STEAMBOAT SPRINGS, Colorado -- This hippy-face little town has a mountain built for family skiing -- alpine terrain for all ages. The Colorado town, ripe with lithium-laden hot springs, also hosts a mining family, which is soon to be better known for its gold and copper prospect in Guyana.
Here in snow country, the U.S. Nordic Team uses a night-lit hillside for cross-country training. Hometown lad Johnny Spillane just plucked an American medal in Nordic Combined in Vancouver’s Winter Olympics.
“We’ve had our fair share of alpine and cross-country Olympians from here,” Trace Adams tells me.
Trace and his older brother, Wes Adams, are part of the extended John Adams family that discovered the Guyana gold and copper prospect. John R. Adams’ deep pockets and a family legacy of uranium mining have helped Sandspring Resources (TSX: V.SSP, Stock Forum) write the book on how to engineer a cash-pool-corporation into Canada’s crowded stock market for hard assets.
That was in November. The IPO came via a regulated route of paper “shells,” the fiscal hoops of a cash-pool entity, and handwringing by John Adams and his lawyer partner and buddy, Richard Munson. (Please see:Gonzo Guyana Gold.)
The numbers: Sandspring’s sprawling Toroparu Resource is essentially a 3.36 million ounce-gold-equivalent resource with 2.3 million ounces of gold and 266 million pounds of copper.
Mr. Munson and Mr. Adams first came to Guyana in 1998. The following 12 years saw “lots of ups and lots of downs and mostly lots of work,” says Mr. Munson, who looks a lot like the famous actor Gary Cooper.
The two with back breaking assistance from muscled Wes Adams, blasted a road through the jungle. They set up a river ferry and acquired mineral licenses in the rough-and ready English-speaking nation of just 750,000 people. Placer mining, profitable placer mining, was part of the Adams-Munson mix.
“Next came the airstrip,” says Wes Adams. “It’s over some prime mineralized ground. We had no choice.” The 70-person camp has a mill that can “do up” 3,000 metric tons of saprolite each day.
Guyana’s funky family
Sandspring, in the Guyanese language of hope, is a gold/copper playa of possibilities. It is the kind of hope that has pinned medals of honor on relatively few among Canada’s “junior” prospectors. Even with ebullient gold and steady copper prices these days, just a handful of companies – Osisko Mining (TSX: T.OSK, Stock Forum) in Quebec comes to mind –are notching the financial and open-pit benchmarks that best serve the needs of stakeholders.
I think it has something to do with family. Osisko at its Malarctic Project is pulling off a contemplative and well capitalized coup because two wives and their husbands, or is it two husbands and their wives, stuck together through the thick of Africa and the thin of wan times.
Thus it is with Sandspring. The Adams boys, including father Adams, are invested in sweat equity and elk antler chandeliers hanging from ceilings. Their fortunes are just as linked to the climate of Steamboat Springs as they are to a faraway gold and copper mine’s success
.
“Sure, we have to respect the bankers and their need for resource estimates, for internal rates of return … maybe market cap measured in ounces,” John Adams says. “But lifting a shovel never hurt anyone around here.” He means that, I believe, for Colorado snow and Toroparu mineral.
In Steamboat Springs the other day, and this is the gosh-darn truth, I plopped down on a ski-chair lift and found myself talking to a woman who baby-sat the three Adams boys (the middle son of John Adams works in a Chicago futures pit) a dozen or more years ago. The very next day, I got a 15-minute Adams family history lesson from a fellow named Peter Soars, a tram driver for the ski resort here. Pete’s tale was all about how John Adams, fresh from uranium digging and coal chomping and whatever-else mining John and his father before him, Robert Adams, mapped and tapped in Utah and Colorado, became one of the Steamboat Springs area’s high-energy property and people developers. “Yep-sir, people. He seems to collect them, Or maybe they collect him. More generous chap you never met,” Pete told me in the thick of at least five snowfalls during the week. “Now you and yours have a good ski up there.”
