Note: Ticker Trax subscribers received the actionable material in this article first on Monday January 25, 2010.
JOHANNESBURG – Three words caught me in a Harmony Mining breakfast briefing for analysts this morning: “Optimize asset portfolio.”
People at gold mines speak this way. Harmony CEO Graham Briggs speaks this way. (I laugh, hearing on the flight over to South Africa today Mr. Jack White of the White Stripes snip about suits on cell fones -- talking organic growth. That was in the guitar flick “It Might Get Loud.’”)
Harmony Mining (NYSE: HMY, Stock Forum) will have to get loud. Otherwise the longstanding gold company won’t get heard above the fray of brisk explorers and efficient miners in Ghana, Burkina Faso, Mali, Botswana and other spots around the continent.
I am in a cross-continental fix. As frisky investors (including we concede Ticker Trax) seek seedling gold projects in Colombia, Panama and Peru, I am charged with seeing whether South Africa’s massively productive mines still can lure international investors looking both for promising areas of exploration and rock-solid returns from decades-old gold mines.
Thus:
- In the case of Harmony Mining, I wonder whether executives at the 2.2 million-ounce producer will decide to take CEO Briggs at his word. That is -- to package, then distribute to shareholders its tired-old mines that are clunky, expensive and maybe depleted. If I discover the company does intend to shed leftovers to shareholders, and I like what I see at one of the deep (2,200 meters or so) mines I will visit later this week in the Free State, Harmony shares might qualify as a short-term spec peck-peck – a speculation. Sweet ubuntu – as in harmony.
With Great Basin Gold (TSX: T.GBG, Stock Forum), we expect in the flagship Burnstone Mine to see a southern hemisphere complement to its emerging Nevada mine in Elko County, Hollister. Slag north to slag south. Ferdi Dipennaar’s GBG is an odd one, having existed at least since 1996, purchasing other entities’ mines on the cheap whilst continuing to kick rocks in Tanzania, Mozambique, South Africa and along Nevada’s Carlin Trend. If GBG fulfills its pledge to produce 400,000 ounces of gold yearly from Burnstone in the Wits Basin and at Hollister, a $620 million or so market capitalization is cheap and the corporate fragrance as spicy as those boerewors the gold companies serve for sausage-lovers’ breakfast at their analyst gatherings. If not, Great Basin Gold is way too big for its basin. Personally, I think it’s cheap and eventually will wind up as pick-up bait for Ashanti Gold Fields or one of the other Africa-based giants. Plus, for those who recall our summer 2009 coverage of the Esmeralda Mill (photo here – Thom Calandra) and prospects in Nevada (please see Ticker Trax archives), we say the upside is vast. GBG shares sell for just 60% or its peers’ NPV estimates.
- -- On the Wits Gold front (TSX: T.WGR, Stock Forum) and (OTO: WIWTY, Stock Forum), I have been trying to get my head wrapped around this $250 million or so deep vault in the ground for at least two years. One of these days, if founder Adam Fleming and doctorate Marc Watchorn have not abandoned their efforts to sway Ticker Trax subscribers, I just might catch the Wits logic: own way-deep gold and uranium assets that offer vast, almost unimaginable resources with just a thin dusty path to develop the mineral assets into mines. I hope that in seeing Wits’ DeBron and other assets, I am – as stated here the other day -- believing … and in believing I am buying. After all, and I lift this almost directly from Wits Gold’s literature: The Witwatersrand Basinis host to the world's largest pocket of gold. Historic output is somewhere around 1.5 billion ounces. The Wits basin is essentially a load of gold-bearing reefs in and around Jo’burg and the Free State.
On the jet over
, I ran into a dozen or so stock car racers and technicians who will turn part of the Free State, a one-and-one-quarter mile circular track near the city of Welkom, into a 500-mile race – the first of its kind in Africa. There are few if any circular tracks for stock car racing in Africa. ESPN International will be at the track, which is not far from Harmony’s properties … and Wits Golds’s properties.
- Verskoon my babbling here. This week I also will be seeing R. Michael Jones’s Platinum Group Metals’ property on the Northern Limb. Platinum Group Metals (TSX: T.PTM, Stock Forum) and (AMEX: PLG, Stock Forum) has been working the western Bushveld Complex for at least six years. I was there many years ago. It now has some Japanese support. The shares, even with $35 million or so in cash and securities, are expensive. Ag, man.
