Monday, August 15, 2005 11:07:21 PM
Looking for gold in all the right places
By Kevin Kerr, MarketWatch
Last Update: 2:51 PM ET Aug 12, 2005
http://www.marketwatch.com/news/newsletters/default.asp?siteid=mktw&dist=LAtab
VANCOUVER (MarketWatch) -- Throughout time gold has been coveted by royalty; a regal metal prized in times of both strife and prosperity.
As the price of gold seems to be making a reach for $500 an ounce again, we want to take a look at what the future may hold for this market.
In my travels I'm fortunate enough to visit locations all around the world. Few are as majestic as Vancouver, British Columbia, Canada -- a true gem of its own.
I'm in Vancouver speaking at an investment event called the Agora Wealth Symposium, and one of the hot topics on the resource front, as always, is gold!
In search of elephant country
There are few places left on the earth as remote as some of the areas in the Northern Canadian territories. The "new frontier" is virtually untouched and offers a wealth of minerals and other resources, but no elephants.
However, for those in the mining industry that refer to this area as "Elephant Country," they're looking for something BIG! One of these progressive exploration companies is Commander Resources (CMD) . Commander is a junior mining operation and its stock trades on the Toronto Venture Exchange.
Now don't get me wrong, Commander isn't Newmont Mining, or Placer-Dome or Cambior. This is a micro-cap exploration company with around $300,000 in annual revenues and a market cap of C$7 million. The stock recently traded at 21 cents a share on the TVE. To put it in perspective, the average daily volume in the past three months has been about 26,000 shares per day. Some days, the volume is considerably less. Fair warning, this is a speculative -- very speculative -- stock.
Ok, now the good , no, actually great news! Commander may be sitting on one of those so called "elephants" right now.
Commander's chief executive Ken Leigh says that this region of Canada has areas, "that have never even been walked on." And there are still huge deposits yet to be discovered. One such place where Commander is sinking its drills in deep is a place called Baffin Island.
Digging in for profits
Baffin Island is a barren place and not tourists' radar screen at all. Baffin is one of the largest islands in the world, in one of the most unspectacular places on Earth -- unless you're a geologist.
During the cold war era, Baffin Island was part of the "Defense Early Warning" System, or DEW line -- a chain of airbases and radar stations built to warn the U.S. and Canada of sneak Soviet missile attacks over the North Pole.
The DEW line is as much a memory as the Soviet Union. But the giant airstrips built to supply the military bases still remain. And Commander is using those airstrips to fly in supplies so it can prospect for gold.
Bottom Line: Commander is finding it.
The Golden Rule: He who has the gold makes the rules
As I interviewed Leigh, I realized that he didn't just wake up yesterday and say "I think I will go dig for some gold." Hardly. He spent 13 years as a geologist for Canadian zinc miner Teck Cominco.
A no nonsense down to earth CEO, he emphasized that it's not just enough to find minerals -- you have to be able to make money off what you find.
"At the end of the day, the business we're in is to grow," Leigh says. "We want to find commodities to feed the market." From everything I saw, the dinner bell may be about to ring.
However, some critics might say that Commander knew where to look the whole time. Gold was originally discovered by global mega-miners BHP Billiton and Falconbridge accidentally when they were prospecting for zinc, silver and nickel.
Oddly enough they had no interest in the gold so they took a pass. Meanwhile Commander stepped in and took it off their hands. Not bad!
As a result Leigh indicated that what his company is sitting on what could be comparable to the massive Homestake mine, which produced 40 million ounces of gold.
According to reports, it's the same kind of geologic formation, and the samples -- so far -- have shown the deposits to be free-milling gold, the kind that can be dug up and ground right out of the surrounding rock.
Since it's free-milling gold, if the mine pans out the way Leigh thinks it will, they'll be able to make gold bars right on the premises. This cuts down expenses enormously and would make them the envy of the mining industry.
But Leigh is no pie-in the-sky CEO. He acknowledges that there's always risk. However, on a risk/reward basis Commander has a lot of upside since it's only trading around 23 cents Canadian, and Commander has many other mineral veins it hopes to grow too.
Finding the end of the rainbow
Commander is just one of many mining companies in this region looking for the elusive pot-o-gold, but they seem to exemplify the best of what's happening in the industry right now -- and they're situated to benefit directly from surging prices from gold and uranium.
As these minerals become more challenging to find, companies as progressive as Commander are likely to prosper in a big way. Investors too.
Once the new frontiers like Baffin Island are gone there will likely be no more "last frontiers" to explore .
Leigh made me a believer, there may well be a rainbow and it looks like it ends on Baffin Island.
