the entire area except in a couple of small caves where hundreds of bats flying within the narrow area made it prohibitive to enter.
The tunnels appear to have been developed along old fault structures, which probably governed the emplacement of the highest grade copper. Historic data indicates that signficant lead values were also encountered, along with some silver.
Once the company has completed mapping and sampling of the underground workings, they plan to do a drill program to outline the entire deposit and prove it up to NI43-101 resource standards. By my own estimates, I would imagine a relatively low risk confirmation drill program could define an area of about 30m depth, 50m extending into either hillside, and perhaps 80m in mineralized width of skarn ore. That would suggest about 750,000 tonnes of medium grading ore that can be easily developed and would probably be ideal for processing in a heap leach operation and perhaps an electro-winning cathode copper process. Even average grades of 1-2% Cu could be economic for that.
The upside is that the system may extend to greater depths and perhaps even swell across a much wider area of mineralization. I would estimate that at least 1 million tonnes, and preferably 5 million tonnes of ore would be needed to contemplate any sort of development decision at this time. Just investing in infrastructure and a processing plant would require several years of mine life for capital return.
The issue is more manageable if the company can successfully establish other mines on the property that could all produce ore for processing at a central plant, as the historic miners did. Further into the property, the El Picacho workings are noted for a very small tonnage of higher grade copper mineralization that was extracted from an open pit. No previous drilling has been completed there, but there are some veins and stockwork zones that appear to continue below the open workings, which could represent a new discovery area.
Further up a steep hillside from El Picacho, the La Tescalana Mine sits along a narrow ridge. Again, this was a very low volume mine that was probably extremely high grade, as it would not be worth the long climb and difficult access to extract lower grade material from that spot. Also, there is almost no waste rock at surface so all of the ore that was extracted from the workings was probably rich in copper and shipped to the mill for processing by burrow in small loads.
La Tescalana workings dipped steeply into the ridge, and line up roughly with La Verde Grande, and also with 3 other small mines further to the south. The linear relationship of all these old mines, plus the apparent structural controls on the mineralization, would suggest that they are all just the near surface expressions of a much larger system to depth.
Skarn ore is created when an intrusive reacts with sedimentary host rock. The stratigraphy of the host rock is clearly visible along some of the small mountains on the property, and it appears the upper levels of the rock has a domed geometry, which also suggests that a large intrusive mass may have displaced the surface rock strata upwards. So I am hopeful that the company may find a significant, high grade contact zone underlies the entire district, or perhaps localized higher grade feeder zones may extend from the intrusive, downdip from the old mines.
A final intriguing prospect is for a large porphyry system to extend in proximity to the intrusive. To date, one small porphyry has been identified by the previous operator of the property, but only anomalous values of metals were encountered. More exploration is warranted, since many large and productive porphyries exist within the region.
I think Yale has gained a valuable exploration asset with this acquisition, and they paid a reasonable price to get 100% control. There is enough remnant resources from the old mines to give a taste of possible future production, but it will take some good fortune at the end of a drill bit to make the project into a company maker. There is certainly enough evidence of widespread mineralization to be encouraging that some positive surprises are waiting for discovery.
Yale has been a very sedate performer through the bull market so far. The company has a very tight share structure, and respected, competent management, so exploration success should translate into good share performance for investors. I think the stock is a bargain at the current price, but so many other early stage explorers are also in the bargain bin right now, and there is probably not going to be any drilling commencing until 3 months or so passes. The stock appears to be sitting at strong support in the low 20-cent range, so I think there is limited downside risk, but I also think it will require some patience to wait it out and see if they can deliver a big discovery later in the year. The other projects the company controlls also have the potential to generate attractive discoveries that could get more attention from investors.
I own shares of Yale. I have no relationship with the company. My direct travel expenses were paid by the company, but I do not receive any form of compensation for presenting my comments and opinions.
cheers!
COACH247
Company News Alert for Silver Eagle Mines
Silver Eagle Extends Its Calvario Vein Down Dip More Than 400 Metres (1300 Feet)
Marketwire
TORONTO, ONTARIO--(CCNMatthews - July 11, 2007) - Silver Eagle Mines Inc. ("Silver Eagle" or the "Company") (TSX:SEG) is pleased to announce assays from six holes at its Miguel Auza Mine in Zacatecas, Mexico, including the deepest hole drilled on the Calvario Vein to date. Diamond drill hole number 2007-131 has intersected the Calvario Vein at 410 metres below surface and returned an equivalent grade of 732 g/t (24 oz.) Ag Eq.(1) over a vein true width of 3.0 metres. (See chart below). Hole 2007-131 also intersected the newly identified Milagro Vein (reported in press release dated April 27, 2007 - http://www.silvereaglemines.com/pdf/p_release/2007_04_27.pdf) at a depth of 330 metres below surface, returning 21.6 metres of core averaging 537 g/t Ag Eq(1).
Three surface diamond drills continue to extend the Calvario Vein on strike and to depth, and continue to identify new veins running adjacent to the Calvario Vein. The Milagro Vein, presently interpreted as a breccia pipe measuring at least 250 metres in height and up to 29 metres in width (reported in press releases dated March 8, 2007 - http://www.silvereaglemines.com/pdf/p_release/2007_03_08.pdf and April 27, 2007 - http://www.silvereaglemines.com/pdf/p_release/2007_04_27.pdf), is one such newly discovered vein. Drilling continues in order to further define the veins dimensions and extent.
Additional assays recently received from Hole 2007-116 (reported in press release dated March 30, 2007 - http://www.silvereaglemines.com/pdf/p_release/2007_03_30.pdf) have now extended the intercept width of the Calvario Vein to 9.9 metres estimated true width, with a grade of 218 g/t Ag Eq(1). An important new lateral vein measuring 8.1 metres in core length and grading 294 g/t Ag Eq(1), was also encountered in this same hole.
A longitudinal section of the Calvario Vein showing contours of grade multiplied by estimated true vein width (view Calvario Vein map - http://www.silvereaglemines.com/prmaps/2007_07_11mp.jpg) as well as a complete listing of all post NI 43-101 drill intercepts - http://www.silvereaglemines.com/pdf/SEG_DDH_July11.07.pdf, may be viewed at www.silvereaglemines.com.
Drill Zone Vein From To Core Est. Au Ag Pb Zn Ag
Hole Length True Eq.
Width (1)
2006- Calv- Mila-
100 ario gro 423.10 427.50 4.40 0.35 75 1.80 3.09 421
Inclu-
ding 425.05 425.65 0.60 0.79 246 5.70 11.50 1471
Calva-
rio 434.50 440.00 5.50 3.89 0.08 60 1.46 1.60 251
Inclu-
ding 437.25 437.65 0.40 0.28 0.26 289 6.86 6.32 1080
2007- Calv- New
116 ario vein 44.25 45.20 0.95 0.00 136 2.15 0.75 274
New
vein 61.20 69.25 8.05 0.10 97 1.65 1.58 294
Calva-
ario 90.85 110.15 19.30 9.90 0.22 45 0.74 1.58 218
2007- Calv- New
120 ario vein 42.14 43.10 0.96 0.19 136 2.64 1.59 373
New
vein 56.08 57.04 0.96 0.13 364 9.41 15.20 1997
New
vein 126.90 128.41 1.51 0.00 138 3.68 2.92 514
Calv-
ario 147.32 150.55 3.23 0.80 0.00 148 2.03 1.79 372
less
2007- Calv- New than
124 ario vein 203.15 205.15 2.00 0.05 236 6.96 6.91 1067
Calv-
ario 264.00 269.75 5.75 2.88 0.00 77 2.36 2.41 365
2007- Calv- Mila-
131 ario gro 354.80 376.35 21.55 0.23 157 2.81 3.19 539
Calv-
ario 443.90 451.85 7.95 2.98 0.30 172 4.19 4.67 732
2007- Calv- New
138 ario vein 244.90 246.50 1.60 0.01 31 0.81 0.47 99
Calv-
ario 278.70 280.00 1.30 0.90 0.04 128 1.98 4.14 553
1. Silver equivalent values are calculated on the basis of the following
metal prices: Au US$550/oz; Ag US$10/oz; Pb US$0.50/lb; Zn US$1.25/lb.
Dr. Chris Hodgson, Vice President, Exploration and Qualified Person for Silver Eagle Mines stated: "I am extremely encouraged, not only by the demonstrated continuity of the Calvario Vein at depth, but also by the recent addition of the Milagro Vein and other new veins. All will provide important additional targets for follow-up drilling during the latter half of this year."
ABOUT SILVER EAGLE
Silver Eagle Mines Inc. is a TSX listed (TSX:SEG), Canadian-based mining company exploring and redeveloping an historic silver property in the heart of Mexico. The Company's primary asset is its wholly-owned Mexican subsidiary San Pedro Resources, S.A. de C.V., which controls the fully permitted Miguel Auza Mine in Zacatecas, Mexico. The property includes the mineral rights to 41,498 hectares, hosts past producing mines, and has all necessary infrastructure and a trained mining work force nearby. In 2006, Silver Eagle completed the property's first ever modern exploration campaign resulting in an NI 43-101 compliant report documenting mineral resources; a new resource estimate is expected this fall. The Miguel Auza Mine generated its first revenue earlier this year and is currently processing a 30,000 tonne bulk sample through its on-site mill which is expected to have throughput capacity exceeding 200 tpd by Q4 2007. Silver Eagle has also commenced a preliminary exploration program on its other Mexican properties, outside of the Miguel Auza Mine area.
Dr. Hodgson is the Qualified Person (as defined in National Instrument 43-101) who, unless otherwise indicated, supervised the preparation of the scientific and technical information reflected in this press release. Preparation of the above reported assay samples was carried out by ALS Laboratories Ltd. at their facility in Chihuahua, Mexico, with assaying conducted by ALS at their laboratory in North Vancouver, British Columbia.
This news release contains "forward-looking information" which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or "believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and the Company disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events or results or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances, management's estimates or opinions should change, except as required by securities legislation. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements.
ON BEHALF OF THE BOARD OF DIRECTORS OF SILVER EAGLE MINES INC.
Terrence H. Byberg, President & CEO
FOR FURTHER INFORMATION PLEASE CONTACT:
Silver Eagle Mines Inc.
Terrence H. Byberg
President & CEO
(416) 361-1101
(416) 361-9280 (FAX)
Email: info@silvereaglemines.com
Website: www.silvereaglemines.com
The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
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Disclaimer
CTVglobemedia Publishing Inc. and its related entities and all their employees assume no liability for inaccurate or incomplete information on this site, or for any missing information. The information is provided by multiple data suppliers without verification by CTVglobemedia Publishing Inc. Past performance is not necessarily indicative of future performance. Prior to making any investment decision, consult directly with the individual or firm, and with a qualified investment advisor. © 2007 CTVglobemedia Publishing Inc. All Rights Reserved.
Hi Basserdan!
I have to believe that some form of manipulation is going on with ECU, but I am not smart enough to find proof of that. If Wistar can smoke it out and put a stop to it, then I will be very happy. I have met Wistar a couple of times and he is a smart cookie so I hope he can put presure on the right people to put a stop to it.
cheers!
COACH247
I have been accumulating SSN.T - San Anton Resources, since I was able to speak with their IR guy at the Vancouver show. The stock is a bit top heavy with over 100 million shares in the float, but a holding company controls about 75% of that. This reminds me a lot of the capital structure for OSK.V and we all know how that one behaved last year. The project for SNN also reminds me of OSK so I expect similar performance from it. Anytime you are talking about a compliant resource in excess of 10 million gold equivalent ounces, its a serious project. The average grade is low at about 1 g/t, but the economics of a near surface open pit project in Mexico look pretty good, considering the success that GAM and AGI have posted lately. And I am also happy about the nearly $17 million cash position in the treasury, plus several drills turning full time on the project. I think even after the big run today, SNN is still very cheap, and I will be adding to my position when I get back from Mexico. Its worth a look...
cheers!
COACH247
Hi John!
Economic is a pretty broad description for a deposit. It means that they have done sampling work and recovered gem quality diamonds within deposits that appear to be lower cost operating parameters. There is a lot of work to do to present a case for positive economics, but at least the framework is there. For example, the Farquar occurrence at Highland has a near surface diamond-bearing dike structure that has been traced for about a kilometer along strike, and a width of several meters. I was there in the fall, and they used a backhoe to dig up some of that kimberlite and pile it on the surface. Its that easy to extract, very low cost. And the kimberlite is so heavily oxidized that I could crush it with my bare hands. That stuff has already been tested in small batches and commercial diamonds were recovered. As they do more work, I think they will be able to make a strong case that it is economic, and sooner or later they are going to find a large stone that will send the stock higher. After they have done a distribution analysis, they can start talking economics.
I visit Elliott Lake a few times a year, since my family is retired there. The town got burned when the mining pulled out in early 90s, and the public opinion is divided. Most of the people there now are seniors, and they do not want mining to return. However, money talks, and the north is dependant on mining investment for most of the people that live there. So I think the local opposition will be overcome as the case is made for a robust operation that can spin off benefits to the local community.
I like GEM because it is a value story. So many other juniors are trading at market caps well above $100 million, with no assets whatsoever except for a property holding or two. GEM has defined resources on quite a few projects, that will eventually translate into a higher share price. The marekt is not rational and sometimes you have to wait a long time for a fair value premium to be awarded, relative to peers. But I do not mind waiting, because that value is also downside protection if the sector goes to hell.
cheers!
COACH247
LMAO! CBI is now the best junior stock that everyone is just hearing about... More to come from these guys as they continue to report assays in the next few weeks.
cheers!
COACH247
Hi Tackler!
Just because a company buys a spot to advertise on my website, does not mean that I have a promotional relationship. In my contract, I reserve the right to continue to post my comments as I see fit, and may express a critical opinion of a sponsor company if I believe it is warranted. I am not obligated to make promotional comments or post any comments at all for that matter. These companies understand that my website has generated millions of hits, from thousands of investors, and that it represents a value for them to extend their marketing reach by having their link appear on website. I disclose that sponsorship so that anyone who reads my comments will be aware that a potential bias exists. In fact it is probably true to state that each and every post that appears on any forum is subject to some bias. People who own shares of a company are probably predisposed to be bullish in their outlook of that company, for example. But I am not a paid hack to pump any stocks, and I think my record on many forums with many companies is evidence of that.
cheers!
COACH247
Hi JohnLW!
I dont think there is any management experience in-house at Pele Mountain with uranium. Their leverage to uranium has come as a result of the management strength to assemble control of projects, just as they were able to build the portfolio of projects for diamonds, base metals, and gold. They paid next to nothing to grab that Elliot Lake project, and have since written a cheque to a consulting firm to verify a compliant resource, and recommendations on how to move forward. That puts them way out in front of most other 'uranium' juniors.
