2nd News for Today!
July Copper futures closed up 10 cents Thursday at $4.43 per pound, making exploration companies like Red Metal Resources Ltd. (OTCBB: RMES) cheer, especially considering the company just added its fourth Chilean property to its stable.
In a press release issued Wednesday, Red Metal Resources President Caitlin Jeffs said, "We believe that we have assembled one of the most attractive, best-positioned exploration packages in the belt."
Ms. Caitlin, a geologist who also heads up a 30-man geological consulting firm in Thunderbay, ON, was referring to the prolific Candelaria Iron Oxide Copper-Gold (IOCG) belt in Chile's III Region, which is home to Freeport-McMoRan's Candelaria Mine, Anglo American's Mantoverde Mine, Teck's Relincho Project and Andacollo Mine and Far West's Santo Domingo deposit. Those five projects are reported to hold nearly 2.5 billion ounces in copper and copper equivalent.
While that might produce a complacent outlook towards RMES, you might look closer as the 'Five' surround Caitlin's company's properties.
Calling its latest acquisition a "highly prospective exploration project in the Candelaria IOCG belt," Caitlin revealed the terms as being reasonable and well within Red Metal Resources current capital reach, having raised $2 million in April through a private placement managed by Brimberg & Company of New York. At the time of the financing, Caitlin stated that, "This funding will enable us to undertake exploration programs to further our projects which we believe have the potential to add significant value to our company."
RMES announced Thursday morning that its drilling program at its Farellon Project was underway with plans to drill approximately 2000 meters. It marks the first time in two years that Red Metal Resources has conducted any exploratory work on its Farellon Property. But at the time copper prices averaged $2.90 per pound, having climbed steadily from $1.40 per pound in January. Now with copper well over the $4.00 per pound mark, building up its Farellon resources only makes sense.
In the fall of 2009 Red Metal Resources had drilled five holes for a total of 725 meters and hit good results on every hole. Now it looks to capitalize on the near 100% gain in copper prices and push a more aggressive exploration strategy -- still well within the capital constraints of its second quarter private placement.
Should copper prices continue to hold at current $4.40 per pound levels and Caitlin's geological team can again produce results from its 2011 drill program, further financing is likely.
RMES' shares closed up 4 cents Thursday at $0.55, nearing its 52-week hi of $0.59.
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