The Kemess North feasibility study is due next month. I know, they still have a year's worth of gold hedged, but even still, as long as copper keeps doing what it's been doing, it's hard to make a bearish case for NXG...
Canyon Resources a speculator’s dream By: Tim Wood Posted: '23-APR-04
ZURICH (Mineweb.com) --Canyon Resources [CAU] is shaping up to be one of the best speculative gold bets this year as it campaigns to overturn Montana’s anti-mining regulations that effectively sterilized its 10 million ounce resource at the McDonald project.
Canyon’s stock price has risen in recent months on increasing confidence that it will prevail come November 2 when citizens will vote on a new ballot initiative, dubbed I-147.
Speaking on the sidelines of the European Gold Forum here, Dr Richard de Voto told Mineweb that extensive polling makes it evident that Montanans want mining income and jobs. The percentage of respondents in favour of overturning the previous legislation that banned the use of cyanide in open cut mines rises strongly as they are given more information and facts.
De Voto won’t reveal what the campaign budget is for strategic reasons, but it will be sizeable with the local mining industry kicking in funding and in-kind support along with several other lobbies. The campaign will focus on mining to best standards and the economic benefits to a state that has fallen to the bottom of the rankings on several measures.
Whilst the industry systematically increases awareness about the safe use of cyanide in mining, Canyon has undertaken a comprehensive redesign of the McDonald project with the aim of guaranteeing citizens of the state that there will be no harmful effects in future.
Among those changes are facilities relocations that disturb less ground and infrastructure, and design improvements to ensure that all fluids are captured, whilst depleted leach pads will be covered with an impermeable synthetic layer. This is even though the ore at McDonald is entirely oxidised and won’t create acid drainage or emissions.
McDonald was in the process of being permitted for production when it was stymied by a 1998 ballot initiative launched by environmental special interest groups. At the time, companies were prevented from campaigning against the initiative because they were deemed conflicted. This was later ruled unconstitutional since it breached free speech provisions, paving the way for this year’s industry driven campaign.
Should Canyon fail, it still has recourse to the courts where it is still awaiting a ruling from the Montana Supreme Court. Should the company not succeed there it can appeal to a federal court where de Voto is more hopeful because the judges are appointed rather than elected.
That legal gambit would seek damages in the order of $500 million though the figure could be adjusted higher since gold prices have risen in the interim; far higher than the sub $300/oz level the valuation was derived from.
Even though Canyon has appreciated in value lately, it is still something of a giveaway at around $7 per resource ounce – far lower than its competitors and with a much more significant resource base than nearly all of them. On top of that, McDonald has significant exploration potential and its dollar cost base makes it that much more appealing for a potential acquirer.
If McDonald is put back on its feet, it could develop into a 445,000 ounce per year producer, operating for 14 years at a total cost of $248/oz.
Investors should monitor polling results, where they become public, to get a better idea of the potential risk of getting in and holding on. With the price already having kicked up there is considerable downside risk, but you can’t afford not to be in the stock if it succeeds and timing will be everything – it is likely that an indicative result will be available before the election.
***On 02/26/2004, basserdan's gold picks/responding to a question of what his "favorite jrs. for the next 18 months" are: "In no particular order........ here are fifteen that are still relatively inexpensive." - from #msg-2471084
GBN - was 1.79, now 1.13 -36.87% WHT - was 2.65, now 3.11 +17.36% EGO - was 2.87, now 2.71 -5.57% NXG - was 2.15, now 1.52 -29.3% WTZ - was 7.39, now 8.34 +12.86% GSS - was 5.62, now 3.67 -34.70% CAU - was 5.05, now 1.03 -79.6% BGO - was 3.15, now 2.82 -10.48% GRZ - was 3.65, now 4.20 +15.07% MNG - was 2.12, now 1.08 -49.06% CDE - was 7.02, now 3.52 -48.86%
Here in #msg-1883788 (on 12/6/2003) - basserdan defends MYNG, MYNG the day before (Friday) closed at .225, MYNG currently trades at .04! -82.22%
basserdan, is officially the biggest bull on gold stocks I've ever seen! lol.
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