I know the current president Al Shefsky has been involved with the company since day one. I am not sure if the term 'frustrated diamond adventurers' is appropriate, since they have actually achieved economic diamond discoveries on two projects, and there is a beehive of activity in the immediate area surrounding their properties right now as other diamond plays are in process. The trouble is that its a long wave exploration cycle, and people get bored and move on. The diamond exploration sector in Canada is in the toilet these days but that kind of thing tends to change very quickly. I am just interested to see that the company has been able to close JV deals with reputable partners, and advance projects. It may not show up in the share price right away, but there is value being created for shareholders.
And that is why I am bullish now on the uranium assets. They have the resource there, and real uranium companies no doubt have GEM on the radar. At some point, as uranium prices continue to rise, that resource will become attractive enough to encourage a JV to develop it. And I believe that the current management has done a good job to create value for shareholders so far, and now that the market conditions are so much stronger, they will continue to be successful.
cheers!
COACH247
I have owned GEM.V for around a year now, with an average cost of 25 cents on a very small position. I could not trade the stock until after the Highland news came out last week, since I had visited the property and knew of information that was not on the public record. Of course, that was very frustrating for me, since I would have been buying aggressively before the uranium news came out last year. But at least now I can trade, so I bougth another 3000 shares this morning.
Normaly I would not consider adding to a position after it has already increased by 400%. I was hoping for some sort of pullback, but I do not think that will happen. If a stock is trading higher on rumour and speculation, then one would expect that it will retrace. But if a stock runs higher on the basis of a significant acquisition, and it is still undervalued, then it can be sustained.
My optimism right now is based on a number of factors:
1) Uranium is as hot as a pistol in the markets, and many uranium juniors corrected last week. So I think some of the froth is out of the sector and its safer to be a buyer now. Uranium prices will not be pulling back anytime soon, and the full extent of the disaster for Cameco at Cigar Lake has not yet been discounted into the price of uranium. I think uranium will hit $100 this year.
2) Most uranium juniors are nothing but a concept. They have nothing whatsoever in asset value to warrant the high market cap that many companies currently trade at. GEM is one of the few juniors that actually has a resource of tens of millions of pounds of uranium. It is a low grade deposit, but it exists, and as the market price of uranium climbs, the value of the deposit will climb. So GEM is going to become a premium stock to own in that group.
3) His Majesty Jim Dines has yet to comment on GEM, but he will get to it eventually, and that alone will probably be worth a buck per share for the Dines or Casey seal of approval on the stock.
4) The historic resource for the uranium was compiled by the former operator of the property, Rio Algom, which was a respected and professional mining company. Therefore the estimates are likely accurate. However GEM has commissioned the consulting firm Roscoe Postle Associates to complete a compliant resource estimate. Once that estimate is released, then institutional money will be willing to buy GEM since they will have a documented resource by a reputable firm to base their projections on.
5) GEM bought the entire uranium asset for next to nothing and has increased the total property position. There is further exploration upside and the entire district was once a leading source of uranium production in Canada.
6) GEM has other assets including gold-copper-diamond projects which are also active and will have the potential for additional discoveries to be announced.
So I am bullish as hell on Pele Mountain right now. By my own estimates, here is the asset value for the Elliot Lake uranium deposits, if the spot price reaches $100 for uranium, a level that would make the deposit economic and certainly a candidate for development or acquisition by a producer:
Estimated tonnage: 27 million tonnes @ 1 pound U308 /tonne
Uranium resource: 28 million pounds
Gross deposit value: $2.8 billion @ $100 spot U308 price
Asset value (conservative) $140 million or $2.15 per share
Asset value (bull market) $250 million or $3.80 per share
Keep in mind that in a raging bull market like the current situation, with a deposit that would be economic at the resource value of $100/pound, the higher asset value multiple I plugged in is still somewhat conservative because I used less than 10% of the gross deposit value.
And keep in mind that the target of $3.80 is more than a triple from the current market price for GEM, and it does not include the asset value of all the other projects.
Usually when I post about a stock, I am not going to trade it. But I already have a small core position of Pele Mountain, and the shares I bought today are for trading. I expect a big pop in the share price within a month, perhaps to the $2 level, and the further gains for GEM as the U308 spot price continues to climb. So I will be taking profits as the stock rises, but I also think GEM is a must-own stock for anyone in the uranium sector.
cheers!
COACH247
Personal disclosure: I own shares, and Pele Mountain is a sponsor of my website and 2007 stock picking contest. I have no promotional relationship with the company. Forum members are advised to do their own DD, this is my opinions I have presented and not a buy recommendation.
Dia Bras Bolivar Pilot Mining Program: Expectations Exceeded for 2006
MONTREAL, QUEBEC, Jan 11, 2007 (MARKET WIRE via COMTEX News Network) --
Dia Bras Exploration Inc. (TSX VENTURE: DIB) is proud to announce that it exceeded its yearly forecasts in terms of tonnes of material processed, tonnes of concentrate produced and production value.
During 2006 the Company processed 96,575 DMT of material averaging grades of 10.63% Zn and 2.03% Cu, and produced 16,183 DMT of Zinc concentrate and 5,507 DMT of Copper concentrate for a total estimated production value of US$26.8 million.
In 2006, the Company billed a total of US$30.1 million, which included invoices for final settlement for concentrate shipped in late 2005. In the final billing process, the Company continued to benefit from increased metal prices.
Bolivar Pilot-Mining Program - Year 2006
During the fourth quarter ended December 31, 2006, the Company processed 27,797 DMT of material averaging grades of 8.61% Zn and 1.45% Cu, with the month of October contributing more than 9,900 DMT, the most productive month in terms of tonnage processed since the beginning of the program. Recoveries at the Malpaso mill averaged 91.70% for zinc and 78.86% for copper resulting in a production of 3,761 DMT of zinc concentrate and 1,114 DMT of copper concentrate during the quarter. Material grades were lower than the 11% Zn and 2.5% Cu average forecast for the quarter as high metal prices allowed the Company to process lower grade material while maintaining its targeted cash flow.
The value of the total concentrate production for the quarter, based on average monthly zinc and copper prices, is estimated at US$7.4 million, which exceeds the early 2006 forecast of US$4.0 million per quarter. Direct operating costs for the quarter, including shipping of concentrate, amounted to approximately US$3.6 million compared to the forecast of US$2.5 million. These increased costs are mostly due to increased shipping and transportation costs. Sustained high prices for zinc and copper during the quarter combined to result in continued positive cash flow, which financed the exploration and capital expenses as well as property payments.
Bolivar Pilot-Mining Program - Q4 2006
(1) Non-GAAP measures: The Company reports production value, production costs, net smelter revenue per tonne, direct operating cash costs per tonne and gross margin before amortization per tonne even if it is a non-GAAP measure to inform about the approximate value of the quarter sales, isolate the measure of pilot-mining direct operation costs activities less amortization and depreciation. The Company believes this is useful supplemental information however it should not be considered as a substitute for measure of performance prepared in accordance with GAAP.
The Company's total concentrate production is sold to MRI Trading AG (MRI), a Swiss-based, privately-owned commodity trading company, pursuant to a standard concentrate purchase agreement.
The pilot-mining program provides essential data on costs, logistics, grade, recovery and metallurgy that will serve for a feasibility study on the Bolivar property. The short-term objective of the program is to generate sufficient cash flow from zinc and copper concentrate production to finance development and exploration at the Bolivar mine and elsewhere on the Bolivar project.
It is important to note that Bolivar is not at a commercial production stage. The completion of a feasibility study is required to confirm the economic viability of a property before it is brought into commercial production. The Company expects completing its exploration program on the Bolivar property and extensions in order to achieve a feasibility study in 2007.
Working capital and cash on hand
The Company currently has a working capital of CDN$24.0 million (unaudited) including $19.5 million (unaudited) in cash.
Malpaso mill
The Company officially inaugurated in December 2006 its 500 tpd El Triunfo circuit at the Malpaso mill, thereby increasing its capacity to 850 tpd.
The Company is currently initiating a bulk sampling program from the La Bamba property in its silver Cusi mining camp. First results of milling will be published subsequent to the first quarter 2007.
Dia Bras forecasts 2007 pilot mining production at Bolivar of 96,000 tonnes of material averaging 7.5% Zn and 1.5% Cu, because projected higher metal prices will allow the Company to maintain its targeted cash flow.
About Dia Bras
Dia Bras is a Canadian exploration mining company focused on precious and base metals in the State of Chihuahua, in northern Mexico. The Company is committed to developing and adding value to its assets - the Bolivar copper-zinc project and the newly acquired Cusi silver mining camp. The Company trades on the TSX Venture Exchange, under the symbol "DIB".
Forward-looking statements: Except for statements of historical fact, all statements in this news release, without limitation, regarding new projects, acquisitions, future plans and objectives are forward-looking statements that involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements.
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.
Contacts: Dia Bras Exploration Thomas L. Robyn Executive Chairman 514-393-8875 poste 241 Dia Bras Exploration Rejean Gosselin President 514-393-8875 ext. 241 Sun International Communications Nicole Blanchard Managing Partner 450-627-6600
SOURCE: Dia Bras Exploration Inc.
Copyright 2007 Market Wire, All rights reserved.
The best junior exploration stock that no one here has ever heard of: V.CBI - Colibri Resources
This stock is an easy double in 2007, and much more, IMO. The company is recently listed, and has only about 20 million shares in the capital structure. There is more than $1 million in the bank, plus outstanding warrants at 30 cents that will add more cash. The stock trades below 20 cents, so the total market cap is less than $4 million, which would amount to a ridiculous valuation considering they have excellent prospects.
They control 3 exploration prospects in Mexico, including the Ramanje Ardiente project, which has over 100 historic workings. We know that it has widespread mineralization near surface with high grades in order to have seen that level of past mining activity, and this was recently confirmed with a shallow drilling program that yielded assay results as high as up to 461 gpt silver, 9.2% lead, 8.5% zinc over 5 meters, starting almost from the surface, in skarn mineralization. Skarn is often encountered in very large deposits so this could be a huge system, but no drilling has been done to test it at depth.
The company has also done preliminary exploration at the Colibri project, located near the largest operating gold mine in Mexico, the La Herradura owned by Newmont. A program of seventeen drill holes targeted the property and Five holes reported intervals of greater than 1 gpt gold over 1.5 m. Most holes cut at least two distinct mineralized zones. Again, its a good start and there is great potential once they get more active with follow up work.
The Leon Property is also in an area with many large deposits located nearby, but very little work has been done on it so far. They are looking for a JV partner for that one.
Any one of the three properties could be a flagship project and there is enough evidence to support major work programs. With such a tight float, exploration success would rapidly send the stock to much higher levels.
I have a small position in the company, and am doing research to complete an article for publication later this year. I would suggest that people do their homework on this one, and compare it to the peer group of explorers to see just how much a value it is. For example Stroud Resources (SDR) is at a similar exploration stage, but it trades at a market cap of about $20 million. Journey Resources (JNY) stands at around a MC of $10 million. Chesapeake (CKG) trades around $100 million MC. I know it has cash in the bank, proven management, and several good projects that are mostly early stage exploration prospects. Is it worth 25 times more than CBI?
If you are considering buying this stock, then put in a limit order, or you will pay too much. It trades on very thin volume and there is not much stock for sale all the way up to 50 cents. Be patient and let the sellers hit your bid. The stock has sold down slightly on very thin volume during the correction so I think its in extreme value range, and again my expectation is for an easy double within just a month or two. I think it could be another BGL and run to well above a buck once they get plans confirmed to expand the scope of exploration.
cheers!
COACH247
Personal disclosure: I own a small position of shares. I do not have any relationship with the company.
I am doing my project reviews today to narrow down my top-5 list for 2007, and BGL will definately be on it. Here are some of the facts about the company that keep me excited for the new year:
The Cinco Minas project is an advanced stage project but the market has not valued the story as a development play. The market cap for the company is still below $50 million. This is far below the peer group of companies that are emerging producers in Mexico. But I do not just have expectations that BGL will close the gap to the average for the group. I think BGL will be a market leader.
Management has held onto their stock despite the fact that the shares trade several times higher than their issue price. However, what is even more remarkable is that the management cashed in options and warrants early to continue to fund the company, yet almost none of that cheap paper has hit the market. This is the biggest endorsement I can think of for a junior miner. Many companies are quick to point out that management owns a high percentage of the stock, but one should look further to see at what price that stock was acquired, and in many cases junior mining companies grant lavish stock options and allow insiders to buy large blocks of seed capital for a penny per share or less before going public. To have a company like BGL where insiders are so confident about the future potential that they have not taken money off the table, and have continued to put cash on the line, is extremely bullish.
The senior personnel that are working with the company are all in demand and have been offerred jobs elsewhere, but chose to work with BGL. For example, the project manager Mr. Ismael Manriquez Olmos, was once a senior manager with Penoles at the largets primary silver mine in the world. To have someone like this agree to work with BGL is a huge endorsement of the potential for the project, and it is also a benefit going forward since he will contribute experience and expertise to ensure that growth in the scale of operations occurs efficiently.
There is a body of data on the project from decades of past production by former operators, that will give the company a head start with detailled knowledge of metallurgy for the various different kinds of ore that will be processed. The plan is to run a 3-stage operation: 1) a small mill (60 tpd) to allow for processing high grade ore and training staff, that is nearly complete. 2) a medium size mill (200 tpd) to run sulphide ores from underground development. 3) a large crushing circuit (several thousand tpd) to feed a heap leach process for the millions of tonnes of lower grade oxide material that has been identified in various near surface deposits. Each of the above stages will allow the company to generate positive cash flow immediately upon commencement, and will ensure that the company can expand the scope of operations with a minimum of growing pains.
Cash flow from operations will be used to fund an aggressive drilling program to prove up new resources. We already have data from past production that demonstrates extremely high grade ore shoots from the vein system on the property. Since the previous operators only completed development work to maintain their operations, almost no systematic exploration has been completed on the project, and it is therefore very likely that additional high value discoveries remain to be defined as a coherent program is initiated.
The company has already developed a decline ramp access to the main workings of the largest past producing mine on the property, and encountered ore grade material as they advanced the ramp. Water is being pumped out of the flooded lower workings of the mine. This work serves as a 'bridgehead' for the next phase of development. Road construction has been ongoing through the latter half of 2006, and the foundation for the permanent mill has been built, along with the construction of the first phase of processing infrastructure. So we will begin 2007 with almost a 'turn key' operation in place that the market has not discounted into the current share price.