If I were not headed back to Colombia (and Panama) in two weeks’ time, to see Antioquia Gold a second time, and to kick tires at several properties owned by Bellhaven Copper & Gold (TSX: V.BHV, Stock Forum), I would extend my continental stretch this week to include a refresher course at Jimmy Longshore’s X-tra Gold Resources (OTO: XTGR, Stock Forum) in Ghana’s Kibi Gold Belt.
X-tra almost surely will be putting in place the corporate and stock-market scaffolding needed to justify a far larger market cap than it now carries. Ticker Trax subscribers who want what we think might be the second-best equity placement on the planet right now in mining circles will want to contact Mark McGinnis at Haywood Securities in Toronto in the next two to three days. As with each of the 12 Planetary Prospects of our Ticker Trax service, I am owning Great Basin Gold shares and X-Tra-Gold Resources shares. Ja, dankie, ja.
Finally, on the West Africa front, I am endeavouring to savvy the promise of Etruscan Resources (TSX: T.EET, Stock Forum), a $140 million gold producer and prospector in Burkina Faso and in Mali, Ghana, Ivory Coast and elsewhere. Endeavour Financial (TSX: T.EDV, Stock Forum), a Planetary Prospect of this service, made Etruscan the first beneficiary of a strategy to “rescue” tattered gold producers with cash, debt facilities, advice and fresh shareholders. In the case of Etruscan, step one was eliminating some of the $700 gold call options that were clouding the company’s blue skies. Etruscan, by the way, owns a stake in a diamond land package in South Africa.
I continueto research private and public Colombia gold companies. The latest is one called Bellhaven Copper & Gold. It is run out of Panama. Patrick Abraham’s PanAmerica Group manages about $400 million in assets and has been very active in the financing of junior resource companies since 2001. I hope to meet CEO and President, Julio Benedetti, a geologist who attended the Colorado School of Mines, in two weeks or so.
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Mr. Benedetti is related to Alida Benedetti, a Panama lawyer who handles Georges and Michel Juilland's Panama corporations. I have met Georges Juilland, a prolific mining engineer and prospector, at his Titiribi project in Colombia. (More on Titiribi below.) Bellhaven is turning its attention toward five concessions in southern Colombia, in the Department of Bolivar, an area once thick with guerrillas. I hope to learn more about Bellhaven in coming weeks. I am considering purchasing but have not yet purchased shares in Bellhaven.
Bellhaven’s now-14-cent Canadian shares sport a listless market worth of $15 million. They are, like Robert Carrington’s Colombia Mines (TSX: V.CMJ, Stock Forum) and one or two other Colombia prospectors, insanely cheap … or appear to be. Bellhaven shares until the past week or so had been trading briskly, much more thickly than at any time in the past nine months.
On the Colombia front, I will be tracking the progress of Titiribi, the Georges Juilland (in photo – by Thom Calandra) gold project some 90 minutes outside of Medellin. The Juilland family’s Goldplata-related holdings include promising copper and silver country not far from Fortuna Silver’s (TSX: T.FVI, Stock Forum) Caylloma Mine in Peru. Mr. Juilland also has his hands in a copper project in Colombia called Murindo in the north. I hope to participate in the MKM-Sunward-Titiribi 35-cent offering of stock and warrants in coming weeks. This will be the only mining placement of any type I have done since 2003 in terms of equity. I will not let this – if I do get to purchase the as-yet private shares – influence my take on the Titiribi and Murindo projects. The proposed $5 million offering is on the Motorola Droid screens of several Canada mining tycoons. Please see: Investor angling.
Colombia’s energy: Several fund managers headed to Colombia this past week from Vancouver. Ticker Trax currently is reviewing market prospects for Alange Energy (TSX: V.ALE, Stock Forum), whose CEO, Luis E. Giusti, I spent time with in Bogota. The entire energy-investing world wants a piece of the next Pacific Rubiales (TSX: T.PRE, Stock Forum), the now $3 billion oil prospector turned producer whose shares have risen eightfold in 12 months. Whom that will be remains in question. I think Alanage has the intellect and the properties, as well as the backing of Endeavour Financial and others, to stand a shot at vast success in Colombia’s emerging oil fields.