John R. Adams is one of several folks in these parts who spearheaded a campaign that installed a summer waterslide for the town of Steamboat Springs. Kids like it. Yet I believe the 60-something-year-old’s largesse will mark itself just as grandly on the map of shareholder returns via the avenue of hard-won assets.
Sandspring, in my book, is a leading candidate to deliver our Latin America gold prospecting community’s next Big Win. (Colombia has three or four contenders, too. Please see below.)
Sandspring’s Guyana gold field, about a one-hour EAR-SPLITTING private plane ride from the capital of Georgetown, is fast becoming an heir to nearby Venezuela’s Kilometre 88 trend. (Please see pre-IPO coverage of Sandspring Resources: Thom Calandra’s site tour in October. Plus: See our current analysis of SSP from Stockhouse writer and editor Sean Mason.)
Wes, who now handles investor relations from Denver, is an eager 26-year-old hulk. So is 23-year-old brother Trace. They are American footballers and ranch hands through and through. Wes and daddy-o John Adams hacked their way through more than 80 miles of jungle putting in a road, only to see “artisanal” miners use the cleared path to lay in their own holes and gold-placer-ops.
“Hey that was good,” says John R. Adams, who begins every other sentence with hey. “The way the locals and the shop keepers just followed our road was a validation at the time. Man, it was scary stuff if they didn’t follow us in!”
Back in the snow, Wes Adams (pictured above at Saddleback Ranch’s dude-restaurant outside Steamboat Springs with longtime friend and the owner of the 8,000-acre cattle spread, Wayne Iacovetto, wearing hat) and I are bronco-busting a couple of monster Cats across a deep and thick carpet of snow just outside town. He shouts to me, “We have some people coming on board who are going to take Sandspring to the next step.”
I have heard that kind of talk before from miners. Just not in a Colorado blizzard and certainly not whilst I am getting a little carried away with the throttle on my Arctic Cat, burying one of the kids in the snow (See photo here.).
Sandspring Resources has yet to name a full-time VP of exploration. But John and Wes Adams and their freshly scrubbed president in Canada, Abraham Drost, say they are bringing in the big guns.
The company, having seen its market cap rise in three months to about $150 million from $20-odd million or so at the autumn IPO, is capturing the interest of mid-sized Canadian, British and American banks and asset managers. A second tour of Toroparu drew 11 fresh faces from brokerages and fund managers. That was last week.
Sandspring intends to offer warrant holders extra shares if they trigger in-the-money units sooner rather than later. ““That gets us maybe $3 million in the bank,” Wes says. Canadian market regulators have approved the early exercise. Banks and asset managers in January told me they were chomping at the bit to buy shares but were not seeing many 100,000-share lots on offer.
When I was at the Guyana site in October, we saw several trenches with high-grade gold rock at Toroparu. We also saw small diamonds on site, in the thick of the bush. John Adams, now Sandspring’s chairman, had just brought on Abraham Drost, a workaholic 6-foot-4-inch (or taller) executive and geologist with a goofy smile and a smart wallet. Mr. Drost notched success with Sabina Silver not long ago. Now he is Sandspring’s president, reporting to CEO Richard Munson.
Mr. Drost, continuing John Adams’ relentless trenching, soil-sampling and resource-poking drilling, has built a sizeable databank of gold and copper. The company expects to follow through with yet more assays, drill results and metallurgy, among other things, in coming weeks.
Some 27 holes were drilled in 2007 beneath an existing saprolite pit. In September, just before I saw the sweep of this vast project, holes 28 through 50 were getting punched into the ground. I am told more drill rigs are on the way.
John Adams this year gets to take a break from processing alluvial gold on the property in his open-toe sandals, his fatigue shorts with onlookers gawking at the sparks. (See photo up top.) Wes Adams says the company, after producing a few hundred ounces of gold per month, and sometimes more, will focus time and money on the drilling.