The stock is so tightly held that any increase in trading activity is going to generate a rapid increase in share value. BGL has a strategy to under promise and over deliver, so there is not a lot of hype and sizzle in the market. As they announce the progress on the development, the commencement of production, and any exploration success they may achieve in 2007, this will have the effect of increasing the attractiveness of the company and encouraging additional buying. Almost no analyst coverage is focused on the company. Once the have earned the respect of the analsyts that positive coverage that results will further promote the story.
The Cinco Minas is only one of the two large, late stage projects the company controls with their JV partner. As development accellerates at Cinco Minas, the company will be able to turn their attention to fund the exploration and development of Grand Cabrera, another exceptional past-producing prospect located in close proximity and on the same vein system. So the company has growth prospects in the pipeline to keep it busy for a decade or more.
I think some people will look at the share price performance of BGL during the last year and think they have missed the boat. But it is the market value comparison with the peer group of companies that has me so bullish even now. I think BGL will earn a market cap of between $100-150 million, to put it in the range of other emerging producers like GPR, GGC, and EDR. That means that even with the closing of the current PP, considering a fully diluted capital structure of 45 million or so shares, the company will rise to about $3 a share just to achieve par value in the group. And as I stated earlier, I think BGL will be a market leader, based on the development potential to support an operation of several thousand tonnes per day, and the exploration potential of their large property holdings that could yield several significant new high grade discoveries. The excellent management team that is advancing the company at a sustainable pace will continue to generate more respect in the market as they achieve this success.
2007 is going to be a breakthrough year for BGL, in my humble opinion...
cheers!
COACH247
PS: Voluntary personal disclosure - I own shares of BGL, and the company is a corporate sponsor for the 2007 stock picking contest for Smartinvestment.ca forum members. I do not have a promotional relationship with the company, and have not been offerred any form of compensation. My commentary is entirely based on my own opinions and I was not asked to present it
My last batch of notes on EXM:
I was only able to visit the Urique and Moris projects during my tour, but we did an overflight of the Maguarichic Project from a light airplane on the way back to Chihuahua, and I noted that the property occurs along a remote slope, with a large area of alteration clearly visible. Outcrops had been exposed by erosion from a creek running across the property. Penoles controls a property in close proximity to Maguarichic, and they had been interested in our holdings for a long time, so they closed the JV deal with EXM. This is a similar type of deposit to what we are exploring at Moris, and that is why Penoles opted to drill the near surface extensions first, and why they do not expect to hit high grade intervals on the first pass. The upper levels of these alteration zones are typically silica rich zones where the gases and heated fluids boil off, and there is no way to be sure exactly how high up in a system you are without drilling. Further down the vein structure is where the enriched zones of silver and base metals are likely to be found. Penoles has been exploring and developing this type of structure for a long time, and they know how to advance a project. The terms of the JV ensure that EXM is carried for their interest while Penoles operates the exploration and fully funds the work. Thats a good deal.
Back at the EXM office in Chihuahua, Craig Gibson showed me the geologic maps of the Reyna de Oro Project. This info was of particular interest to me, given the close proximity market on that map for the DiaBras Bolivar Project. Bolivar is a large scale copper-zinc deposit of skarn and replacement ore, that was emplaced as a result of mineralizing fluids circulating through a nearby intrusive. Craig showed me the geology of Reyna, including two large intrusive structures on our holdings. Large zones of limestone at the edge of the intrusives suggest the potential for a carbonate replacement type system, where acidic fluids react with the limestone to replace the host rock with potential high grades of silver and base metals minerals. Such a discovery on Reyna would be huge, and Chihuahua has hundreds of years of mining history exploiting such deposits.
The early work completed by EXM at Reyna has so far defined high grade vein structures rich in copper and gold. This work has defined a limited tonnage so far, but Craig thinks that the zones could ultimately amount to a million tonnes or more. One option this available in the short term is to initiate small scale production on the near surface vein material, which could be economic given the higher grades they have encountered. The longer term strategy is to complete some more geophiz work to define larger target areas that could be the feeder zone to the high grade veins. This is a huge property that could easily be subdivided to allow at least one JV partner to tackle one or more target areas, and still leave a big chunk for EXM to own 100% of.
The new acquisiton surrounding MAG's Batopilas property is also of note, since this area has produced an estimated 300 million ounces of silver in its history. This will be yet another prime property to parcel off to a JV partner in the future, and allow EXM shareholders to participate at the discovery level with a carried interest.
I am surprised that there has not been more discussion about the Guanojuato property acquisition. This was announced while I was touring Moris, and Craig pointed out to me that EXM holdings are on the edge of the productive geologic trend that also hosts the GPR project. Despite the presense of several historic workings, it is yet another region that has seen little in the way of modern exploration. It is still amazing to me that such properties are available in these districts to be had at this stage of the cycle, and the companies like EXM with the vision to acquire them cheaply now will be the big winners later when the boom is in full flight.
I think Moris will be the primary focus for EXM for the next few months until they have the project in produciton and generating cash flow. Craig tells me he still looks at new acquisition opportunities all the time and still wants to add more projects where they can realize strong value. He told me about one project where the vendor asked for $1 million in cash, and Craig offerred him $10,000. I found that hillarious because it pretty much sums up in a nutshell the negotiation process in Mexico, and underlines that the company will not overpay for a project.
The future looks very bright to me. Combined with the cash flow that should start rolling in from Moris, and the exploration funded by JV partners, I think EXM will be able to complete a great deal of work in the next few years with minimal dilution going forward.
cheers!
COACH247
Personal Disclosure: I own shares of the company that I purchased in the market. EXM has confirmed that they will be a sponsor of my website starting in 2007. My direct travel expenses for trip were paid for by the company.
I have been pounding the table a lot about EXM lately, and especially now after I went to visit some of their projects last week. I still have a lot of information to pass along for anyone that is interested so I am writing it in small batches, rather than a 10,000 word report that will make people's eyes glaze over. But for anyone that is interested, here is the link to the latest post from my forum on the exploraton potential: http://www.smartinvestment.ca/php/phpBB2/viewtopic.php?t=7150
I eat my own cooking, so I have been a buyer of EXM all the way up from 20 cents this summer, and I continue to add in batches as I can free up the money. The stock has made a nice move so far, but I hope to present the reasons why I think we are still early in the run for this company. And I posted disclosure at the bottom, but for clarity I will state that I was reimbursed for my direct travel expenses only. It is my own money that is on the line, as with all of my investments, and I am not an advisor and do not recommend picks. My objective is to present information that can assist people in their own choices, and everyone should do their own DD. I have never sold a share even though the stock has more than tripled from my original buy in, and I will not be selling any shares for a long time, so I want to emphasize that I do not post here to pump my picks and sell into any interest that I create.
cheers!
COACH247
Notes from my visit the Moris Mine and EXMIN Resources:
I am still jet lagged from my 4-day trip to Mexico, and not quite sure where to start, but I do want to make sure I can post as much information as possible tonight, and I will follow up on the weekend. I have about 20 pages of notes to review, and I wil be distilling that down for a Mexico Mike article in January, but I have the luxury of presenting the entire commentary on my visit here.
The Moris Mine is located in a large claim block in southwestern Chihuahua, about 6 hours of driving from the airport. Much of that trip is along gravel roads, which are typical of rural Mexico in that they are full of potholes and very narrow. One error in judgement will often end in a long, fatal plunge of several hundred metres into a valley. The locals there are quite used to driving under those circumstances, and heavy trucks make their way along the same routes. At least scenery of the area is spectacular.
Moris is a small town of about 2,000 people. Our JV partner Hothschild has an office in town. There are very limited services, and the hotel was a dump, but people are friendly enough and the town is benefitting from the resumption of activity of the mine, located just a few kilometers down the road.
The mine is quite an impressive operation. A large hill rises above the entire project, and the largest deposit is located on the side of that hill. The upper layers have already been mined, and the slope is stabilized by benches that step down about every 10 meters or so. The current open development is about 50m deep and runs the length of the hill, about 100m or so of the strike of the vein.
Numerous piles of stockpiled ore remain to be processed, both on the slope of the mine, and in various dumps around the property. The ore is striking in that it is honeycombed with vugs, a sign of intense hydrothermal alteration and silicification. This altered rock is embedded with gold averaging 2-4 grams per tonne. There is also a wide zone of brecciated rock adjacent to the vein structure that is also enriched in gold. Silver is associated with the mineralization, averaging about 8 grams per tonne.
The vein itself is clearly visible in the upper layer of exposed workings, measuring about 10m across and dipping parallel to the slope of the hill. This is an ideal operating environment for the mine, since most of the material that is excavated is ore, there is a very low strip ratio of waste rock.
About 60-80m of ore remains above ground to be processed, which could last for about a 4-year mine life when the mine resumes operations at capacity. There is a higher grade zone below the floor of the valley which Hochschild has identified with a few drill cores from the last round of exploration, but more work will need to be done to prove this resource up. Once the limits of the open pit have been reached, an underground operation is possible to process higher grade gold.
The vein system continues on to an adjacent hill about 200m along strike, where another ore body has been identified by the previous operator of the mine, and work is currently underway to confirm the resource. And then a third, smaller ore body has been outlined further along strike from that.
There are workings at the top of a large hill behind the known veins, and a possible parrallel vein system may exist there, but only limited work has been carried out so far. Nonetheless, it underlines the intense alteration that is evident throughout the region. There is a huge potential to continue to prove up new resources for this project, since only limited exploration has ever been completed despite some excellent results from the isolated drilling that has been done in the area over the last decade.
The infrastructure in the area is superb. The crushing mill is a three stage operation, and the equipment is in very good condition. The fine crushing circuit is almost brand new, since the Barmac unit was discontinued by the previous operator to save time and money. This may have been a contributing factor the closure of the mine. Kappes Cassiday Consultants have reviewed the operations, and they believe that the failure to crush the ore down to a fine mesh would have lowered the recovery efficiency for the entire project. (You may have heard of Kappes Cassiday: They were the group that did the metallurgy and feasibility work for Gammon Lake at Ocampo). Some refurbishment and maintenance will be necessary but overall the expensive equipment is in very good condition.
Two leach pads are set up alongside the mill, and one is brand new and unused. The ore on remaining on the original leach pad was not crushed to optimum fineness and may be potentially reprocessed to generate additional production, but a great deal of sampling and testing will be necessary to confirm that. An extensive system of conveyors is rigged to efficiently transport the ore from the crushing circuits to the leach pad, and from my observations it looks to be in excellent condition and fully operable.
A carbon in columns recovery circuit sits adjacent to the pregnant cyanide pond. I asked if any gold was in the pond to be extracted but it is unlikely. The company is reviewing recovery options and they may go with the idea to scrap the current recovery unit and build a more efficient and modern operation. The current unit could be sold for salvage if they choose to do so. I did not get an idea of the capacity, but I would estimate 30-50,000 litres per day.
The shop and garage is in excellent condition. Rolling stock, including two large dump trucks, two loaders, a crane, an excavator, and several bulldozers, were in a line along the lot, where they had been parked since the mine closed 5 years ago. The equipment looked good, but management is not counting on the reliability and service standard of the vehicles without a thorough maintenance program.
There is a modern office at the edge of the property with plenty of room to allow for administrative functions. A guardhouse is situated at the main entrance, and the entire property is surrounded by a security fence.
My overall impression is that this project is a first class asset and EXM has landed a gift for its shareholders with the deal. If they exercise the purchase option, and I believe they will, EXM bougth the project for $6 million, shared 30% for EXM and 70% paid by Hothschild. I would estimate that just the value of the current equipment that came with the deal is worth more than the total purchase price for the entire mine. They get the ore stockpiles, the entire data set of exploration and development work, at least a 4-year resource to run the mine, and the surrounding property with numerous propective targets to add to the resource... for free.
I met many of the senior management for Hothschild, and the relationship with our JV partner is excellent. This arrangement will work very well for both companies. I was also told that other companies stepped up to offer more cash to earn into the Moris project, but EXM went with Hothschild because they have strong operating capabilities, and area that is essential to make money restarting operations at an old mine, and that expertise is not on hand among the EXM team. So its a great deal for both partners.
This project is absolutely the best deal that a junior like EXM could dream to participate in. I think it will become the foundation for a much larger exploration program, and along the way EXM will become entrenched as the exploration arm for Hothschild. Mexico is the place to be for growing mining companies, and Hothschild is going to become a powerhouse in that country. Add in the good relationship that EXM has with Penoles, and I am very, very optomistic for the future.
cheers!
COACH247
One thing I like about the production for IPT is that Zn supplies about half of the revenue as the silver does at current metals prices. I think both metals are going higher in 2007. So far IPT is running a lot of lower grade development ore that they process as they extract rock from advancing underground workings, and they are still making a profit. Once they start running the high grade production ore from all of the new stopes they have developed, the company is going to report a few quarters that will be multiples above the current earnings.
cheers!
COACH247
I have just started my DD on another Mexico junior that is not on the list here: YLL.V - Yale Resources. This company has options to earn 80% into 3 silver projects in Zacatecas with IPT that they picked up for peanuts, and a serious JV with EXM to earn a 75% in a large holding in Chihuahua that is adjacent to El Sauzel. The reason I am buying is because they have an extremely tight share structure, with on 22 million fully diluted, although they will have to do a financing soon to fund a work program they have scheduled for January.
cheers!
COACH247
Hi Huesos!
Yes, WTM is the merged version of the two predecesors. I bought in just to get the exposure to the SYR Mexican portfolio but I am warming up to the potential of the Timmins projects too. I think the idea of a spinnoff of the Mexico projects into a separate junior is on hold for now, but I still think the merged company is stronger than the sum of the two individual juniors.
cheers!
COACH247
Hi Ed! Here is a new one for your list of Mexico Juniors:
Mexico Mike: Virgin Metals (V.VGM)
I have to wait until the article has been published in Investors Digest before I can post it, but here you go:
Virgin Metals works to return historic molybdenum mine to commercial production.
Molybdenum is a metal that is a critical component for many industrial applications, yet most investors would consider it is nowhere near as sexy as gold, silver, or zinc. Like almost every commodity, moly has risen sharply off rock-bottom bear market lows, however few people are aware that the spot price for molybdenum has actually outperformed just about every other metal over the last few years.
Since there is no futures market for molybdenum, thus keeping speculators out of the picture, the market performance for moly is strictly driven by fundamentals. And the fundamentals are good… very good in fact. With worldwide demand expected to continue increasing, and only limited new supplies projected to reach the market for at least another 2 years, the high current price for the metal is an incentive for junior mining companies to accelerate development of projects that could begin production in time for them to cash in.
That is exactly the game plan for an ambitious Mexican junior, Virgin Metals Inc. The company controls a 100 percent interest in the Los Verdes property, located in southeastern Sonora State. A former producing moly-copper project, Los Verdes has the advantage of a information from previous operators that indicates large historic resources remain at the mine to be exploited. This information is not considered compliant within the guidelines mandated by NI43-101 requirements for reporting, but it should be noted that the past exploration work was completed by Industriales Penoles and Cominco Ltd, two senior mining companies that know a thing or two about defining deposits, so a high degree of confidence can be attributed to the potential deposit.
