Replies to post #26134 on KAT Exploration Inc (KATX)

[B402]

Drill Baby Drill..Next Move..Eom

[Rick-UK]

KATX Summary of Current Opportunity

Below I have set out the major part of the findings from the DD I did to satisfy myself that KATX is a good investment. This DD was for my own use and I am simply offering here as a good starting point for others to do their own DD. It is definitely not investment advice, just my DD. Disclosure – I have bought and am holding shares in KATX.

Overview

KAT Exploration (KATX) is a Canadian mining exploration company on the brink of massive, MASSIVE success. KATX has filed no less than SIX claims, recently adding further substantial claims around two of its properties, attracted private investment of $5m ($1m now and $4m upon meeting investors’ criteria) and is (almost certainly) in partnership discussions with the world’s second largest mining company. They have also just released the full results from their Handcamp soil sample analysis which show very significant levels of gold as well as deposits of copper and zinc.

Here’s the exciting news – because they have not yet filed their NI 43-101s or announced the partnership, the current PPS DOES NOT REFLECT THE TRUE VALUE OF KATX and as such IMO KATX makes for a fantastic investment opportunity!

First I’ll summarise the two most important of KAT Exploration’s six claims and then I’ll review the company itself (thanks to Investor911 from $heff’s Station of Stocks and DD and KATX board moderator and to Er0ck, a KATX board assistant moderator and contributor, from both of whom I have plagiarised some of this content):

Claim 1: Handcamp

Handcamp is a very special and unique type of gold deposit known as a "Felsic" VMS deposit. World wide there is only something like 800 VMS deposits and only the best of these are "Felsic". According to the USGS, Handcamp is the highest grade VMS gold site in all of Newfoundland. Surface rock and soil samples show a level of gold FAR higher than any of the surrounding mining sites owned by other companies and to find these levels of gold in just the surface rocks implies FAR more gold in deeper deposits.

The full soil sample analyses results are now back from the independent lab and have been digitally plotted onto a map which can be seen here. These results are very exciting as they show up to 5.8g/t of gold as well as extensive deposits of zinc and copper.

KAT Exploration has recently added a further 5,311 acres to its Handcamp claim. A test drilling programme is currently being planned and details of this programme are expected to be released very shortly.

Claim 2: Lucky

Lucky is one of KAT’s copper claims and the reason why Lucky is so exciting is that on 23 November, KAT announced the results of initial sample and analyses for Lucky and by 11 December, VALE Inco, the world’s second largest mining company had staked claims all around it to an annual cost of $1m. Now why would a billion dollar company like VALE want to do that? :o) Are VALE and KAT in negotiations for a JV? KAT CEO Ken Stead says he “cannot answer that question”. A JV with a mining company like VALE is the Holy Grail for junior exploration companies like KAT. KAT is on the brink of an amazing partnership – but the news hasn’t been announced yet!

The Company

KAT Exploration is managed by brothers Ken and Tim Stead who have excellent tracks records and experience and between them own a controlling interest, making for a very safe and trustworthy investment. KATX is a fully reporting OTC with “Current” status on pinksheets.com.

• A/S = 730m with 500m maximum for common issuance (reduced recently from 3bn)
• O/S = 463m (no further dilution unless required for a JV with a mining company)
• There are 143m restricted shares
• Float = 320m (we can assume a lot of these are now in strong long hands)
• The company has zero debt
• The T/A is ungagged

Recent Events

• January 5th KAT meets pink sheets requirements and achieves “Current” status
• January 14th KAT massively reduced its A/S from 3bn to 1bn
• January 15th KAT secured $5m investment to fund operational support for the next 5 years
• January 19th KAT reduced its A/S from 1bn to 730m, appointed private independent consultants and announced its intention to dual list on an Asian exchange
• January 27th KAT discovers significant amounts more copper at its Lucky site
• February 1st KAT publishes “very exciting” gold results from initial sample analyses from Handcamp and promises completed sample analyses will be shown in full on the website in the near future. PR here
• February 8th KAT adds over 5,311 acres to its claim at Handcamp and 5,805 acres to its claim at Twi-Lite and states will be exhibiting at PDAC in March. PR here
• February 11th Ken Stead states in an email that he has “several mining companies” requesting to meet him at the PDAC conference in March. PR here
• March 1st KAT publishes the final test results for Handcamp and they are considerably better than expected, showing extensive deposits of gold, copper and zinc. PR here

Why might KATX PPS increase to around $2 to $5?