By Kevin Kerr, MarketWatch
Last Update: 2:51 PM ET Aug 12, 2005
http://www.marketwatch.com/news/newsletters/default.asp?siteid=mktw&dist=LAtab
VANCOUVER (MarketWatch) -- Throughout time gold has been coveted by royalty; a regal metal prized in times of both strife and prosperity.
As the price of gold seems to be making a reach for $500 an ounce again, we want to take a look at what the future may hold for this market.
In my travels I'm fortunate enough to visit locations all around the world. Few are as majestic as Vancouver, British Columbia, Canada -- a true gem of its own.
I'm in Vancouver speaking at an investment event called the Agora Wealth Symposium, and one of the hot topics on the resource front, as always, is gold!
In search of elephant country
There are few places left on the earth as remote as some of the areas in the Northern Canadian territories. The "new frontier" is virtually untouched and offers a wealth of minerals and other resources, but no elephants.
However, for those in the mining industry that refer to this area as "Elephant Country," they're looking for something BIG! One of these progressive exploration companies is Commander Resources (CMD) . Commander is a junior mining operation and its stock trades on the Toronto Venture Exchange.
Now don't get me wrong, Commander isn't Newmont Mining, or Placer-Dome or Cambior. This is a micro-cap exploration company with around $300,000 in annual revenues and a market cap of C$7 million. The stock recently traded at 21 cents a share on the TVE. To put it in perspective, the average daily volume in the past three months has been about 26,000 shares per day. Some days, the volume is considerably less. Fair warning, this is a speculative -- very speculative -- stock.
Ok, now the good , no, actually great news! Commander may be sitting on one of those so called "elephants" right now.
Commander's chief executive Ken Leigh says that this region of Canada has areas, "that have never even been walked on." And there are still huge deposits yet to be discovered. One such place where Commander is sinking its drills in deep is a place called Baffin Island.
Digging in for profits
Baffin Island is a barren place and not tourists' radar screen at all. Baffin is one of the largest islands in the world, in one of the most unspectacular places on Earth -- unless you're a geologist.
During the cold war era, Baffin Island was part of the "Defense Early Warning" System, or DEW line -- a chain of airbases and radar stations built to warn the U.S. and Canada of sneak Soviet missile attacks over the North Pole.
The DEW line is as much a memory as the Soviet Union. But the giant airstrips built to supply the military bases still remain. And Commander is using those airstrips to fly in supplies so it can prospect for gold.
Bottom Line: Commander is finding it.
The Golden Rule: He who has the gold makes the rules
As I interviewed Leigh, I realized that he didn't just wake up yesterday and say "I think I will go dig for some gold." Hardly. He spent 13 years as a geologist for Canadian zinc miner Teck Cominco.
A no nonsense down to earth CEO, he emphasized that it's not just enough to find minerals -- you have to be able to make money off what you find.
"At the end of the day, the business we're in is to grow," Leigh says. "We want to find commodities to feed the market." From everything I saw, the dinner bell may be about to ring.
However, some critics might say that Commander knew where to look the whole time. Gold was originally discovered by global mega-miners BHP Billiton and Falconbridge accidentally when they were prospecting for zinc, silver and nickel.
Oddly enough they had no interest in the gold so they took a pass. Meanwhile Commander stepped in and took it off their hands. Not bad!
As a result Leigh indicated that what his company is sitting on what could be comparable to the massive Homestake mine, which produced 40 million ounces of gold.
According to reports, it's the same kind of geologic formation, and the samples -- so far -- have shown the deposits to be free-milling gold, the kind that can be dug up and ground right out of the surrounding rock.
Since it's free-milling gold, if the mine pans out the way Leigh thinks it will, they'll be able to make gold bars right on the premises. This cuts down expenses enormously and would make them the envy of the mining industry.
But Leigh is no pie-in the-sky CEO. He acknowledges that there's always risk. However, on a risk/reward basis Commander has a lot of upside since it's only trading around 23 cents Canadian, and Commander has many other mineral veins it hopes to grow too.
Finding the end of the rainbow
Commander is just one of many mining companies in this region looking for the elusive pot-o-gold, but they seem to exemplify the best of what's happening in the industry right now -- and they're situated to benefit directly from surging prices from gold and uranium.
As these minerals become more challenging to find, companies as progressive as Commander are likely to prosper in a big way. Investors too.
Once the new frontiers like Baffin Island are gone there will likely be no more "last frontiers" to explore .
Leigh made me a believer, there may well be a rainbow and it looks like it ends on Baffin Island.
T
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