Virgin is currently completing a 6,000-metre reverse circulation drill program, with the objective of confirming the historic resource estimate for the property. The company expects to prove up a deposit of more than 6 million tonnes, grading an average of 0.86 percent copper, 0.16 percent molybdenum, and 0.135 percent tungsten oxide, and the results of the drilling program will allow for a fully compliant resource estimate to be prepared.
I was able to visit this mine in September and came away with a strong impression of the potential for the entire project. The deposit occurs along a prominent ridge in an area of sharply incised terrain, which is part of the prolific Sierra Madres Occidental physiographic region. It is adequately served by paved road access, except for the last few kilometres to the property that are more of the usual teeth-jarring roller coaster ride one expects to find on the local gravel roads with limited maintenance. A hydroelectric transmission line was under construction nearby, ensuring the potential for a low cost power extension to the property.
A small open pit remains from past operations, which were suspended in the early 1960’s after perhaps 100,000 tonnes of ore had been processed. There was also an adit driven into the hillside, accessing a higher-grade vein structure where I was able to observe extremely rich veining across an interval of several metres, containing visible lenses of molybdenum along with sulphide mineralization, massive pyrites, and secondary copper minerals. The company is currently performing underground sampling to establish metallurgical parameters.
The host rock formation is rich in sulfur, which when oxidized, combines with ground water to form highly acidic solutions. The deposit area has undergone intense alteration, as weathering and oxidation acted on the near surface mineralized zones, allowing copper to become dissolved and transported in ground water, to precipitate out into an enriched zone at the water table in a process of supergene enrichment. In fact, during my visit, puddles where rainfall had accumulated were actually stained a bluish-green hue due to the presence of dissolved copper, nicely emphasizing the effect. After this process continued for many thousands of years, a very rich deposit now awaits development at Los Verdes.
Project geologists are working under an exploration model suggesting that the deposit was emplaced as epithermal fluids from an underlying granitic intrusive flowed into heavily brecciated zones along the major fault system trending across the property. Or, to put that description into layman’s terms, high grade mineralization was emplaced into extensively fractured rock to form a higher grade core, which in turn is surrounded by a wide zone of lower grading, finely disseminated mineralization. Mother nature has concentrated that zone during a long period of time and as a result oxidation, has created one honking high-grade deposit.
An appealing aspect to this framework is that if in fact the fault structure acted as a conduit for mineralizing fluids, then the possibility exists for other similar deposits to have been formed elsewhere along the axis of the fault.
The property area controlled by Virgin amounts to nearly 58 square kilometres and remains largely unexplored, so there is certainly intriguing upside discovery potential once the company learns more about the geology of the deposit and has the opportunity to complete a more regional-scale work program.
Virgin intends to carry out an aggressive development program in order to put the mine back into production as quickly as possible, to capitalize on the high moly and copper prices. A small start up operation is planned, along with the construction of a processing and recovery plant capable of handling between 200 and 300 tonnes of ore per day. Assuming metal prices remain in the current range, and the company is able to achieve reasonable recovery efficiency at the plant, an operation on that scale could be projected to generate positive cash flow in the range of CDN $500,000 per month.
Longer term plans call for the construction of a much larger plant, to increase capacity up to 3,000 tonnes per day. Such an expansion would be expected to greatly reduce operating costs on a per tonne basis, while generating impressive operating revenues. The company could then embark on an extensive exploration program to pursue additional resources that may be hosted elsewhere on the property.
Virgin also controls the large, early stage but highly prospective Cuatro Hermanos (Copper Mountain) property in Sonora. Drilling data from the project suggests that an enormous copper-molybdenum porphyry deposit may be hosted within an area of interest that has been outlined at surface, amounting to several square kilometres. This would represent a high magnitude discovery that adds tremendous speculative appeal. The project is currently on the backburner while activity is focused at Los Verdes, but it will no doubt factor into the longer term plans for the company.
The management team behind Virgin stands out with competent, respected, and experienced professionals. Company president Christopher Davie is a mining and metallurgical engineer with a resume of successful mine development and plant construction. Keith Brogoitti, with a background of management experience in the development of several international projects, has been recently appointed as Operations Manager, Mexico. Along with a talented field team overseeing the exploration work, this company is well staffed with the essential personnel that can enable it to surmount the challenges that inevitably arise along the path as a mine is put back into production.
The company is also well represented by individuals with financial backgrounds, who assisted with an equity offering completed earlier in the year to successfully raise approximately $5.7 million. This provides the funding necessary to allow the first phase of development work to be completed. The fully diluted share structure for the company now stands close to 74 million shares, which is at the higher end of the range that I consider for a junior in my investment criteria. Given the strong cash flow that the company is capable of generating in short order, and the robust commodity cycle that the market currently enjoys, I believe significant upside potential still remains for investors as Virgin advances along its business plan.
The overall awareness level among investors for Virgin is probably very low right now in respect to the potential this little company has to offer. Much of that is due to a limited scope of active promotion at the current time, but it is much easier to launch effective promotion than it is to find a great resource prospect, so the outlook to remedy the situation is certainly encouraging.
There are few options available for those seeking exposure to primary molybdenum producers. The stock market behaves like any other market, in that a restricted supply of shares along with growing demand as money flows into the sector, will result in higher share price multiples for these select companies. I expect that as new interest is directed towards the stock, and a more reasonable asset value for Los Verdes is discounted into the market capitalization, the shares may rapidly appreciate to a level above $1, which amounts to more than a tripling of the current share price.
On the basis of a strong, tested management team that is advancing a solid project, with a high probability of defining a large, high-grade resource, along with the security of a well funded treasury to enable the company to rapidly advance to production, I buy $10,000 of Virgin Metals for the Mexico Mike Portfolio.
cheers!
COACH247
Mexico Mike: Virgin Metals (V.VGM) Moly play:
Mexico Mike: Virgin Metals (V.VGM)
I have to wait until the article has been published in Investors Digest before I can post it, but here you go:
Virgin Metals works to return historic molybdenum mine to commercial production.
Molybdenum is a metal that is a critical component for many industrial applications, yet most investors would consider it is nowhere near as sexy as gold, silver, or zinc. Like almost every commodity, moly has risen sharply off rock-bottom bear market lows, however few people are aware that the spot price for molybdenum has actually outperformed just about every other metal over the last few years.
Since there is no futures market for molybdenum, thus keeping speculators out of the picture, the market performance for moly is strictly driven by fundamentals. And the fundamentals are good… very good in fact. With worldwide demand expected to continue increasing, and only limited new supplies projected to reach the market for at least another 2 years, the high current price for the metal is an incentive for junior mining companies to accelerate development of projects that could begin production in time for them to cash in.
That is exactly the game plan for an ambitious Mexican junior, Virgin Metals Inc. The company controls a 100 percent interest in the Los Verdes property, located in southeastern Sonora State. A former producing moly-copper project, Los Verdes has the advantage of a information from previous operators that indicates large historic resources remain at the mine to be exploited. This information is not considered compliant within the guidelines mandated by NI43-101 requirements for reporting, but it should be noted that the past exploration work was completed by Industriales Penoles and Cominco Ltd, two senior mining companies that know a thing or two about defining deposits, so a high degree of confidence can be attributed to the potential deposit.
Virgin is currently completing a 6,000-metre reverse circulation drill program, with the objective of confirming the historic resource estimate for the property. The company expects to prove up a deposit of more than 6 million tonnes, grading an average of 0.86 percent copper, 0.16 percent molybdenum, and 0.135 percent tungsten oxide, and the results of the drilling program will allow for a fully compliant resource estimate to be prepared.
I was able to visit this mine in September and came away with a strong impression of the potential for the entire project. The deposit occurs along a prominent ridge in an area of sharply incised terrain, which is part of the prolific Sierra Madres Occidental physiographic region. It is adequately served by paved road access, except for the last few kilometres to the property that are more of the usual teeth-jarring roller coaster ride one expects to find on the local gravel roads with limited maintenance. A hydroelectric transmission line was under construction nearby, ensuring the potential for a low cost power extension to the property.
A small open pit remains from past operations, which were suspended in the early 1960’s after perhaps 100,000 tonnes of ore had been processed. There was also an adit driven into the hillside, accessing a higher-grade vein structure where I was able to observe extremely rich veining across an interval of several metres, containing visible lenses of molybdenum along with sulphide mineralization, massive pyrites, and secondary copper minerals. The company is currently performing underground sampling to establish metallurgical parameters.
The host rock formation is rich in sulfur, which when oxidized, combines with ground water to form highly acidic solutions. The deposit area has undergone intense alteration, as weathering and oxidation acted on the near surface mineralized zones, allowing copper to become dissolved and transported in ground water, to precipitate out into an enriched zone at the water table in a process of supergene enrichment. In fact, during my visit, puddles where rainfall had accumulated were actually stained a bluish-green hue due to the presence of dissolved copper, nicely emphasizing the effect. After this process continued for many thousands of years, a very rich deposit now awaits development at Los Verdes.
Project geologists are working under an exploration model suggesting that the deposit was emplaced as epithermal fluids from an underlying granitic intrusive flowed into heavily brecciated zones along the major fault system trending across the property. Or, to put that description into layman’s terms, high grade mineralization was emplaced into extensively fractured rock to form a higher grade core, which in turn is surrounded by a wide zone of lower grading, finely disseminated mineralization. Mother nature has concentrated that zone during a long period of time and as a result oxidation, has created one honking high-grade deposit.
An appealing aspect to this framework is that if in fact the fault structure acted as a conduit for mineralizing fluids, then the possibility exists for other similar deposits to have been formed elsewhere along the axis of the fault.
The property area controlled by Virgin amounts to nearly 58 square kilometres and remains largely unexplored, so there is certainly intriguing upside discovery potential once the company learns more about the geology of the deposit and has the opportunity to complete a more regional-scale work program.
Virgin intends to carry out an aggressive development program in order to put the mine back into production as quickly as possible, to capitalize on the high moly and copper prices. A small start up operation is planned, along with the construction of a processing and recovery plant capable of handling between 200 and 300 tonnes of ore per day. Assuming metal prices remain in the current range, and the company is able to achieve reasonable recovery efficiency at the plant, an operation on that scale could be projected to generate positive cash flow in the range of CDN $500,000 per month.
Longer term plans call for the construction of a much larger plant, to increase capacity up to 3,000 tonnes per day. Such an expansion would be expected to greatly reduce operating costs on a per tonne basis, while generating impressive operating revenues. The company could then embark on an extensive exploration program to pursue additional resources that may be hosted elsewhere on the property.
Virgin also controls the large, early stage but highly prospective Cuatro Hermanos (Copper Mountain) property in Sonora. Drilling data from the project suggests that an enormous copper-molybdenum porphyry deposit may be hosted within an area of interest that has been outlined at surface, amounting to several square kilometres. This would represent a high magnitude discovery that adds tremendous speculative appeal. The project is currently on the backburner while activity is focused at Los Verdes, but it will no doubt factor into the longer term plans for the company.
The management team behind Virgin stands out with competent, respected, and experienced professionals. Company president Christopher Davie is a mining and metallurgical engineer with a resume of successful mine development and plant construction. Keith Brogoitti, with a background of management experience in the development of several international projects, has been recently appointed as Operations Manager, Mexico. Along with a talented field team overseeing the exploration work, this company is well staffed with the essential personnel that can enable it to surmount the challenges that inevitably arise along the path as a mine is put back into production.
The company is also well represented by individuals with financial backgrounds, who assisted with an equity offering completed earlier in the year to successfully raise approximately $5.7 million. This provides the funding necessary to allow the first phase of development work to be completed. The fully diluted share structure for the company now stands close to 74 million shares, which is at the higher end of the range that I consider for a junior in my investment criteria. Given the strong cash flow that the company is capable of generating in short order, and the robust commodity cycle that the market currently enjoys, I believe significant upside potential still remains for investors as Virgin advances along its business plan.
The overall awareness level among investors for Virgin is probably very low right now in respect to the potential this little company has to offer. Much of that is due to a limited scope of active promotion at the current time, but it is much easier to launch effective promotion than it is to find a great resource prospect, so the outlook to remedy the situation is certainly encouraging.
There are few options available for those seeking exposure to primary molybdenum producers. The stock market behaves like any other market, in that a restricted supply of shares along with growing demand as money flows into the sector, will result in higher share price multiples for these select companies. I expect that as new interest is directed towards the stock, and a more reasonable asset value for Los Verdes is discounted into the market capitalization, the shares may rapidly appreciate to a level above $1, which amounts to more than a tripling of the current share price.
On the basis of a strong, tested management team that is advancing a solid project, with a high probability of defining a large, high-grade resource, along with the security of a well funded treasury to enable the company to rapidly advance to production, I buy $10,000 of Virgin Metals for the Mexico Mike Portfolio.
Mexico Mike
Virgin Metals works to return historic molybdenum mine to commercial production.
Molybdenum is a metal that is a critical component for many industrial applications, yet most investors would consider it is nowhere near as sexy as gold, silver, or zinc. Like almost every commodity, moly has risen sharply off rock-bottom bear market lows, however few people are aware that the spot price for molybdenum has actually outperformed just about every other metal over the last few years.
Since there is no futures market for molybdenum, thus keeping speculators out of the picture, the market performance for moly is strictly driven by fundamentals. And the fundamentals are good… very good in fact. With worldwide demand expected to continue increasing, and only limited new supplies projected to reach the market for at least another 2 years, the high current price for the metal is an incentive for junior mining companies to accelerate development of projects that could begin production in time for them to cash in.
That is exactly the game plan for an ambitious Mexican junior, Virgin Metals Inc. The company controls a 100 percent interest in the Los Verdes property, located in southeastern Sonora State. A former producing moly-copper project, Los Verdes has the advantage of a information from previous operators that indicates large historic resources remain at the mine to be exploited. This information is not considered compliant within the guidelines mandated by NI43-101 requirements for reporting, but it should be noted that the past exploration work was completed by Industriales Penoles and Cominco Ltd, two senior mining companies that know a thing or two about defining deposits, so a high degree of confidence can be attributed to the potential deposit.
Virgin is currently completing a 6,000-metre reverse circulation drill program, with the objective of confirming the historic resource estimate for the property. The company expects to prove up a deposit of more than 6 million tonnes, grading an average of 0.86 percent copper, 0.16 percent molybdenum, and 0.135 percent tungsten oxide, and the results of the drilling program will allow for a fully compliant resource estimate to be prepared.
