Continued from previous post.............
IMO Ken decide to pursue the Investor financing route as opposed to diluting shares to raise the capital needed to proceed with a drilling program. He probably felt it was better to give a bigger stake to a few investors, than significantly diluting a lot of shareholders. The Investors saw enough excelent potential to stake a million to see the results of a limited drill program, whereby they will then fund the remaining drill program with the remaining $4 million.
With the additional $4 million of drilling they should be able to get another 65 or so holes drilled. At this point, they probably figure they should have enough data, to secure a JV on very favorable terms if the results prove what they believe it will. I believe these are the terms in simple terms. Buy some more proof for $1 million and investors will pony up another $4million.
Now for present value of KATX. UXG was at $4.50/share during the drill program which would equate to KATX at $1.50. This would give the investors some comfort that they could potentially see 10x return on there $1 million in the short term if KATX went to only $1.00/share, and much more if results meet expectation. UXG continue down to present $2.40 level as the results whil minable didn't reflex the mother load. IMO investors will be looking for much better results which if achieved would send KATX much higher. If the results are similiar to UXG you will probably see KATX drop back to .5 or less. IMO we will see KATX move up to the $1 - $1.5 level over the next 3 months with a majority of the move being in the second half of 3 month period.
One last bit of info form UXG regarding grab sample levels at the property next to the Tokin property. As you can see these are significantly less than KATX grab sample results, so things look pomising for the next few months at least.
METAL VALUE $2,200 PER TON*
170 SQUARE MILES OF CORTEZ TREND CONTROLLED
POSITIVE DRILL RESULTS
Denver, Colorado (June 12, 2007) - US GOLD CORPORATION (AMEX:UXG - TSX:
Keystone* adjoins Tonkin to the west and has characteristics similar to other Nevada mines that are associated with base metals such as Barrick/Rio Tinto’s Cortez Joint Venture and Newmont’s Gold Quarry. Earlier surface samples have returned up to 0.867 opt(29.67 gpt)......