Junior exploration companies are worth pretty much nothing at all until they find file a claim, analyse what’s in the ground and file their NI 43-101 to prove it. Most exploration companies would be over the moon with just one good claim, but KAT has six! Not only that, but early sample analysis from Handcamp suggests KAT is sitting on an incredible amount of gold and recent activity around Lucky not only show the same thing for copper, but also hint strongly at a JV partnership with a world leading mining company VALE, who have staked massive claims around Lucky at a cost of roughly $1m in the first year. VALE would not be willing to spend this money if they weren’t seriously excited about Lucky, and Ken Stead “cannot comment” on whether he’s in discussions with them, and we all know what that means… KAT Exploration is therefore something out of the ordinary.

One year ago an exploration company called US Gold (UXG) were in a similar position to where KAT is now, with a similar share structure. They were trading at around 0.30 and were waiting on the results of test drilling so they could file their 43-101. Within weeks of filing their 43-101 the PPS went from 0.30 to $1.20 and a few months later hit $3.00. UXG’s best results were 2.9 g/t Au. By comparison, KAT’s initial sample analysis indicates 158g/t Au, 94g/t Au and 82g/t Au. Not only this, but as well as Handcamp, KAT has Lucky and four other claims as well. If UXG can hit $3.50 there is absolutely no reason why KAT cannot hit $4 OR MORE if we get a DOUBLE announcement – a 43-101 for Handcamp and a JV with VALE for Lucky.

It's very common for these type of companies to go from a few cents to multiple dollars on great drill results alone. This is because the NI 43-101 basically confirms exactly how much gold is in the ground and how much it's worth. So there’s no need to actually be mining it to make this stock go up, once people know exactly what they are sitting on and what it's worth, this will shoot up accordingly to reflect that.

My short term target PPS is $2 and I believe we could hit that once we get the test results back. Longer term, this could easily be a $5 to $10 dollar stock. They have six properties, two of which look to have massive amounts of gold, three of which look to have massive amounts of copper and at least one appears to have massive amounts of silver. So when you factor in all of the properties and the potential JV with VALE, this company "could" be worth quite a bunch of money. I expect KATX to continue a slow and steady rise with spikes on good new until the test drill program is complete.

Call to Action

Look at the list of recent events and draw your own conclusions, but I believe KATX to be a once in a lifetime investment opportunity. This is a fully reporting OTC with an open, transparent, communicative CEO and fantastic announcements imminent. It’s all there in terms of the provable DD and to my mind it’s a complete no brainer once you’ve done the research. Here’s where to go:

• Post from Er0ck about KATX valuation and the Handcamp gold opportunity: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46213134
• Post from Investor 911 about the Lucky/VALE JV partnership: http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46255277
• KAT exploration website: http://www.katexploration.com
• KATX iHub site: http://investorshub.advfn.com/boards/board.aspx?board_id=15632
• Pink Sheets listing: http://www.pinksheets.com/pink/quote/quote.jsp?symbol=katx#getQuote
• VALE Inco website: http://www.inco.com/
• Marketwire for press releases and news: http://www.marketwire.com

Top Ten Key Points

1. Two properties (Handcamp and Twi-Lite) returning very high and widespread g/t for gold in initial sample analysis
2. Another property (Lucky) with VALE (2nd largest mining company) staking every piece of land around it that they can get
3. A further property (Rusty Ridge) described by an independent geologist as being like Olympic Dam – the world’s 4th largest copper mine.
4. Up to five years funding in place ($1m now, up to $5m if conditions are met)
5. A number of mining companies requesting to talk to KAT at the PDAC in Toronto from March 7-11
6. KATX is a pinksheet with a great share structure, an ungagged T/A, pinksheets "Current" status and a CEO who is open and honest with his shareholders
7. Forward looking anticipation test drilling programme for Handcamp gold, copper and zinc claim
8. Forward looking anticipation of JV announcement for Lucky copper and REE (rare earth elements) claim
9. Recent additional claims made that enlarges its prospecting (and ultimately revenue generating) opportunities
10. Ken Stead is a CEO with excellent standing within the Canadian mining community

[Papalaka]

Then why are we only up 15%?

[alj14]

ErOck,

Thanks for your many posts today. Also, congratulations on the precision of your prediction that the company might issue a statement on the new sets of data, because you were only five minutes off, or slightly less. Your expectations were fulfilled.

The market may need time to grasp just how good these figures are, but it will get there bit by bit.

alj