When I saw John R. Adams several months ago, the rough looking cowboy from Steamboat Springs seemed at peace inside the metals shop he had erected at the site. J.R. Adams, sporting Crocs on his feet and a pair of fatigue shorts, was firing up gold “sponge” – a concentrated hunk of impure gold. This dude whose family owned and ran Utah’s Energy Fuels Corporation seemed to revel in pouring smelted liquid into a bar template. It came to about 93 percent pure.
The Adams family and Mr. Drost have a decent shot at showing the world that Las Cristinas and whatever else is lying dormant in Hugo Chavez’s ravaged Venezuela, via Kilometre 88, might extend into Toroparu. Sandspring’s property is no more than 50 or 60 miles distant, as the birds fly. If the drills and the geologists and surveyors complete their ideal schematic, it is likely this almost $200 million company will become the next billion-dollar-baby in South America.
Pity that I do not own any shares? Not really. We here at Stockhouse and at Ticker Trax have our hands full in Colombia and parts of Peru and Mexico. The Kibi Gold Belt of Ghana, too. But as I dig myself, the kids and our small fleet of snow cats out of the white-white of Colorado, having bored my machine into yet another snow bank, I wonder which Guyana gold and copper miners, aside from what looks like a spectacularly overpriced Guyana Goldfields (TSX: T.GUY, Stock Forum) and its $400 million-plus market worth, will catch a ray or two from Sandspring Resources’ afterglow.
At present, there are to our knowledge at Ticker Trax a mere handful of public British Guyana miners with market values of less than $20 million. At least one that I know of is in the process of raising money via an equity placement. Ticker Trax has more.
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Thom Note: The following was delivered first to Ticker Trax subscribers.
In Colombia:Colombian Mines (TSX: V.CMJ, Stock Forum), a Planetary Prospect of Ticker Trax, is still in discussions with a Colombian gold operator for a possible partnership or merger. CEO Nate Tewalt and President Robert Carrington say they hope to resume discussions with one or more parties this week in Bogota.
CMJ is just off what Mr. Carrington in Medellin and Mr. Tewalt in Washington state say was a successful and oversubscribed equity placement with warrants that raised $3 million Canadian. “We were filled in a day,” Nate Tewalt says. (Part of the enthusiasm might have been CMJ’s sub-$20 million market worth and, in the offering, a full warrant good for two years at a trigger price of $1.20 a share, less than 20 cents above the current price.)
“As choppy as the market has been lately, we wanted as much protection against a soft stretch in the stock market,” Mr. Tewalt tells us. “The full warrant is designed to make the offer more attractive.” (Our take: Nate Tewalt, Bob and his wife, CMJ’s Gloria Carrington, either are as generous as John R. Adams of Sandspring Resources or less than secure in their projects. Let’s hope the takeaway on that one is the first option. A half-warrant with a one-year span would have done just as well.)
Drilling is just about under way at Yarumalito, a site in the department of Antioquia that we at Ticker Trax first visited many months ago. The tiny company has a Colombia land package via mineral and property rights, options and licenses that covers about 300,000 hectares. Other CMJ sites of great interest include El Dovio (copper) and Venecia.
“I am sure you will agree that having sufficient capital … that we are not worried about the lights getting turned off … may not materially increase our value in our (partnership) discussions … but at least we won't be looking weak,” Mr. Carrington tells me from his Medellin office.
Nate Tewalt and Bob Carrington said they will continue to discuss a possible merger or other arrangement with Colombia businessman and former Pacific Rubiales (TSX: T.PRE, Stock Forum) director Serafino Iacono.
Other entities with extensive Colombia land packages include Bob Allen’s Grupo de Bullet and Continental Gold (Buritica, Berlin, et al) entities. Continental Gold shares will be emerging from a cash-pool corporation sometime this spring, Toronto organizer Ari Sussman tells us.
We have 10 or so additional option-ripe exploitation prospects at our Ticker Trax desk and will be making these available in name and scope in coming weeks to subscribers. Some are public; others, among them Georges Juilland’s Titiribi prospect, called Sunward (MKM), hope to be publicly listed within weeks, or even days, in Canada.
