NEW YORK -- Two things will happen next week, barring natural and fiscal disasters: West Africa mining and prospector stocks will go through the roof. That’s one.
John Tumazos will hold his research firm’s mining and metals conference in New York City.
The two have no connection. Mr. Tumazos has been tracking commodities producers and prospectors for many years. His Very Independent Research confab this year will draw companies from Canada, South America, parts of Africa, Mexico. A lot from Latin America. One or two from the USA.
Some of them are missing from ordinary investors’ radar screens. Asset managers and others professionals love these kind of gatherings because the hoi polloi are just now becoming aware of the “ignored” miners. “We were fortunate to get in,” says Phil O’Neill, CEO of Colombia’s Sunward Resources (TSX: V.SWD, Stock Forum).
One of them on next week’s VIP roster is Revett Minerals (TSX: T.RVM, Stock Forum), a Montana silver and copper miner that hopes to list on AMEX in the USA in coming weeks. CEO John Shanahan will be there for the company. Hedge funds that marveled at Great Panther Silver’s AMEX catapult in February-March (TSX: T.GPR, Stock Forum) and (AMEX: GPL, Stock Forum) likely will be sizing up Revett. I own both shares and have seen both Revett’s and Great Panther’s properties.
Another company that the New York and Boston crowd has on its watch lists is South American Silver (TSX: T.SAC, Stock Forum). The Bolivia prospector must show that its jurisdiction is easy to navigate, as easy as, say, Peru, Chile or Colombia. I am somewhat familiar with South American Silver but have never been to Bolivia. The mining ministry of Bolivia is developing a draft of possible legislation for new mining laws.
As for Africa – not West Africa, mind you – one VIP presenter next week will be a downtrodden property controller whose shares have been static since Cain & Abel. This is Wits Gold (TSX: T.WGR, Stock Forum) and (OTO: WIWTY, Stock Forum).
I saw CEO Marc Watchorn two weeks ago in Toronto and also spent time with Witwatersrand Consolidated executive Hethen Hira in Johannesburg in February, Hethen and his entire geology team, along with an accountant, took me across the entire Witwatersrand Basin 14 months ago.
Wits Gold has the largest core shed I ever have seen. As in many football fields of core from decades of Basin diamond drilling. (See photo above please.)
Our two-day trip convinced me that if Wits continues with its strategy, the company will be on track to mine shallow gold in serious quantities from South Africa hard rock. The trip also sold me on the robust terroir of Free State-grown barbecued beef.
Tiny Wits is probably the largest property controller in the Wits Basin. Adam Fleming and Dr.Watchorn’s Wits is working toward the realization of more than a dozen prospects across Potchefstroom, Klerksdorp and southern Free State goldfields. All told: indicated resources of 21.9 million ounces of gold and 6.1 million pounds of uranium. Inferred category on the gold is six times that amount.
Wits needs to convince its scant New York and Boston supporters at next week’s Very Independent Research gathering that they should part with as much as $100 million to fast-track a mine at its shallowest holding in the Witwatersrand Basin. Adam Fleming of the UK’s Fleming banking family chairs Wits.
Mr. Hira tells me a Canada entity appears to have bought a large number of Wits shares via the Toronto listing. The pummeled stock also trades as an ADR on NASDAQ and in South Africa. Five weeks ago, I finally descended into Wits’ Equity Basin and purchased 3,000 shares at a price of US$7.50. “The next stepping stone is the scoping study in April,” Hethen tells me today (Friday). “Hopefully fireworks with the shares thereafter.”
I think the spark on “fireworks” will not be the scoping study for the De Bron (DBM) Project that will be published in coming weeks. Instead, my take is the infill drilling taking place right now in the southern portion of the DBM Project will shift a sizeable amount of “inferred gold” to more bankable “indicated” gold that complies with international audit standards.
At last look, there were five rigs working the property.
One of the handful (I can count them on my fingers) of asset managers whom I have admired at least since 1999, long-timer John Hathaway’s Tocqueville Asset Management in NYC, has owned Wits shares … at least … since … Cain & Abel.
The Wits path across the Western world’s mutual funds, hedge funds, trusts and other asset managers is an ugly one. Time after time since the company’s IPO in Johannesburg in 2006, professionals have scoffed at Dr. Watchorn’s and Mr. Fleming’s premise: that a rising gold price will benefit the holder of tens of millions of theoretical ounces of gold in a basin that to date has produced perhaps 30 percent of the world’s mined gold.
On one telephone call with Mr. Fleming about two years ago, I got testy with the idea that a company’s valuation could improve dramatically based solely on this “option” strategy for a gold resource. Was the company taking these properties, in effect transferred into Wits’ lap because of new mining strictures, and doing something with them? “When the time comes,” was the answer I got.
The time has come. Now that I have met Mr. Fleming and Dr. Watchorn numerous times, I understand that much. This is one of those investment dynamics that pays tribute to the psychology of skeptics: 1. “What a bunch of goat poop.” 2. “Hmmm, those drill rigs look like windmills against the pale blue Free State sky.” 3. “All systems: Buy. Buy. Buy.”
Dr. Watchorn, a geologist, tells me today, “We need all the support we can get to build some faith and momentum.” Wits needs cash, too. Not right now. But in the next two years.
West Africa: I will be heading back to Ghana, Mali and other parts of Africa in May for what is probably my seventh visit since 2003. The Ticker Trax thesis is that Ghana, Mali and possibly other West Africa nations such as Burkina Faso have some of the world’s most efficient gold ministry administrators in the developing world.
CROSS-SECTIONS: Thank you to Sunward Resources VP of Exploration Amity Tripathi and his team for displaying two graphic cross-sections of Titiribi’s Cerro Vetas gold and copper porphyry target in Colombia. Cross-sections give serious investors, geologists and engineers a leg up on what is happening on and below ground. Please see maps. I applaud Sunward (SWD) and its efforts to keep investors and possible acquirers apace with drilling developments. Dr. Tripathi promised me one month ago he would get a couple of sections on the Sunward website, and he has. Any geologist, prospector, engineer, CEO or promoter who says they cannot get cross-sections out to the public because of competitive/technological reasons or a lack of drilling data is almost always full of beeswax. (See cross-section above.)
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