I was able to visit this mine in September and came away with a strong impression of the potential for the entire project. The deposit occurs along a prominent ridge in an area of sharply incised terrain, which is part of the prolific Sierra Madres Occidental physiographic region. It is adequately served by paved road access, except for the last few kilometres to the property that are more of the usual teeth-jarring roller coaster ride one expects to find on the local gravel roads with limited maintenance. A hydroelectric transmission line was under construction nearby, ensuring the potential for a low cost power extension to the property.
A small open pit remains from past operations, which were suspended in the early 1960’s after perhaps 100,000 tonnes of ore had been processed. There was also an adit driven into the hillside, accessing a higher-grade vein structure where I was able to observe extremely rich veining across an interval of several metres, containing visible lenses of molybdenum along with sulphide mineralization, massive pyrites, and secondary copper minerals. The company is currently performing underground sampling to establish metallurgical parameters.
The host rock formation is rich in sulfur, which when oxidized, combines with ground water to form highly acidic solutions. The deposit area has undergone intense alteration, as weathering and oxidation acted on the near surface mineralized zones, allowing copper to become dissolved and transported in ground water, to precipitate out into an enriched zone at the water table in a process of supergene enrichment. In fact, during my visit, puddles where rainfall had accumulated were actually stained a bluish-green hue due to the presence of dissolved copper, nicely emphasizing the effect. After this process continued for many thousands of years, a very rich deposit now awaits development at Los Verdes.
Project geologists are working under an exploration model suggesting that the deposit was emplaced as epithermal fluids from an underlying granitic intrusive flowed into heavily brecciated zones along the major fault system trending across the property. Or, to put that description into layman’s terms, high grade mineralization was emplaced into extensively fractured rock to form a higher grade core, which in turn is surrounded by a wide zone of lower grading, finely disseminated mineralization. Mother nature has concentrated that zone during a long period of time and as a result oxidation, has created one honking high-grade deposit.
An appealing aspect to this framework is that if in fact the fault structure acted as a conduit for mineralizing fluids, then the possibility exists for other similar deposits to have been formed elsewhere along the axis of the fault.
The property area controlled by Virgin amounts to nearly 58 square kilometres and remains largely unexplored, so there is certainly intriguing upside discovery potential once the company learns more about the geology of the deposit and has the opportunity to complete a more regional-scale work program.
Virgin intends to carry out an aggressive development program in order to put the mine back into production as quickly as possible, to capitalize on the high moly and copper prices. A small start up operation is planned, along with the construction of a processing and recovery plant capable of handling between 200 and 300 tonnes of ore per day. Assuming metal prices remain in the current range, and the company is able to achieve reasonable recovery efficiency at the plant, an operation on that scale could be projected to generate positive cash flow in the range of CDN $500,000 per month.
Longer term plans call for the construction of a much larger plant, to increase capacity up to 3,000 tonnes per day. Such an expansion would be expected to greatly reduce operating costs on a per tonne basis, while generating impressive operating revenues. The company could then embark on an extensive exploration program to pursue additional resources that may be hosted elsewhere on the property.
Virgin also controls the large, early stage but highly prospective Cuatro Hermanos (Copper Mountain) property in Sonora. Drilling data from the project suggests that an enormous copper-molybdenum porphyry deposit may be hosted within an area of interest that has been outlined at surface, amounting to several square kilometres. This would represent a high magnitude discovery that adds tremendous speculative appeal. The project is currently on the backburner while activity is focused at Los Verdes, but it will no doubt factor into the longer term plans for the company.
The management team behind Virgin stands out with competent, respected, and experienced professionals. Company president Christopher Davie is a mining and metallurgical engineer with a resume of successful mine development and plant construction. Keith Brogoitti, with a background of management experience in the development of several international projects, has been recently appointed as Operations Manager, Mexico. Along with a talented field team overseeing the exploration work, this company is well staffed with the essential personnel that can enable it to surmount the challenges that inevitably arise along the path as a mine is put back into production.
The company is also well represented by individuals with financial backgrounds, who assisted with an equity offering completed earlier in the year to successfully raise approximately $5.7 million. This provides the funding necessary to allow the first phase of development work to be completed. The fully diluted share structure for the company now stands close to 74 million shares, which is at the higher end of the range that I consider for a junior in my investment criteria. Given the strong cash flow that the company is capable of generating in short order, and the robust commodity cycle that the market currently enjoys, I believe significant upside potential still remains for investors as Virgin advances along its business plan.
The overall awareness level among investors for Virgin is probably very low right now in respect to the potential this little company has to offer. Much of that is due to a limited scope of active promotion at the current time, but it is much easier to launch effective promotion than it is to find a great resource prospect, so the outlook to remedy the situation is certainly encouraging.
There are few options available for those seeking exposure to primary molybdenum producers. The stock market behaves like any other market, in that a restricted supply of shares along with growing demand as money flows into the sector, will result in higher share price multiples for these select companies. I expect that as new interest is directed towards the stock, and a more reasonable asset value for Los Verdes is discounted into the market capitalization, the shares may rapidly appreciate to a level above $1, which amounts to more than a tripling of the current share price.
On the basis of a strong, tested management team that is advancing a solid project, with a high probability of defining a large, high-grade resource, along with the security of a well funded treasury to enable the company to rapidly advance to production, I buy $10,000 of Virgin Metals for the Mexico Mike Portfolio.
Cash flow projection for Capstone's Cozamin Mine:
Keep in mind, I am not a qualified financial analyst and I am posting my opinion only, but now that I have been to the mine and seen the production from the Cozamin mine and the recovery operation at the mill, I am trying to plug in some form of cash flow estimate. I am going to pick some arbitrary resource grades, just to establish a framework. I was able to visit several stopes under ground that are currently in production and they are mining very high grade zones, and I know the first phase of the production run was processing lower grade stuff. So the first round of operating numbers will probably be lower than the overall average.
Lets go with a sample round grading 2.8% Cu, 1.08% Zn, 0.43% Pb, and 89.5 g/t Ag. That is based on the average grade of the measured resources from the resource estimate released earlier this year. I was informed that copper recovery should average in the high 80% range so we will plug in 88%, and 75% for lead and silver, while zinc is only expected to average about 56%. So we can expect the production value to be 2.46% Cu, 0.59% Zn, 0.32% Pb, and 67.13 g/t Ag. I have deliberately ignored the gold content since it is practically a trace element.
At current metals prices, the concentrate value produced will amount to US $243.46 per ton. We are producing at 1200 tpd, so that generates US $292K per day. The concentrates are purchased by Glencore International, and they likely pay based on about 90-95% of the contained metal value, so lets assume 92% and arrive at US $269K per day or about $300,000 CDN per day in revenues.
Now it gets fuzzy. How much do the mining and recovery costs add up to? Lets go with the estimates used in the scoping study presented by the company, assuming US $32.80 per ton, or about US $40K per day or about $45,000 CDN per day in expenses.
Therefore, if the assumptions are in the right ballpark, we can expect about a million dollars in net cash flow every four days. The mill is currently running 24 hours a day, and the mine has no problem to supply the ore to keep it running at capacity of 1200 tpd. Allowing for periodic downtime due to maintenance, lets go with 340 days per year of operation. That means we can expect net positive cash flow of $85 million CDN.
With only about 80 million shares currently outstanding, and a bit more than 6 million options and warrants, by this time next year I would guess about 85 million shares outstanding as cheap paper is exercised. So we are going to be in the ballpark of $1 per share in cash flow generated.
Keep in mind that the metals prices will fluctuate, the grades of the ore through the mill will fluctuate, the recovery percentage will fluctuate, and the cost base is subject to inflationary presure and will therefore likely increase above projections.
However, if we even come close the $1 per share metric, I think it is reasonable to expect a target price of $10 per share in CS over the next 15 months as the financial data is released and discounted into the share price. That rapid rise in market value should start very soon as the analysts begin to crank out numbers similar to mine and put the word out. Stocks usually trade on expectation of forward cash flow and with the first operating results due out before the end of this year, the numbers will become more reliable.
cheers!
COACH247
Personal disclosure: Capstone has sponsored an ad on my website, and I own 35,000 shares of the company.
Notes from my visit to Castone Mining's Cozamin Mine:
I have waited over 2 years to visit the Cozamin Project, and it was worth the wait. From top to bottom, considering every aspect of the company and its operations, I think CS is the best valued junior on the market right now. And I know that is saying a lot, given the number of other high quality companies that I track.
What impressed me? Well I will try to point out as many detailled comments as I can from my observations.
Right off the bat, the first thing that I noticed was the short distance from Zacatecas to get to the mine. Zacatecas is a town with hundreds of years of mining tradition, and there are literally hundreds of current and past producing mines located within a few miles of the city. Unlike many other junior mining projects, Cozamin is easy to get to, with paved roads from the city, and then a short gravel road to the mine that is in excellent condition.
The improvement at the mill is extradorinary since the company took over the project. In comparison to pictures that were taken early on, there are entirely new buildings that have been constructed, and everything has been refurbished up to brand new condition. I know that a lot of work went into repainting and cleaning up the mill in order to have a good presentation for all the guests at the grand opening, but it was still a model operation and I do not expect it to encounter any of the maintenance issues that will plague some other juniors where the equipment is old and held together with spot welds and duct tape.
A new tailings pond has been built with capacity to handle several years of production. I spoke with the lady that is doing the environmental consulting, and she says the focus is on not just maintaining the overall water discharge quality, but in actually improving it. Since the outflow from the mine will eventually discharge into the watershed for the town, that is extremely important that CS does a good job. It is complicated because other mines nearby will have runnoff into the CS pond and we cannot control what other companies are dumping, so to have a proactive model for wastewater maintenance is critical.
There were several new trucks and heavy equipment in operation while the opening ceremony was underway. I walked through the mill and a large ball mill was running, along with several banks of floatation cells to produce copper, zinc, and lead concentrates. The entire operation was efficient and clean, and large volumes of slurry were sloshing around throughout the tour. There were several hundred people walking through the mill during the tour, so no effort was made to explain what all of the steps in the process were about, but I have been through enough mills to get an understanding of the operations, and it was a straightforward floatation recovery process.
The numbers I was hearing for production suggest about 1200 tpd is flowing through the mill, and they are achieving in the high 80% level for copper recovery, and excellent efficiency for lead and silver, but the zinc levels are only average. The problem with polymetallic deposits comes down to the notion of trying to hit a moving target. The variables affecting recoveries are all feedback loops that change the entire parameters when you change just one input. So running higher grades through one set up will result in different results. Or tuning the operation to run with finer grinding may increase the efficiency for one metal, but lower the recoveries for all the others. Different concentrations of reagents added to the slurry will increase or decrease the combined recoveries for lower grade feed, but generate entirely different results for richer ore feed. And so on...
Underground, the workings are the most impressive that I have seen in Mexico. Of note, there was almost no reinforcing infrastructure in the workings. No rock bolts or support structure was necessary along the miles of developed tunneling, since the rock is so hard and stable. That means there is lower operation risk, and lower costs as they expand the development. And the access was exceptional. I was able to ride in a truck right to the edge of the current ore faces that were in production.
As for the deposit, it was a sight to behold. Extremely rich banded veins of copper stretched across the entire open zone, about 5m wide, in several producing stopes that we visited. There were also visible sulphide chunks of galena and zinc mixed in. The mine manager led us through the lower levels and he informed me that they are able to punch about 10-12 feet per day at each open face.
The mine will have no problems in supplying 1200 tpd but in order to expand that they will have to buy new hoist equipment, and build a larger shaft. The decline ramp to allow heavy equipment access is like a spiral ramp at the edge of a parking garage. It means a longer distance to drive for every level they develop deeper into the mine. That too will become a factor as they continue to build the production. So I do not anticipate any problems in feeding larger quantities of ore to the mills, but they will have to spend the money to improve the infrastructure in order to maintain efficient extraction.
The mill itself has surplus capacity in the grinding circuit, and it is fairly easy to add additional floatation cells if they want to ramp up production. The company is generating strong cash flow right now, so there will be no shortage of funding to allow for an aggressive build up if they choose.
It is worth pointing out here that the main vein system on the property goes for many kilometers, yet they have only explored about 1200-1500m of the system. They continue to hit higher grades of ore at depth too, and the exploration geos think it could go on for hundreds of meters further down. So this is a company that is still an exploration project, even as they run at capacity now.
I was able to spend time chatting with various senior management people. Again, CS is head and shoulders above almost every other junior in terms of the caliber of people they have running the ship. The best testament to their competence is the rapid commencement to full production with none of the usual learning curve to get to high efficiency levels. That is a major accomplishment that most other juniors in Mexico have taken months to achieve. These guys have valuable experience in running similar mines around the world, and they are confident and knowledgable.
The reason I am so bullish on CS going forward is because the company looks like they will generate at least 50 cents per share of profit in the first full year of operation, if metals prices hang in around the current levels. That puts CS trading at just a 3 times multiple to forward earnings, which is stupid cheap for a lower risk operation. They have the ore body developed to allow for about 10 years at the current production rate, and the workings are stable. The mill is running efficiently, and it is in first class condition. They have strong management, and over 330 trained employees. The cash in the treasury is more than $20 million, and its growing every day as they roll in profits from the mine. This is an extremely low risk company that is trading below the market cap of some extremely speculative juniors with nothing but a hope and a prayer. In my mind it is a phenomenal bargain that the market has served up, and it will be corrected in time as CS runs to more than $5.
cheers!
COACH247
PS: personal disclosure - Capstone paid for my hotel and airfare to visit th project. The company has also been a long time sponsor of my website, with a paid advertisement on the homepage. I do not receive any form of compensation from the company for my comments or the articles I have written. I own 35,000 shares of the company.
_________________
I think this is another great acquisition for EXM. The deal is priced very reasonably, and structured so that most of the payments are back end weighted. This means they control the project and have the option to find a JV partner that will fund development and pay them a nice chunk of cash to recover their acquisition costs and retain a carried interest. EXM has already completed this type of deal in the past so they know what they are doing, and its an excellent strategy.
As for the property itself, Batopilas is a well known as a silver district. It looks like the particular property holdings in this deal have some high grade gold targets though, and the sampling data in the NR show encouraging values of silver and base metals.
I think this property is located to the North of MAG Silver's Don Fippi project where an intercept of 2,358 g/t silver was encountered across 1.7m earlier this year, so we may see some spec premium for EXM just on the 'close-ology' as a regional play.
As far as I am concerned, EXM is already grossly undervalued, but this latest acquisition just adds one more reason to be optomistic going forward. EXM is getting close to being the top property holder in Mexico among Canadian listed companies, and they have shown they are able to get deals done with reputable JV partners. We now have one more iron in the fire to potentially add greater value for shareholders. The market is not really paying attention but that is probably ideal for those who are buyers today.
cheers!
