The arrival of spring seems to have set off a flurry of interest in mining and exploration companies, though nervousness in the high-tech sector is perhaps the more likely reason why some investors are taking refuge in bargain-priced resource stocks. Whatever the case, mining analysts and newsletter-writers are finding more to talk about and recommend than was the case a year ago.
Canaccord Capital’s Graeme Currie gives a nod to
Drilling and underground development are under way at Snap Lake, with the decline advanced about 310 metres of a planned 1,200-metre target. A 600-metre drift will then be driven, to be followed by the taking and processing of three separate, 2,000-tonne bulk samples.
A prefeasibility study has projected capital costs for a combined open-pit/underground mine at $269.4 million, based on an indicated and inferred resource of 12.6 million tonnes grading 1.75 carats per tonne. This is equivalent to more than 22 million recoverable carats at a revised value of US$118 per carat.
Currie cautions that the project still faces several risks, including “the ability of the partners to act as a seamless team” in light of the ongoing legal dispute between Winspear and Aber over their respective interests in the project. “Most important of all the risks, we consider it imperative that carat grade and valuation reported to date be confirmed,” he notes.
He also cites permitting difficulties as a possible risk.
Across the country, in Toronto, Glenn Brown and Ed Flood of Haywood Securities have given a thumb’s-up to
“In the past year,” Brown and Flood write, “Great Basin has found a swarm of east-west trending, Midas-style veins in the deep formations beneath a broad surface geochemical anomaly. The recent holes were close step-outs southeast and at depth in the Clementine and Gwenivere veins. We continue to be impressed with the growing resource in the high-grade narrow veins at Ivanhoe.”
About 90 holes have been drilled in the past seven months for an aggregate total of 90,000 ft. “The average vein intersection is 4.6 ft. grading 1.06 oz. gold and 8.15 oz. silver per ton, for a gold-equivalent grade of 1.2 oz. per ton.”
The analysts conclude their comments by noting that major producers are now taking an interest in Great Basin’s work to date. “Positive results from the planned step-out drilling program could initiate serious takeout discussions.”
Meanwhile, south of the border, John Kaiser of The Kaiser Bottom-Fishing Report appears to be losing patience with the search for “prairie gold” being led by
Despite the development of a plausible geological theory explaining the search for “prairie gold,” the mineralization has yet to be detected in economic concentrations in bulk samples or through conventional fire assaying. According to Kaiser, Birch Mountain has kicked its metallurgical team into high gear to develop “a secret technology to convert colloidal gold into metallic gold.”
How does it work? According to Kaiser, Birch Mountain won’t say, the reasons being that it does not have a patent and it is still working out the details. The newsletter-writer asked the company how it knows the technology will work if it has no way of pinpointing a bulk sample that actually contains meaningful quantities of colloidal gold? The answer, he was told, is that the company knows where the high-grade stuff is situated.
He then enquired how the company figured this out, only to be told that Birch Mountain was unable to provide details because there may still be deposits not yet under its control.
And then comes the $64-million question: When will evidence be provided that prairie gold is not an extraordinary delusion?
“Just be patient and trust us,” is the reported answer.
“Okay,” Kaiser writes, “but not on my nickel.”
The newsletter publisher proceeded to issue a 25% “partial sell” recommendation so that his bottom-fishers could recoup their original investment, assuming they acted on his 25-level buy recommendation made a few years ago.
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