Growing at the Speed of Yale Resources
By Alex “The Guru” Large
I talked to the “man behind the curtain” at Yale Resources (TSX: V.YLL), Ron Shenton, to vet the company’s deal recently, and found that everything I’d read at Yale’s website, on Sedar.com and in other reports was the real deal.
Shenton has put together or stumbled across a major find in the world of management, with a stellar board of directors and Ian Foreman presiding over day-to-day activities as president, CEO and senior geologist on the company’s three projects in Mexico. The team’s growing, Ron told me, with the addition of a Mexican lawyer to the Vancouver office who is striking up deals on the ground there faster than the company has been able to in the past.
Here’s what Shenton has to say about the Yale team:
“What I like to look at is management. I know that’s what everyone says, but boy, do we have good management. Richard Hughes was with the original company that I took over as a shell. Do Dick was on the board, and he likes what we were doing, so he decided to stay.
“People talk about the “Hughes Effect” because Richard Hughes’ companies do so well. But Luca Riccio [who is also on the board] just got a 30 million dollar bought deal for Georgia Ventures, a molybdenum company. And he is an Ex-VP of Crystallex. Like the company or not, that is one of the largest gold deposits around with something like 13 million ounces of gold. So, David Hall runs Aurizon Mines, which is a six or seven hundred million dollar market cap with a producing mine in Quebec. Lindsay Bottomer works for Entrée Gold, and was ex-president of the Yukon Chamber of Mines. So you got some great guys here with a great pedigree here, working under one umbrella.”
I think that as investors in this sector we all agree that the management team behind a project is the most vital link in the chain of events that we hope will lead to a mine, or takeover bid down the road. These are the people who need the trust and confidence of a fickle market, they need the track record to raise funds, the connections to find the right projects, and the wherewithal to build real shareholder value in those projects.
We can safely say that Yale’s three projects – and what I like about them is that they’re all seeing consistent progress – are grassroots projects. This is reflected in both the share price and the shares outstanding. Yale’s trading at $0.285 (June 18, 2007) and issued 26 million shares. So they’re tiny, with tonnes of upside potential.
In less than a year, Yale has acquired 100% ownership of a property called Carol, and has two other joint ventures on projects surrounded by serious players. So let’s briefly go over the merits of those.
Zacatecas
Yale bought the option to earn 80% of four Zacatecas properties from Impact Silver (Trading at $1.53 on June 18, with several other properties in Mexico) in November last year, and in a recent press release, Yale announced it had completed the work required to earn 65% of three of the four properties. That was announced on June 11th, along with some narrow but encouraging high grade silver results, including 1,340 grams per tonne silver over 0.80 metres.
According to a press release describing two of the Zacatecas concessions: “The Salvador and Zacatecas properties are contiguous and host two main veins (with splays) that have silver grades that range from 100 to 1,410 g/t. The Salvador vein lies to the northeast and has been traced for 450 metres within the property. The Zacatecas vein has one subparallel vein and has little outcrop, but many shafts and dumps that indicate a strike length of at least 350 metres within the property.”
Zacatecas silver district is one of the most prolific silver mining areas in the world, with over a billion ounces historical production.
Urique
Urique may be more interesting to some investors for the fact of “closeology”, as some say, referring to the increased likelihood of finding a mine next to an existing mine. According one report, “Sandwiched between Goldcorp's two million ounce El Sauzal gold deposit to the south and Kimber Resources’ Monterde, with a reported 800,000 ounces gold and 45 million ounces silver to the north, Urique has been locally mined by the Spanish, but never using modern tools or technology.”
Yale has defined 10 targets on the 292 square kilometer project, with Cerro Colorado at the drill ready stage. That target is 2.5 kilometers long and has “multiple zones with over one gram per tonne (g/t) gold and over 32 g/t silver.”
Yale has mapped out three new targets on Urique, the La Mariscal, Mina Hueso and El Suaz. All have returned high-grade gold and silver samples, which, though not very wide, also cry out for further work, IMHO.
Carol
Last but not least is Carol, fully owned by Yale and which is a stone’s throw from Frontera Copper’s (TSX: FCC) Piedras Verdes copper mine – a 191 million tonne copper porphyry grading 0.36% Cu.
A piece published at Resourcex.com quoted Yale’s CEO Ian Foreman talking about the enormity of Piedras Verdes and its relationship to Carol. “It’s a huge deposit, a really large porphyry and we’re on the periphery of the porphyry – try to say that five times fast – and at Carol we’ve identified a body that appears to be just over a kilometre in length about 500 hundred meters in width. If that is all mineralized and has interesting grades, then it could turn into a significant project.”
Elsewhere the company announced that there were three targets at Carol: A copper-zinc-gold-silver skarn (Balde); a high-grade copper-zinc-gold-silver shear zone (Escondida); and an epithermal vein-hosted silver and gold zone (Epithermal). All have had extensive sampling and mapping work done with mineralization everywhere you can scrape two rocks together, judging from the press releases.
If you were at the Vancouver gold show last weekend, you may have noticed that Yale wasn’t able to attend, which is why I called Ron Shenton. Nevertheless, it was a tough slog trying to talk to anyone there – especially on Sunday. With the metals’ bull supercycle in full swing, these events are beginning to attract the more general of the general public. Who didn’t have a list an arm long of companies they wanted to talk to?
And wasn’t that Paul van Eeden, standing with a crowd around him, informing all that the bull market was at an end?! You wouldn’t know it from recent commodity reports: Russian gold production is down, as is South African, Australian and US production. And Canadian. Central banks are at it again around the world, too, selling off bullion – the age old attempt to shore up paper money every time it appears that gold will break past historical highs and throw into disrepute the already flagging “mighty” US greenback. And facts like those tell us one thing: It’s highly doubtful that this bull is anywhere near its end.
China’s growth, even if it drops by a couple percentage points, is massive. The Chinese government plans to quadruple its economy – its GDP – by 2020. Imagine that! A Stanford University report shows that this is an average of 7.2% growth per year. Google it: It’s quite astounding when you think of the implications. Demand for new vehicles in 2005 in China was 5.6 million and that was 12% higher than the year before. So add up all the new sinks in China, the cars, dishwashers, new water pipes and Bic pens – because “if it ain’t grown, it’s mined” – and you’ve got the recipe for demand, demand, demand!
What does that mean for exploration companies? It means that exploration companies like Yale Resources that have hit the ground running, with real brains and brawn and tonnes of upside, have picked the ideal time to build their portfolios and their teams.
This article is intended for informational purposes only and should not be considered as a recommendation to buy stock in any company. A fee has been paid for the creation and distribution of this article.