Alas, several of what looks like a bum’s rush of equity outcroppings on the Colombia front are situating themselves in or around proven gold trends such as El Marmato, a rich yet troubled mountain controlled by Medoro Resources (TSX: V.MRS, Stock Forum), whose shares I own. The so-called “close-ology” approach, which I always have found despicable in the mining biz, also is pinned to Ashanti GoldField’s 13 million-ounce La Colosa.
More names? A couple of North American entities are zeroing in on properties in and around Segovia, home to what once was among Colombia’s richest gold mines, Frontino. The Frontino Mine probably produced 4 million ounces of gold during a span stretching back to the mid-1800s.
“We think it is a property that still has untapped potential,” Juan Manuel Pelaez, Colombia president of Medoro, tells me.
The scrum for Colombia gold is accelerating. “Just about everyone out there thinks they have the keys to the vault,” Mr. Carrington at CMJ tells me. Even with the security blanket of Colombian Mines’ countrywide holdings, the Nevada-trained geologist tells me he is still in the hunt and is looking at a “secret location” in the coming day or two.
Acts of Oh-My-Gawd
Mr. Carrington, upon whom our subscribers have pinned their gold-rush dreams, says he is a busy geo this coming week. “Drilling is going well at Yarumalito. Barring typical drilling problems, you know acts of God assisted by drillers, we should be finishing the first hole of this year’s program Monday or Tuesday,” Bob Carrington says. “I will be checking on the drill myself.”
Elsewhere in Colombian Mines’ property portfolio, “We have crews on site at our Cisneros licenses completing a property-wide soil geo-chem survey, some of which are contiguous with Antioquia Gold (TSX: V.AGD, Stock Forum), the rest of which are contiguous with, and I think directly on trend with the B2/AngloGold Gramalote and La Trinidad projects.”
Bob Carrington adds, “I will be visiting our Rio Negro and Santander licenses later in the week with our geologists to review developments there.”
There we have it. Colombia concessions and prospects called Quinchia, Guayabales, Echandia, Cisneros, Gomez de Plata, California, Vetas, Chisperos, Cerro de Cobre … and far too many others to name here … are increasing the odds that investors in that gorgeous nation’s metals (and oil fields) will need to navigate their way through hyperbole, obscenely expensive banking fees, a shortage of drill rigs, avaricious property owners and dare we say it, just plain criminals who create entities that charge public companies enormous fees for services that subtract and not add value.
On the up and up: at least three companies I have witnessed with my own eyes are scouring existing tunnels carved by wildcat (artisanal) miners. Australian, Panamanian and Canadian geologists and mineralogists tell me the region just north of the state of Antioquia is shaping up as a gold district with the potential for tens of millions of easily mined ounces of gold. That is, if what I saw in the San Lucas portion of the Department of Bolivar (see photo of a working artisanal operation) was real and not an optical illusion I was suffering as we cruised the River Magdalena two weeks ago.
We here at Ticker Trax will return to Colombia in March or April for the fifth time in six months. At present, the subscriber service is reporting on several intensely speculative prospectors in the country and tracking the activities of our sole Planetary Prospect in Colombia: CMJ.
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Please see tickertrax.com to learn more about this wealth service and its 12 Planetary Prospects. Also, see its breakout feature examination of a Ghana prospector headed toward its golden harvest. Subscribers, please click here for password-secure Ticker Trax.
HOLDINGS: Thom’s holdings are listed for all Stockhouse members at www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He and his family own recently minted gold and silver coins and shares of a number of public and two private companies. He and his family DO NOT own Sandspring Resources in any way, shape or form. Never have. As with each of the 12 Planetary Prospects, Thom Calandra owns CMJ shares.
THOM CALANDRA of Ticker Traxhelps his audience find value in a quagmire of investment choices. Thom co-founded 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.
(All photos by Thom Calandra. Thom owns shares of each of the 12 Planetary Prospects in subscriber service Ticker Trax. Thom’s personal holdings are available for all to see on Stockhouse, the Canada publishing company.)
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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.