Mega Precious Metals Inc. (fka MPRXF)

[Tommy]

$MPRXF - $MGP.V - Byron King Update

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February 8, 2013
Mega Precious Metals

Far to the north and east of Nevada, Mega Precious Metals (MGP: TSX-V) released news from its gold development effort at Monument Bay, Manitoba. I've mentioned, in previous articles, that Mega has developed a fast, effective, low-cost means of identifying new gold-bearing zones.

The Mega technique is based on the intriguing geochemical fact that gold mineralization, at Monument Bay, is strongly associated with tungsten, in the form of a mineral called Scheelite. Basically, Scheelite fluoresces under ultra-violet light (UV). So Mega takes drill-cores, and illuminates them with UV. When the UV reveals Scheelite, it's about 99.9% certain that there's gold as well. This is a quick, reliable means for Mega to target its funds on gold assays, and focus on finding the high-value material and zones.

It helps that previous operators, at Monument Bay, drilled many kilometers of core, which is racked and stacked, and all available for Mega to examine. This "old core program" (OCP) saves literally millions of dollars in what would be required to drill things today. So Mega has been systematically going through the old core (of 2.4 billion year old rocks, speaking of "old"), and performing UV inspections for Scheelite.

If there's Scheelite, then there's gold. And now, it's turning out that Scheelite is significant, to the point that Mega's "gold" play may also be a tungsten play as well. There are large zones, at Monument Bay, with up to 2% tungsten, which makes for excellent ore. Elsewhere in the world, people (many of whom are called "Chinese") mine grades as low as .1% tungsten.

Mega shares are trading in the 20-cent range, which makes for a two year low. In other words -- and as I've discussed many times, in previous notes -- it's a brutal market for mineral developers, meaning companies that are spending funds and not generating cash flow. Still, with Mega, the value is there for the brave -- gold, and now tungsten.

Mega has done an excellent job of creating an extensive gold resource, now moving north of 2 million ounces at Monument Bay. Plus, let's add in the "new" news of the tungsten angle. It seems that, with every announcement, Mega differentiates itself from the large group of peer-developers. Mega is becoming more attractive as takeover bait, or absent that, it's setting up to build a mine on its own initiative.