COACH247
EXMIN Stakes 50,000 Hectares and Acquires Gold-Copper Project in the Batopilas Region of Chihuahua, Mexico
VANCOUVER, BRITISH COLUMBIA, Oct 5, 2006 (CCNMatthews via COMTEX News Network) --
EXMIN Resources Inc. (EXMIN) (TSX VENTURE:EXM) is pleased to announce that it has staked a district scale concession in the Batopilas Mining district of western Chihuahua. The new concession, Huimayvo, covers approximately 50,000 hectares and completely surrounds the Batopilas camp, currently being explored by MAG Silver Corp., and several other mineralized areas nearby. On October 4, 2006, EXMIN entered into an option agreement to purchase 100% of two concessions that cover the La Verde prospect, which is located within the boundaries of the Huimayvo concession.
Craig Gibson, Executive Vice President of Exploration for the company, stated: "The Batopilas project is a great opportunity to explore in a world class mining district. The region fits EXMIN's criteria: there are regional scale structural zones and it has had significant historic production. We (EXMIN) were active in the area early enough to stake a large concession and pick up several relatively unexplored areas of strong alteration with potential to host mineralization."
La Verde Deal
EXMIN has optioned two concessions, La Verde and Ampliacion La Verde, covering approximately 600 hectares, for payments totaling US$ 520,000 dollars over 4 years for a 100% interest, as follows:
1). Payment of US$ 20,000 on signing (paid),
2). Payments totaling US$ 100,000 over 36 months at six month intervals,
3). Payment of US$ 400,000 in the fourth year in two installments.
There is no royalty or work commitment other than assessment work that is required by Mexican mining law.
The Targets
Several mineralized areas are present in the Batopilas district and surrounding areas. EXMIN's new concession surrounds several of these areas, including the Batopilas Camp, and partly covers the Tres Hermanos, Satevo and Cerro Colorado mineralized areas. The optioned La Verde concessions cover part of a regional scale structure that trends northwesterly from the Tres Hermanos mine, a former gold producer. According to the Consejo de Recursos Minerales (now the Servicio Geologico Mexicano, equivalent to the Mexican Geological Survey), the Tres Hermanos mine produced small tonnages of ore at a grade of 16.35 grams per metric ton (g/t) from 1916-1936, although total production records are not available.
The Tres Hermanos mine exploited a rich ore shoot that measured about 300 meters horizontally by 180 meters vertically, but only small shallow mines and prospects have explored the structure further north along an approximate six kilometers of strike length. Surface sampling by EXMIN along the structural zone exposed on the La Verde concession has yielded values of as much as 7.65 grams per metric ton (g/t) gold and 4% copper over 3 meters, and 5.67 g/t gold and 5.9% copper over 3.4 meters, as well as locally important silver, zinc and lead values (see table below). Systematic exploration of the structure is planned for the fourth quarter of 2006 and the first quarter of 2007.
The Cerro Colorado area is located several kilometers north of the Batopilas pueblo. Mining companies were active in the region at the same time as at Tres Hermanos, but production levels are not known. Small mines were developed on several veins as well as at least one large stockwork zone. Part of the area is covered by pre-existing, third-party concessions, but the large alteration zone extends for several kilometers on ground controlled by EXMIN. Ten rock samples taken within the alteration zone yielded anomalous values for the indicator elements antimony and mercury with generally low gold and silver values. More work is needed to identify discrete exploration targets.
EXMIN filed the application for the Huimayvo concession in late May. An official boundary survey of the concession is in progress. The final size of the concession when title is received may vary from the area on the application, depending on existing tenures within the acquired area.
Samples were prepared and analyzed by ALS Chemex at their labs in Mexico and Vancouver and generally consisted of 1-3 kg of material. Gold analyses were performed by fire assay with an AA finish, and silver and other elements were analyzed as part of a multi-element ICP package using an aqua regia digestion.
Dr. Craig Gibson, PhD., Executive Vice President of Exploration, is the authorized professional geologist for EXMIN Resources Inc. and the direct manager of all technical programs and information on the part of EXMIN.
EXMIN samples from the La Verde Prospect--------------------------------------------Sample Width Au Ag Cu Pb Zn m g/t g/t % % %----------------------------------------------------------------------------------------14 1.7 0.030 1.4 0.07 0.02 0.0315 1.3 0.810 37.1 0.31 0.03 0.0316 Dump 3.290 29.3 1.83 0.10 0.0917 2.1 1.350 4.4 5.33 0.01 0.0718 3.0 7.650 14.1 4.00 0.02 0.0719 3.0 0.190 5.2 4.04 0.02 0.09362 1.2 2.550 2.2 0.82 0.04 0.13363 1.0 0.270 2.2 0.49 0.10 0.07364 Dump 3.290 5.0 0.96 0.80 0.14365 2.0 0.054 10.0 0.43 1.56 0.68366 0.4 0.103 17.4 0.19 0.48 0.96367 3.0 3.230 4.5 0.10 1.46 1.10368 3.0 0.089 1.5 0.10 0.55 0.21369 3.0 0.341 3.5 0.09 0.99 0.15370 Dump 0.294 12.9 2.46 0.02 0.06371 Dump 0.068 4.8 2.63 0.04 0.04372 Dump 3.290 115.0 2.48 0.27 0.03373 3.4 5.670 8.9 5.92 0.03 0.08374 1.5 0.153 13.3 0.23 0.22 2.98375 0.4 0.169 17.2 0.46 1.08 9.01376 0.5 0.117 3.2 0.57 0.02 1.67377 2.5 1.045 83.2 0.18 8.45 4.80378 2.5 3.380 12.6 0.24 0.65 2.71--------------------------------------------
About EXMIN
EXMIN Resources Inc. (EXMIN) is currently focused on the exploration and development of precious metal properties of exceptional merit in the Sierra Madre gold belt of Northwestern Mexico.
Note: EXMIN Resources Inc. (EXMIN) has taken all reasonable care in producing and publishing information contained in this news release. Material in this news release may still contain technical inaccuracies, omissions or typographical errors, for which EXMIN assumes no responsibility. This news release may include certain "forward-looking statements" including but not limited to comments regarding predictions and projections. All statements, other than statements of historical fact, included in this news release, including, without limitation, statements regarding potential mineralization, exploration results, and future plans and objectives of EXMIN, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in documents filed from time to time with the regulatory authorities.
SOURCE: EXMIN Resources Inc.
EXMIN Resources Inc. Karl J. Boltz President & CEO 1-888-244-0304 EXMIN Resources Inc. Investor Relations 1-888-244-0304 Email: info@exmin.com Website: www.exmin.com
Copyright (C) 2006 CCNMatthews. All rights reserved
_________________
Hi LC!
I was able to with management today. Here are some of my notes and my own comments:
The mill is operating at a steady rate of 1200 tpd. They have mostly been processing lower grade ore up to this point while they fine tune the operations, and even so they reported today some impressive financial numbers just on the small amount they are currently shipping.
The plan is to start running ore from level 10 of the mine, which is much higher in grade. They anticipate recovery rates of 90% for copper, 75% for silver, 65% for lead, and 60% for zinc. Those are exceptional numbers for a poly-metallic deposit.
I had fully expected a steep learning curve for management once they restarted operations, and I am pleasantly surprised at how well they quickly ramped up to significant production without any delays or hassles.
The company has more than $21 million USD in the treasury, and that will surely lower the overall risk profile. The ore they are processing is of high grade such that even if we do get a significant meltdown in metals prices, they will still be profitable.
Three drills are still turning on the property, and more results can be expected as they work to extend the strike length of the vein. Given the trend of higher grades as they step out the drilling, I think we can be optomistic that the company will be able to continue establishing a larger mineral inventory, which currently supports more than 10 years of operations. Again, that contributes to a low risk profile for investors.
There are expansion plans to build an entirely separate recovery plant with a capacity of 3,000 tpd, in addition to current operations. That will drastically increase the revenue and make the bottom line even more attractive. Even assuming a forward cash flow estimate of only 50 cents for the first full year of operation, that still works out to a multiple of only 3 times at the current share price, which is stupid cheap.
My biggest concern is of a hostile takeover bid, but since management owns about 10% of the stock, and friendly institutions control more than 50% of the float, it is unlikely that will happen. So going forward I do see a steady increase in the shareprice as the positive operating results continue to build confidence that the company is for real. In addition, I expect the bearishness in the commodity sector is drastically overdone, and it would not surprise me at all if metals hold the current price range, if not head much higher. Sooner or later the market will figure out about CS and I think a share price of $7 - $10 is coming.
Most of the outstanding warrants were cashed in this summer, so the share price has very little overhang left to hold it back once this consolidation period is over. The future looks very, very good as far as I am concerned.
cheers!
COACH247
PS: Voluntary disclosure - A large chunk of my total PF is invested in CS shares, and the company is a sponsor of my website.
Hi Rossi!
I do not follow the logic of that post off SH. By making the cash more appealling, FR would not save a penny. They would be paying out a cash settlement for the shares to complete the acquisition. If more shareholders decide to settle for cash that would be unfavourable to FR, in my opinion. I think they would rather issue shares, since the FR float is still very tight anyway. Either way, the terms of the deal have not changed. The amount of shares or the amount of cash that FR ends up paying out will be exactly the same as before the stock plunged. Not one net penny will be saved.
I think there are many conspiracies going on in the PM sector, but I am certain that FR did not engineer this news just to trip up their own share price. The news had to come out one way or another and the merging of the two companies was announced months ago. If FR had surpressed the news until after the deal closed, then I could predict that lawsuits would have been the result.
I doubt the current slump in share price is anything more than an over reaction by skittish shareholders, and in hindsight it will probably just be a great buying opp.
cheers!
COACH247
Hi Ed!
I am just back home now after a trip to Mexico to tour a couple of mines so I am getting caught up. But one para from that NR you posted on EXM caught my eye: "Dr. Craig Gibson, executive vice-president of exploration for Exmin, stated: "We have been working on this deal for several months. Previous work by other companies has shown that a large gold mineralized system is present in the area. This acquisition is consistent with Exmin's strategy of acquiring strategic district-scale land positions where potential world-class projects can be developed." - ENDQUOTE
I think one of the companies Craig was referring to is Paramount Resources, who just reported hitting significant intercepts in all of their drill cores along a fault structure, with grades above 100 g/t silver across extremely deep intervals in the tens of metres. Here is the link to that news: http://www.stockwatch.com/swnet/newsit/newsit_newsit.aspx?bid=U-b006107-U:PGDP-20060913&symbol=P...
I believe that Paramounts San Miguel project is on trend with the EXM acquisition of San Rafael, and both run along the same fault system the Palmerjo Resources is developing. Garibali Resourcs (V.GGI) is also in the area.
cheers!
COACH247
Garibaldi Resources (V.GGI) and the Morelos Project:
I have been researching some info on the geology surrounding our Morelos Project, to see if there is reason to hope that we may have similar potential to what Glamis Gold has been able to accomplish at El Sauzal.
El Sauzal is a structurally controlled high sulfidation epithermal deposit. This is the only high sulfication deposit (at least economic) that has been discovered in this region, and it appears to be a structuraly high-level deposit, probably related to intrusive activity. It is one of the largest new deposits that has been put into production in Mexico over the last decade, and will likely be a significant producer for many years.
Glamis Gold is no stranger to takeover plays, having acquired El Sauzel from Francisco Gold, and I am sure they are well aware of other exploration projects in the vicinity. So the question for GGI shareholders comes down to will our company be successful to outline a similar deposit of economic interest to prompt Glamis to get involved?
I visited the GGI office during my roadtrip to Vancouver last month, and was able to see a large satelite photo with results of the ASTER imaging scan that was shot above our property holdings. The El Sauzal deposit was clearly shown on that photo, and there were several similar sized anomalies on our property holdings, indicating similar surface alteration.
The company has also completed soil sampling and stream sediment surveying to get additional data, on the premise that a large, near surface gold bearing system would also generate a halo of surface gold values from erosion. The data base from this work has defined several zones of interest, and that will be the starting point for our drilling program. The technical report filed for Morelos by GGI states: "a comprehensive exploration program for High Sulfidation epithermal gold deposits is warranted at Morelos."
High sulfidation deposits are created when you have strongly acidic residual fluids from a volcanic intrusion that migrate towards the surface. The acidic nature has the effect to leach gold from surrounding rock as it flows towards the surface, and then to alter the near surface rock into clay and sulphate minerals. The chemical reaction causes the transported gold to be deposited into the zone of altered rock, as a finely disseminated, lower grade deposit which can occur across a very wide area. So the use of satelite data and surface sampling and mapping are excellent tools to narrow down the large property area of Morelos to find the best targets.
I understand that we are going to start a drilling program this fall. The geologist that is directing the exploration is Carl von Einsiedel who may be familiar to some investors because he was also behind the discovery of the highest grading drill core in Mexico this year, at the Copalquin Project operated by UC Resources. So we have the right people in place, and solid potential in the property, with the ground work already done.
The number of smaller past producing mines on the property are an indication that we are in the right neighbourhood. Once we do the first round of drilling, if GGI is able to hit a few wide zones of lower grade gold then I think we will have Glamis knocking on the door with an offer to JV the property. That will instantly validate the approach of our management, and will likely result in a cash payment plus a nice bounce in the share price. We will then be in position to get work done on some of the other excellent projects the company controls, while owning a carried interest that is under exploration from a no-nonsense partner with a long history of success.
That is the blue sky scenario I see for GGI this fall. The market cap for the company is still very low in my opinion, given the high quality of the projects we control. I still think Mexico is going to be where its at for the junior exploration sector, and it seems we have the ducks lined up for a good shot at a nice run.
cheers!
COACH247
ECU Silver Mining Inc.: Press Release
TORREON, COAHUILA, Aug 08, 2006 (MARKET WIRE via COMTEX News Network) --
ECU Silver Mining inc. (TSX VENTURE: ECU) -
- A new raise in the "San Mateo" vein cut 12.42 g/t Au (0.40 oz/t) and 6,068 g/t Ag (195 oz/t) over 0.30 meter (1 foot);
- Higher assays than previously obtained for the A1, A2, A3 and A4 veins of the Santa Juana mine;
- Increase in quantity of veins and veinlets on level 18 indicates potential for bulk mining;
- New sulfide-rich intercept in the stockwork.
ECU Silver Mining Inc. (the "Company") is pleased to announce new assay results from underground development and mining in the Tres Aguilas sector of the Santa Juana mine from the A1, A2, A3, A4 and CC veins on levels 17, 17.5 and 18 as well as from the San Mateo mine.
