Saturday 24th March 2018

Resource Clips

Year in Review Part 3

By Ted Niles and Kevin Michael Grace featured a number of companies in 2010. Here’s an update on six of them:

Commerce Resources Corp CCE:CA
(click for original article)

China controls 97% of world production of rare earths—minerals essential to a host of high-tech devices—and has recently reduced exports by 72%. This puts Commerce Resources in an enviable position. Its Blue River project in British Columbia has a resource estimate of 3.5 million pounds tantalum and 19.6 million pounds niobium and could go into production as early as 2013. But it is Commerce’s Eldor Project that’s in the spotlight; analyst John Kaiser describes it as “the most important new grassroots rare earth discovery since market interest in rare earths took off in 2009.”

Commerce reported most recently (November 25) results from Eldor of 1.95% Total Rare Earth Oxides over 364.3 metres, including 2.02% over 303.4 metres and 1.86% over 355.9 metres, including 2.04% over 262.1 metres. President David Hodge told in December, “It’s big at surface. It’s got great grades. It’s got a very high ratio of heavies to lights, considering it’s a carbonatite. And the fact it’s a carbonatite would suggest we’re going to get high recoveries. Eldor has a shot at taking over the world.”

Year in Review Part 3

Bullion Monarch Mining Inc BULM
(click for original article)

Bullion Monarch, James Morris declares, is “definitely undervalued.” That’s the sort of thing one expects a Chairman to say about his own company. In this case, however, there’s much to suggest he’s right. When Eurasian Minerals Inc made an unsolicited takeover bid of $1.11 per share ($43 million), Morris wasn’t alone in thinking the offer lacking. He told us in October, “We were in Toronto, and we met with a lot of brokers. One of them said, ‘Yeah, $1.11 isn’t fair value for just your royalty stream alone.’” Not typical of a junior miner, Bullion is impressively diversified. In addition to royalties, the company has two other aspects: exploration—with gold properties in Mexico and Brazil—and oil shale technologies. Bullion’s subsidiary, EnShale Energy, deals with the latter, focussing on Utah’s Green River Formation where, Morris believes, “We can produce oil at $30 a barrel.”

Since we spoke with Morris in October, Bullion’s share price has surged from the $0.70 range to, at the time of writing, $1.19. And the company announced October 28 its intention of applying for a listing on the TSX.

Eurasian Minerals Inc EMX:CA
(click for original article)

Eurasian Minerals is even more diversified: 97 projects over four continents. And this suits President and CEO David Cole perfectly. He told in December, “The truth of the matter is that most projects fail. So in order to be successful in our industry you have to manage the cost of failure, and a very powerful way to do that is to have somebody else pay for the exploration.” This is the prospect generation business model. Cole further believes that geological risk outweighs political risk—hence properties in the Kyrgyz Republic, Turkey and Haiti. He explained of the last, “We came into Haiti, and there was almost zero competition. Because of the perceived political risk we were able to go in and acquire a large package—1,100 square miles—for very little expenditure.”

Cole sees Eurasian going in one of two directions, “We continue to grow a portfolio of royalties and carried positions and ultimately become a takeover candidate for a royalty company,” or, “We simply grow the company into a major holder of mineral assets globally.” In the meantime, Eurasian continues to release results. Most recently (December 21) it announced assays from its Akarca Project in Turkey of 2.26 g/t gold over 62.1 metres and 3.39 g/t over 50.4 metres.

Timmins Gold Corp TMM:CA
(click for original article)

When spoke with Timmins Gold Corp CEO Bruce Bragagnolo in October he told us there were three things that made a good junior miner. “The level of competence and expertise of management. The production profile. And the potential for adding resources and reserves.” Check, check and check. Timmins Gold went public in 2006, and three years later had its first gold pour; and, as Bragagnolo points out, one of those years “was the worst market in history.” In spite of the company’s name—a tribute to Bragagnolo’s home town—Timmins Gold’s operations are in Mexico, where it is focused on its San Francisco Gold Project, a historic producer.

Back in October, San Francisco was predicted to produce 100,000 ounces per year for five years. Since then Timmins Gold announced (November 16) that is has updated the project’s mineral reserves by 28% and its resource estimate by 10%. Bragagnolo also hinted to us that in light of Capital Gold Corporation’s rejection of a proposed merger between the two companies—which he said had the “overwhelming” support of Capital shareholders—Timmins Gold was considering taking “affirmative action.” The company appears to have done just that in its press release of December 3 wherein it makes the case for Capital’s reconsideration of a merger of equals.

African Gold Group Inc AGG:CA
(click for original article)

When we spoke with President Mike Nikiforuk of African Gold Group in November, he was puzzled. “If you look at companies in our peer group that are trading at three and four times our market cap,” he said, “companies like Orezone or Volta, or more recently Keegan in Ghana, our results are far stronger intercepts of gold mineralization—better grade over bigger intervals.” He makes a plausible case. Leaving aside the promise of its Ghana holdings—which include 94% of the Asankrangwa Gold Belt, the remainder of which is in part covered by Keegan’s Esaase Project, itself boasting a resource estimate of approximately 2 million ounces—African Gold’s Kobada Property in Mali proves itself time and again. Since our interview a steady flow of results have come from Kobada, reporting most recently (November 30) assays of 1.03 g/t gold over 79 metres and 2.57 g/t over 64 metres, including 98.7 g/t over 1 metre. As Nikiforuk observed, “This is beyond economic grade over mineable width.”

And the market might be catching on. Since November African Gold’s market cap has increased from $45 million to $68 million. And Nikiforuk is clearly optimistic, as is reflected in the company’s November 23 announcement of “the most aggressive field program in our corporate history, commencing January 2011″ and its December 17 closing of a $12-million private placement toward that end.

Astur Gold Corporation AST:CA
(click for original article)

The Salave Gold Project in Spain’s Asturias Principality is ripe for the mining. While Salave has one of the largest unmined gold deposits in Europe, the previous owners, Astur Gold President Cary Pinkowski explained to us in December, had several marks against them. “They were going to build a 650-metre open-pit right on the coast… They were going to move the workers in from elsewhere and wouldn’t be hiring any locals,” and “They didn’t do any social licence work whatsoever. There were no one-on-one meetings, no group meetings, nothing like that.” So the prospective pit size has been reduced, local labour will be employed, and Astur Gold has been using its “modern Canadian social-licensing skills and apply[ing] them to Spain.”

The Salave Project has a mineral resource estimate of 1.7 million ounces gold measured and indicated and 338,000 ounces inferred. But more important, Pinkowski says, the company is “getting majority support in favour of the mine right now. I want to see us in the construction phase in two years. If we do get permitted this month, it could be as little as 16 months.”

(Part 1 of Year in Review)

(Part 2 of Year in Review)

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