“Pacific Rubiales beat all the odds by beating every single one of its internal deadlines,” says Sally Eyre, the Endeavour Financial (EDV) executive who helped pave the energy company’s path toward 105,000 barrels of oil per day … and growing.
Antioquia Gold: The Colombia prospector (TSX: V.AGD, Stock Forum) is gearing up for a visit by analysts, investors and writers in early February. Fresh results just out. I will be attending – yes that is a yes, ja dankie – even as I already have seen Cisneros, the company’s main prospect. Antioquia is the name of the department, or province, that we here have crystallized in our search for the next Ventana Gold. And crisp empanadas.
Antioquia
Gold’s three main prospects are looking as if they might provide reason for a considerable meso-thermal deposit less than two hours from the city of Medellin. I am told drill results and other data this time will accompany a more formal tour of Cisneros. Our last visit one month ago was not a full-bore tour of the property, but thanks to Rick Thibault, engineer German Guerrero (in photo) and others, this one likely shall connect the prospective dots.
Colombia again: Please see our continuing coverage of Medoro Resources (MRS) and itsMarmato Mountain … and possibly Frontino Mine at Segovia it the hopping company negotiates its way through legal, government and union loophole. Medoro on Tuesday was trading briskly higher. I believe, if Medoro Resources (TSX: V.MRS, Stock Forum) continues its portfolio power-up, CMJ’s Yuramalito (CMJ) and other Colombian gold concessions of great (yet thus far unproven) potential will become part of its growing Colombia portfolio of gold mines.
(All photos by Thom Calandra. Thom owns shares of each of the 12 Planetary Prospects. He also owns Medoro Resources. Thom’s personal holdings are available for all to see on Stockhouse, the Canada publishing company. He has no intention of selling any of the 12 Planetary Prospects at present … and if he were to, subscribers would be informed well in advance of any shift in research regarding those Prospects. Ditto for Medoro Resources. He does not own Alange Energy, Petroamerica or Pacific Rubiale – oil companies active in Colombia. He does not own Antioquia Gold. Or Etruscan Resources. He is considering purchasing shares of Bellhaven Copper & Gold but had not as of the publication of this report.)
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HOLDINGS:Thom’s stock holdings are listed for all Stockhouse members on www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He also owns recently minted gold and silver coins and shares of two private companies, one of them a nickel and platinum prospector in South Africa & DRC (Congo) operated by Robert M. Friedland. Thom does not do private placements – with the one exception this yea, he hopes, of Titiribi-Sunward in Colombia … nor does Thom accept payment in return for coverage. Thom participates in select company-sponsored and company-paid tours of mining sites after examining the properties off-site for many months and in some cases, years.
(All photos by Thom Calandra. Thom owns shares of 12 of the 12 Planetary Prospects in Ticker. This would include Premium Exploration above.)
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THOM CALANDRA of Ticker Traxhelps his audience find value in a quagmire of investment choices. Thom co-founded and was executive VP of news for CBS MarketWatch andMarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold and dyed his hair blonde multiple times as gold surpassed $400, $500 and $600.
Ticker Trax™ is published by Stockhouse Publishing Ltd. Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra is a broker or an investment advisor. None of the information contained therein constitutes a recommendation by Mr. Calandra or Stockhouse that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Ticker Trax does not purport to tell or suggest the investment securities subscribers or readers should buy or sell for themselves. Subscribers and readers of Ticker Trax should conduct their own research and due diligence and obtain professional advice before making any investment decisions. Ticker Trax will not be liable for any loss or damage caused by a reader’s reliance on information obtained in the reports. Subscribers and readers are solely responsible for their own investment decisions. Opinions expressed in Ticker Trax are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in Ticker Trax should be independently verified. The editor and publisher are not responsible for errors or omissions or responsible for keeping information up to date or for correcting any past information. Ticker Trax does not receive compensation of any kind from any companies that may be mentioned in the report. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed in Ticker Trax. PLEASE DO NOT EMAIL THOM SEEKING PERSONALIZED INVESTMENT ADVICE, WHICH HE CANNOT PROVIDE. Copyright 2010 all rights reserved.