San Mateo Vein:
Following the drifting going west on the San Mateo vein (see Stockwatch July 19, 2006), a raise is being driven to verify the vertical continuity of the vein. Initial sampling of the planned 40 meters raise, yielded 12.42 g/t Au, 6,968 g/t Ag, 0.75% Pb and 0.54% Zn over 0.30 meter. These excellent grades justify mining this sector of the San Mateo mine. Given that this is an entirely new area, the Company is extremely encouraged by these results as these excellent grades justify mining this new sector of the San Mateo mine which will only increase our future resource base.
Santa Juana Mine:
The samples in Table 1 below illustrate new information when compared to previously released data (see Stockwatch July 19, 2006). The samples from the A1, A2 and A3 veins on level 17 and the A4 vein on level 17.5 show better precious and base metals contents than what had been obtained previously.
The CC vein was cut on the new level 18 and showed good precious metals grades coupled with significant copper assays. Furthermore, level 18, which we just entered, has already shown to posses a host of thin veinlets and assays from the two that were sampled yielded extremely high silver assays with excellent copper and gold grades. There are two factors of importance conveyed by the results from these three veins:
1- The veins are getting extremely rich in precious and base metals, including copper, and
2- The presence of more veins closely spaced on this level will justify the evaluation of that sector for bulk mining by sampling the additional veinlets and the material in-between.
TABLE 1 - ASSAYS FROM UNDERGROUND WORKINGS
Vein Working Level #samples Width m Au g/t Ag g/t Pb % Zn % Cu %A2
Stope 17 12 0.26 15.64 1,135 0.27 0.11A3
Stope 17 15 0.29 12.04 1,083 0.74 0.32A1
Drift 17 14 0.68 7.06 296 0.41 0.34A4
Stope 17.5 18 0.62 15.83 867 6.67 8.30CC
Ramp 18 1 0.48 3.39 785 0.83 0.12 1.42
Veinlet Stope 18 1 0.05 9.00 4,480 2.93 0.34 5.57
Veinlet Stope 18 1 0.08 3.20 3,038 1.68 8.45 2.90
"The Company is delighted with the latest set of results from our veins systems given the superb grades. We cannot emphasize enough how significant a development it would be, should we able to prove with further work that this sector on level 18 could also be bulk mined. Given that we continually keep discovering new veins as we go deeper, it is becoming more and more likely that bulk mining methods will have to be used. With the Company already quite certain that a bulk tonnage operation will be required for the stockwork zone, to be able to add another area where bulk tonnage is also required will be a fantastic accomplishment for the Company at this early stage in our current exploration program. With additional drills in the process of being delivered, collecting further data to evaluate and expand our model will gain momentum" noted Michel Roy, president and chief executive officer of ECU Silver Mining.
The drilling program is on-going testing the stockwork. The visual observation of the core is displaying a marked increase in sulfides contents. Heavy mineralization was encountered in the first few meters and results are expected this week. They will be made public immediately after we receive them.
All widths are true widths. Samples were assayed at ERSA, in Torreon, Coahuila, and at SGS new facility in Durango, Durango, Mexico. Property specific quality control samples were inserted at regular intervals in the sample sequence.
Mr. Michel Roy, P. Geo., a "qualified person" within the meaning of NI 43-101, prepared the technical information disclosed in this news release.
ECU Silver Mining Inc is a junior Gold, Silver, Zinc and Lead producer in the prolific mining district of Velardena, Mexico where historically over 500,000 ounces of Gold and 250,000,000 ounces of silver have been mined. Full scale production began in May 2005 at the Company's Santa Juana mine. To ensure the Company is positioned for continued growth and expansion, and to take full advantage of the current record setting metals prices, the Company has a fully operational infrastructure in place, several months of planned production available from the current stopes, and ongoing exploration programs.
Statements in the release that are "forward-looking statements" are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially. We undertake no duty to update any forward-looking statement to conform the statements to actual results or changes in our expectations.
Head Office Rouyn-Noranda Quebec, Canada J9Y 1G9 Tel : (819) 797-1210 Fax : (819) 797-1214 Corporate Office J. I. Jimenez 663 colonia Los Angeles Torreon, Coahuila, Mexico, 27000 Tel: (01152)-871-717-8633 Fax: (01152)-871-718-5025
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Contacts: ECU Silver Mining Inc. Michel Roy cell: 011-52-871-727-1061 ecu@ecu.ca www.ecu.ca
SOURCE: ECU Silver Mining Inc.
mailto:ecu@ecu.ca http://www.ecu.ca
Copyright 2006 Market Wire, All rights reserved.
Mexico Mike article on Bandera Gold (V.BGL) from Investors Digest:
Bandera Gold Ltd: Just the tip of the iceberg
In the current bull market for junior resource companies, it seems like ‘the opportunity of a lifetime’ comes along about once a week. There will be no shortage of buying opportunities, in other words, but the smartest investors in search of those home runs would be well served to just wait with the bat on their shoulders until that real fat pitch comes across the plate, and buy only the best of the juniors. The companies that I look to add to the Mexico Mike Portfolio provide upside leverage to the bull market, yet trade at the lower end of the range in comparison to the peer group. Bandera Gold is junior miner that meets both criteria. A recent visit to its flagship property provided the opportunity for a thorough tour through the historic workings and a review of recently completed infrastructure improvements in the area. I am convinced that tremendous resources remain to be developed at the project, and this is the kind of company that will shine in the model portfolio.
Bandera has closed a deal to acquire a majority stake in the advanced stage Cinco Minas Project in Jalisco State, with Mexican joint venture partner Minera San Jorge S.A. de C.V. The terms of the deal require Bandera to fund the exploration and development expenditures in order to earn an initial 60% interest. While the property base controlled by the company literally stretches from horizon to horizon, the development plan is to focus just on the extensive resources identified in zones immediately surrounding the historical mine workings.
For example, a large volume of material estimated to be more than 2 million tons with average grades above 1 gram per ton gold and 160 grams per ton silver lies near the surface and is suitable for open pit mining, at the El Abra Area.
The same vein structure continues nearly a kilometer to the southeast of El Abra, where another priority target has been defined at the Cerro Colorado Area. There the vein system outcrops near the crest of the ridge, and it is therefore ideally suited for an open pit mine, owing to the lack of overburden material. Perhaps a million tons of lower grade material can be easily processed from this deposit, with economic grades averaging a gram of gold and 100 grams of silver per ton.
While the data for these deposits was compiled prior to the implementation of NI43-101 reporting requirements, the historical numbers have been verified by recent sampling efforts and found to be accurate. The project geologists have expressed an opinion that much of the material contained in these and other near surface deposits could be upgraded to compliance for reporting standards with a minimal amount of further exploration work as supervised by a qualified person.
It should be noted that these areas represent just the very tip of the iceberg in terms of the total resource that may ultimately be proven from this vein system. There are at least four other known deposits on the property with great exploration potential to add millions of tons to the total resource, including underground workings that extend some 800 metres below the surface. Past mine operators were only interested in extracting the highest grading ore shoots, and as a result extensive mineralization grading up to 1,000 grams per ton silver still remains in situ. More thorough exploration work to define resources at depth will be budgeted in future programs. In fact, the entire project area is so intensely mineralized that the problem becomes, where to start?
For Bandera, the immediate objective was to begin small scale production to process some of the material defined near surface that can be won through simply quarry methods. Remnants from past operations remain in stockpiles that will also be available as feedstock to be blended with the initial production run.
As many other newly producing junior mining companies in Mexico have demonstrated, there is a steep learning curve in the process to achieve efficient operations. Equipment and processing must be tuned to the characteristics of the minralization in order to reach optimum levels for gold and silver recoveries. By limiting its efforts to a small operation initially, Bandera expects to achieve efficiency through trail and error, and develop best practices that will sustain the company once the larger mill is constructed and it achieves full capacity operations.
In addition, since the company is committed to employ a local labour force, a smaller test mining operation allows for training of personnel to higher standards of proficiency and enables greater safety to be maintained at the start up phase. The company is currently producing at a rate of 20 tons per day, and this will be gradually ramped up to over 200 tons per day before the end of the year.
Once the test mining and processing plant are operating efficiently, positive cash flow that is generated will be used to underwrite construction of the larger capacity mill and recovery plant. It is estimated that the district could support operations with a capacity between 1500-2000 tons per day. Lower grade material will be crushed and processed through heap leaching, while the richer sulphide ores will be subjected to fine grinding and treatment by Pachuca Leaching to allow for the highest possible recovery efficiency. The company has secured the services of highly respected senior staff to manage the plant design, construction, and operations.
During several hundred years of operations, the mines of the Cinco Minas district once supported a vibrant community of over 20,000 people, before eventually succumbing to the economic challenges caused by a lack of capital funding and the severe slump in metals prices. The extensive mine workings currently sit dormant and the town has atrophied to its current population of perhaps 150 people who rely on subsistence agriculture to survive. The ambitious plan to restart mining in the area has strong local support, and the town will be a beneficiary of the wave of investment capital that will bring jobs, growth, and an improved standard of living for the entire community.
Government support for infrastructure improvements will reimburse the company for 66% percent of the capital expenditures, provided that local labour is employed. Road building will be necessary to allow access for heavy equipment and development on the mines. Much of the development work will be self-funding, as lower grade overburden material that must be stripped to gain access to the open pit deposits can be stockpiled and subsequently processed at a profit in a low cost heap leach operation. Waste rock will be separated and crushed, for use as aggregate material for road construction, and other infrastructure improvements.
There are intangibles to consider that also contribute to the strength of the play. The relationship between the JV partners is excellent. Having the cooperation of both companies acting with the shared objective to develop the project into a mid-sized producer is enormously important. Minera San Jorge contributes the knowledge accumulated from many years of exploration and mapping work on the properties, and a stable local presence in Mexico with established contacts and a thorough understanding of doing business in that country. Bandera generates access to capital, and a strong management team that has demonstrated the ability to successfully build a business.
Bandera represents a rare opportunity in the junior mining sector. In closing this acquisition, it basically inherited a late-stage project, with the potential for rapid advancement to full production. The terms of the deal ensure that the company has not been forced to issue a large volume of cheap shares in order to fund the grass-roots stage. Since Bandera has an exceptionally tight share structure, with only about 27 million shares currently issued and outstanding, there is greater leverage for shareholders as the value of the company grows. Most of the juniors that are currently in production in Mexico trade with market capitalizations in the range of $50 –150 million, so Bandera can certainly be considered under valued on the basis of that comparison point. If the company achieves their objective to establish low cost production, it could easily generate positive cash flow above $1 million per month, even with a modest operation. On a per share basis, that will translate into a hefty premium that should eventually be realized in the market value of the company, and there would still remain strong potential for growth well into the future.
We are in the midst of a powerful bull market for junior mining companies. Presented with the opportunity to cheaply accumulate a company with strong management and an exceptional project, the upside potential warrants consideration. Bandera Gold is exactly the type of company that I look for, a fat pitch! Case closed… I buy $10,000 of BGL for the model portfolio.
Hi LC!
Actually, I would consider myself lucky if I could find the cash to load up. I have only 3K of DIB, and wanted to buy more today but I had to jump in and add to my ECU at $2.61 first. I am hoping the market continues to suck for a while yet and then I can roll a few more bucks into DIB too.
I have nearly half a million shares of UC right now, and probably should sell a few to gain better diversification among some of the other strong juniors in Mexico, but I am a greedy SOB and not willing to part with a single share yet.
cheers!
COACH247
DiaBras puts out some great results and nothing... The market should have been all over this news, but its summer, and some people have become convinced the whole bull market was just a bubble that is about over, so not much response. Less than 50,000 shares traded today!
The big deal as far as I am concerned is the wide zone of high grade ore they hit just sinking the decline ramp to the previously defined manto at depth. That stuff is worth about $1590 per ton at current spot prices, based on the sample results. And it is right there ready to be put into production. That should make a nice bump in the top line next quarter.
cheers!
COACH247
Dia Bras Reports Recent Developments at its Bolivar Pilot-Mining Program in Chihuahua State, Mexico
MONTREAL, QUEBEC, Jul 05, 2006 (MARKET WIRE via COMTEX News Network) --
Dia Bras Exploration Inc. (TSX VENTURE: DIB) is pleased to report recent results for its ongoing development and pilot-mining program at its Bolivar property in Chihuahua, Mexico.
A ramp has been driven from Level 1 to Level 2 to access the down-dip extension of the Brecha Linda, a high-grade zone of zinc-copper mineralization that the Company has been mining since December 2005. The ramp has accessed high-grade mineralization on Level 2 and development of the zone is in progress.
Another ramp has been driven from Level 6 towards Level 7 with the objective of reaching the chimney-like high-grade Rosario 1, 2 and 3 and Rodolfo Zn-Cu zones approximately 20 meters below Level 6. Dia Bras has already mined these zones above Level 6. Another 50 meters of ramp is required to reach Level 7 and the first Rosario zone, and should be completed before the end of July. These zones continue deeper, as seen in Holes 159 and 168, which intersected the down-dip extensions of Rosario 2 and 3. These samples were assayed by Chemex.
------------------------------------------------------------------------------------------------------------------------------------------
Hole From To Length %Cu %Zn g/t Au g/t Ag Zone
---------------------------------------------------------------------
DB06B159(i) 86.0 94.0 8.0 0.29 12.41 0.10 6.75 Rosario 2
---------------------------------------------------------------------
DB06B159(i) 108.3 111.3 3.0 1.17 25.20 0.43 46.67 Rosario 3
------------------------------------------------------------------------------------------------------------------------------------------
DB06B168(i) 83.0 87.5 4.5 2.57 4.76 0.20 112.50 Rosario 2
---------------------------------------------------------------------
DB06B168(i) 91.0 93.0 2.0 0.66 14.90 0.05 13.10 Rosario 2
---------------------------------------------------------------------
DB06B168(i) 95.0 97.0 2.0 0.37 6.77 0.04 9.80 Rosario 3
---------------------------------------------------------------------
DB06B168(i) 126.5 131.0 4.5 1.24 2.13 0.06 24.40 Rosario 3
---------------------------------------------------------------------
DB06B168(i) 134.0 144.5 10.5 0.20 7.84 0.03 5.23 Rosario 3
---------------------------------------------------------------------
DB06B168(i) 153.5 161.0 7.5 0.83 2.56 0.02 16.64 Cu-Fe manto
------------------------------------------------------------------------------------------------------------------------------------------(i) Previously announced
While driving the ramp past Level 6.5 (1,960-meter elevation), a new zone of massive sulfide ore was encountered, which is 25 meters in length and varies in width from 3 to 5 meters. A raise being developed in this new zone has passed through 8 meters vertically and is still in ore. Assay results for three channel samples taken over 2-meter widths have been received and are shown in the table below. These samples were assayed using the AA method at the Company's lab at its Malpaso mill.
