Ron Struthers wrote today (PZG):
Quote:
What I see as a buy of a lifetime and also a take over target in 2008 is one of my favorites, Paramount Gold and Silver – PZG, recently $1.70. I have been quite surprised by the recent weakness in the stock, even with the year-end selling. There is definitely a seller in the market for some reason. I have followed their exploration closely and it looks to be going very well, but I was concerned whether I had missed something. I got a hold of Bill Reed, who I have come to know quite well over the years and have been impressed with his honesty and the fact he is a quite conservative geologist and also very experienced.
He is not afraid and is willing to warn on anything he does not like or looks inferior. In fact earlier in the year he warned me about Tara Gold's Las Minitas project that the historic data was probably fraudulent. Hecla mining drilled 3 holes in the late 1990s to verify the data and found nothing and lo and behold Pershimco - PRO, Tara's recent former JV partner found the same thing. It was one reason that I have been recommending Paramount over Tara beside the better valuation Paramount has based on the San Miguel project. I think Tara is also over sold now, but still has down side risk. Anyway, my concern is the San Miguel project.
Bill Reed is no longer running the detailed exploration program which is now been handled by Larry Segerstrom, another very well qualified geologist that over saw exploration at Freeport-McMoran, but Mr. Reed is still over seeing the exploration and is keeping a pulse on the project. Paramount has been doing a lot of drilling as part of a 50,000 meter program. I put a blunt question to Mr. Reed and that was - Do you see any reason why the next resource estimate will not go over 100 million ounces silver? Mr. Reed said he did not see any problem and that was a very obtainable target.
Even if one was to be very conservative and say they 43-101'd just 73 million ounces like Orko. Orko has a market cap of $162 million which is more than double Paramount's current $77 million market cap. Based on only 73 million ounces, the stock should more than double to over $3.50 a share.
However, I have every reason to believe they will go over 100 million ounces and this would put Paramount in the big league with a superior valuation. The brokerage and fund analysts would no longer be able to ignore the stock like they have done so far. It would be far too embarrassing if they do not report on a major discovery. There is no reason to believe that Paramount cannot make a similar discovery as Palmerajo and a similar valuation. I will remind you once again that Palmerajo was just bought out for about $1 billion based on a 149 million ounce 43-101 silver equivalent measured and indicated resource (and additional 100 M ounce silver eqv. inferred).
When Paramount 43-101s over 100 million ounces it will be about half way to Palmerajo, and only half the market cap would be $500 million or over $10 per share. Going over 100 million will make Paramount a take over target in 2008 and it will still have a lot of exploration potential. As of this date they have still only done shallow drilling and finding lots of silver and gold, there is all kinds of potential at depth still and is why I think this discovery can rival Palmerajo.
While perhaps the analysts and news letter writers have been ignoring Paramount, the major mining companies have not, with many already visiting the project and others going on site in early 2008. They all have deep pockets and are willing to pay what a project is worth. Imagine a major stepping in and buying this (I doubt it would happen until after the next 43-101 which will probably be in the next few months), but imagine if this happens in several months at between $5 and $10 a share and not one analyst or major newsletter has covered the stock. I have never seen this happen, so it is only a matter of time before everyone jumps on the band wagon, in the meantime, I have little doubt this is one of or maybe the best buy out there among advanced exploration stocks.
Look at the management team, over 325 years combined experience, these types don't associate with losing stories, but winners!