--------------------------------------------------------------------------------------------------------------------------------------
Sample % Zn % Cu g/t % Ag Pb
-------------------------------------------------------------------
707901 35.3 5.64 110 0.20
-------------------------------------------------------------------
707902 33.5 7.25 60 0.06
-------------------------------------------------------------------
707903 46.3 6.69 80 0.11
--------------------------------------------------------------------------------------------------------------------------------------
Horizontally, the Rosario 1, 2 and 3 and Rodolfo massive sulfide zones and this new zone extend 170 meters on strike and range from 3 to 10 meters in width. Starting next week, two of the Company's underground drill rigs will test the depth extension of this 170-meter strike length of untested high-grade chimneys.
"These results demonstrate the Company's ability to discover and develop additional high-grade ore for its Malpaso mill during this pilot mining phase of the Bolivar program. Given the sustained high prices for zinc and copper, the Company expects to maintain its positive cash flow during this pre-feasibility phase of work at the Bolivar property," stated Dr. Thomas L. Robyn, the Company's Executive Chairman.
Mr. Andre St-Michel, engineer and Chief Operating Officer and Executive Vice-President of Dia Bras, is the qualified person within the meaning of NI43-101.
About Dia Bras
Dia Bras is a Canadian mining and exploration company focused on precious and base metals in the State of Chihuahua, northern Mexico. The Company is actively exploring and developing its three key assets -Bolivar copper-zinc project, newly acquired Cusi silver mining camp and Promontorio property - in the world-renowned Sierra Madre mineral belt. The Company trades on the TSX Venture Exchange, under the symbol "DIB".
If you would like to receive press releases via email please contact info@diabras.com Please specify "Dia Bras press releases" in the subject line.
Forward-looking statements: Except for statements of historical fact, all statements in this news release, without limitation, regarding new projects, acquisitions, future plans and objectives are forward-looking statements which involve risks and uncertainties. There can be no assurance that such statements will prove to be accurate; actual results and future events could differ materially from those anticipated in such statements.
A map of the Bolivar Mine is available at the following address: http://www.ccnmatthews.com/docs/BolivarMine_Level6.pdf
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this press release.
Contacts:Dia Bras Exploration Inc.Thomas L. RobynExecutive Chairman(514) 393-8875 ext. 241tlrobyn@msn.comSun International CommunicationsNicole BlanchardManaging Partner(450) 627-6600nicole.blanchard@isuncomm.com
SOURCE: Dia Bras Exploration Inc.
mailto:tlrobyn@msn.com mailto:nicole.blanchard@isuncomm.com
Today we got the official news released with the updated resource estimate for ECU Silver, and I just wanted to share a couple of comments of interest. More silver is produced from mines in Mexico than any other country in the world, yet most of the juniors active in that country do not get much respect from the analysts. The reason is that mines there are typically narrow vein epithermal deposits, and despite centuries of production, such deposits are very difficult and expensive to document a large tonnage of resources in order to be compliant within NI43-101 standards. ECU is a case study of this, with very high grade silver, gold, and base metals values concentrated into veins that often only measure a couple of feet or less in width. There have been many respected analysts that either cannot understand their production model, or state doubts that the company can be profitable working in such a challenging operating environment.
This latest news release is tangible evidence that ECU has proven the experts wrong. The magnitude of the mineral inventory defined so far is astounding. Just counting the resources outlined in the indicated and inferred categories, the company has reported 7.7 million tons proven up. Since these numbers do not even include the latest results from their drilling program, it is very likely that the total tonnage for just the near surface, narrow vein system will eventually amount to over 10 million tons.
To put that in perspective, there are more than 85 junior mining companies currently active in Mexico, and many of them are now in production. ECU Silver now has defined more NI43-101 compliant tonnage of epithermal vein material than all of the other juniors in production put together.
During the ECU AGM this week, Michel Roy stated that the company would like to increase the production capacity at the mill and recovery plant, and indicated that a 1300 ton per day operation would generate upwards of $70 million a year in cash flow. Again, that number blows away the forward cash flow estimates of all the other juniors in Mexico, and even challenges some of the mid-tiers that are working larger projects. But consider that at even 1300 tpd, working full capacity for 350 days per year, it would take 17 years to exhaust the mineral inventory we have already defined. Again, there is no other junior miner in Mexico that even comes close.
Combined, all categories of resources detailed in the report amount to over 100 million ounces of silver equivalent. What is even more astonishing is that ECU did not even factor in a value of significant base metals production in those numbers, which currently account for about 30% of the production revenue. Also, the company used a cutoff grade of 150 grams per ton silver equivalence and does not even consider zones of the deposit for the resource estimate that fall below that grade. So the impressive numbers that we have to work with now can be seen as conservative.
All of the above would elevate ECU head and shoulders above the other juniors in Mexico, some of which are also excellent companies, but the real kicker in all of this is that we have not even touched on the home run potential represented by the bulk tonnage mineralization at depth. ECU reported wide intervals of stockwork mineralization, some of which is already accessable with current underground development. This stockwork zone could contribute well above a million tons of ore to the mix. Also, we have already had reported several wide zones of skarn mineralization below that. My assumption is that the skarn zone will prove to be enormous, since they have hit it with every drill core to punch down that deep, and since the grades they have been reporting continue to increase with depth. It is very unlikely in my opinion that the company would have hit the very best intercept at random in the first drilling program to test for it. Other skarn systems in that district have amounted to tens of millions of tons of mineralization, and I would suggest that the early indications are that ECU will hit at least as much, if not more, by the time they have put a serious drilling program together targeting deeper structures.
All of the information that is now on the public record should be enough to prompt the skeptics to take a good, long look at ECU Silver. The company is clearly the class of the field, and as they continue to build value for shareholders, the share price should increase to many multiples of the current range.
Cheers!
COACH247
Bandera Initiates Small Scale Test Production of Cinco Minas Project
Bandera is pleased to report that the delivery and set up of a pilot processing plant has taken place at its Cinco Minas project near Magdelana, Mexico. Testing of gold and silver mineralization from current mine dumps containing bonanza grade silver-gold ores, processing and testing of 3,000 cubic meters of untreated tailings left in the old mill agitation tanks when it was dismantled is slated to begin in the first week of July.
Processing of virgin ores from outcroppings and near-surface and new open pit cuts into deeper mineralization is also scheduled to take place. In addition to the pilot processing plant, the Company has taken delivery of portions of a larger processing unit that is being assembled to expand the productive capacity into the “intermediate” category as announced in its press release of May 29, 2006.
In preparation for the launch of test production the Company has sampled the tailings at 2 meter intervals across the tailings piles and is pleased to present the results in the tables below. When the mill closed in 1928, several thousand tonnes of tailings and crushed feedstock material were simply pushed over the bank to cover the old foundations once the mill was sold and moved. This resulted in irregular mounds of material that were subsequently covered by the vegetative growth. The refurbishing of the old mill site to provide the working envelope for the new mill complex required the tailings to be loaded by backhoe and trucked off site to a staging area nearby. The tailings were collected and piled from a rather large area in excess of an acre and were mixed with other rock in the process during the excavation, transportation and stockpiling process.
These fluctuations are understandable due to the changes in the historical production figures and the mixing of the tailings material during the stockpile process. We also note that these are samples of materials that have already undergone liberation and were considered plant waste at the time of production. Re-processing of these materials will only require screening and introduction to the new mill process. Bandera views these results as very encouraging as the indication is that this pre-crushed ore is suitable for heap leaching.
In addition and in concert with the test production the Company is expanding exploration activities for the next 30 to 60 days which will include further sampling of the tailings, dump areas, untested exposed surface and near surface showings and existing adits. Access to the 300 meter level of the El Abra mine has been achieved by opening up the San Diego adit to the Destajos level. Being able to sample and drill into the insitu resource from this level will expedite the conversion of the indicated and inferred resource to a measured category. Other exploration activities will include mapping and locating of both new showings as well as old mine workings.
The above noted exploration activities in conjunction with the planned test production are expected to increase the potential resource area which will serve to increase property value.
The technical information contained in this news release was collected, compiled and reviewed by Richard Munroe, B.Sc., FGAC, P.Geo., a qualified person under NI 43-101.
Bandera Gold Ltd. is a Junior Canadian Exploration Company whose corporate strategy is to build shareholder value by finding and developing overlooked and undervalued mineral properties in North America and South America. By partnering with an experienced mining and mineral exploration entity, the Company’s core focus will be the continued exploration and advancement of the Cinco Minas property in Mexico to production, exploration of the Gran Cabrera property in Mexico and the exploration of the Belmira property in Colombia.
On Behalf of the Board
Kelvin Williams
CEO
For further information please contact:
Kelvin Williams, President
(780) 465-4129
Web: www.banderagold.com
Or Micro Cap et al, Investor Relations at (877)642-7622
E mail: info@microcapetal.com
THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
_________________
UC Resources Ltd.: Visible Gold Intersected at Historically Productive La Soledad Target at Copalquin Property, Durango, Mexico
6/27/2006
TORREON, COAHUILA, MEXICO and VANCOUVER, BRITISH COLUMBIA, Jun 27, 2006 (CCNMatthews via COMTEX News Network) --
UC Resources Ltd (TSX VENTURE:UC)is pleased to announce that the drilling program on its Phase II exploration program at Copalquin is complete.
Management has been advised by the Company's geological consultants that drilling has now been completed at the La Soledad Prospect located approximately three-hundred (300) meters north of the La Cometa prospect. Two drill holes, DDH 06-06 and 06-07, were completed from a station located approximately one hundred and fifty (150) meters north of the mine workings at an elevation of approximately 1,080 meters a.s.l.
The La Soledad prospect is a gold and silver bearing, west northwest oriented quartz vein/breccia zone (steeply dipping towards the north east) that has been developed by underground workings on three (3) levels at elevations of between 1,010 and 1,170 meters a.s.l.
Historic mining records are incomplete, however, according to a technical report prepared by Wilkins, 1997, total production from the La Soledad Mine is estimated at 136,000 tons reportedly containing two hundred thousand (200,000) ounces of gold and eight million (8,000,000) ounces of silver. It is important to note that this estimate of the historic gold and silver production from the La Soledad Mine has not been verified by UC Resources and the reader is cautioned that this information is included for reference purposes only and should not be relied upon.
Drill hole 06-06 was drilled perpendicular to the La Soledad vein and at an inclination of fifty (50) degrees and was terminated when the hole encountered underground mine workings at a depth of one hundred (100) meters. DDH 06-07 was drilled on the same azimuth as 06-06 at an inclination of seventy (70) degrees and encountered the continuation of the La Soledad vein/breccia zone structure at a depth of between 110.0 and 116.8 meters. Drill hole 06-07 was terminated at a depth of 155.1 meters.
Preliminary drill logs indicate that the mineralized interval consists of white quartz and silicified, brecciated andesite, the presence of visible gold has been noted, and grey, silver bearing sulfide mineral identified as acanthaite. Gold mineralization appears to be concentrated in the central part of the mineralized zone and consists of scattered flecks of free gold measuring up to three (3) mm in size. The true width of the interval is estimated to be approximately 90% of the mineralized core length, and measures approximately 6.1 meters. Assay results are expected to be available in approximately two to three weeks.
The mineralized intersection in DDH 06-07 clearly shows that the mineralized zone at the La Soledad prospect is open at depth. This intersection is the first drill hole ever completed below the mine workings at La Soledad and it is important to note that potential strike extensions of this mineralized zone have never been tested. The drill cores are currently in safekeeping, and the Company is awaiting the arrival of an independent geological firm to verify the cores.
The technical information contained in this release was prepared by Carl von Einsiedel, P. Geo., who is the Qualified Person for the Copalquin Project.
The Company is pleased with the results of its drilling program, and once the technical data interpretation is complete, will resume its exploration program in late August or early September.
On behalf of the Board of Directors of UC Resources Limited,
Richard J. Hamelin, President/CEO/Director
This release includes certain statements that may be deemed "forward-looking statements". All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company's registered filings what are available at www.sedar.com
Garibaldi (GGI.V) is about to start an exploration program. I had a long chat with the president Steve Regoci this morning. I like the approach this company has taken, gaining control of 3 very large properties in Mexico, each adjacent to proven major discoveries by other companies.
It appears the Morelos Project will be the first priority for the company, and they have completed a soil and stream sampling program that identified several zones of interest. Surface sampling has yielded values between 1 - 16 g/t gold across an area about 1500m X 500M, which is pretty significant, so they are getting ready to commence Phase II and do a trenching program along some of the vein systems. Steve expects to have a news release out later this week to detail the program. The road access is very good, even though the property is remote, and water availability is not an issue. If they get positive results from the trenching this month, then I would imagine they will commence a drilling program.
As far as I am concerned, GGI has the look of a 'baby MAG' and trades at a very reasonable price multiple right now. I took an entry position in this company last week at 58 cents, and it is still very tightly held, so any discovery success should move the stock higher very quickly.
cheers!
COACH247
This is definately the best board I have come across to focus on Mexico junior mining stocks. I like to consider myself a specialist in that sub-sector, but much of the info I learn comes from here, so allow me to contribute my thanks to all that post here.
I think if we were to calculate the net gains for all of the Mexico juniors on a percentage basis, they would completely outperform the rest of the minnig sector, and all other markets. Just UC, ECU, EXN, GPR, and IPT must surely be some of the top companies in Canada this year for market gains.
I do not think people are aware yet of just how strong the group is, and in fact I think most investors are still clueless about the PM bull market. But as people start to figure it all out, the market performance for this group will be even stronger.
cheers!
COACH247
Hi Sez Me!
The website crashed because we got too many hits and it swamped the server. We have a new server now with more bandwidth, so the site should be up and running again next week.
cheers!
COACH247
Gotta love FR! Keith knows how to swing the deals, and this company is going places as long as he is in charge. There are not too many silver juniors that have the clout to raise $20 million in one swipe, and even then, FR is still far less diluted than most of the other players in the sector.
I have no idea what he will do with the money, but I can speculate... I have heard that there is a large silver-zinc mine that is up for grabs in Mexico, and that several other companies are going to bat to try and land the deal. It is a multi-million ounce producer currently, with big exploration upside. If Keith is on the short list to scoop that one up and add it to the other properties we control, then this will catapult FR into the first tier of silver producers. It will probably cost a lot of cash and shares to get the deal done. I know 2 other companies that are also trying to close the same deal. It will be interesting to see what happens from here. Perhaps the bought deal financing has nothing to do with any new acquisition, but I do think the timing to raise all that money now, when FR is already cashed up, suggests that something is coming.
Getting Sprott involved is not a bad thing either. They have done similar deals with other juniors, and they are patient shareholders that will lock up the paper for a long time. It is an endorsement on the value of the company to get one respected institution to line up for that much cash in one deal.
Congrats Keith!
COACH247