Yet another newsletter covers Animas tonightwww.smallcap.ca
The SmallCap Catalyst Newsletter - Volume 6 #5, February 26, 2008
Animas Resources: Opportunities Knock
Inan historic disparity, gold is trading near an all-time high while gold shares,especially junior miners, are down. As esteemed guru James Dines points out,this is a disconnect of unusually large, perhaps historically unprecedentedproportion: gold is flying and gold stocks are in the doghouse. At some pointwe would expect a return of gold stocks to their normal correlation to gold. Eithergold stocks should rise or gold should fall. Choosing correctly which willhappen could establish fortunes.
Ourbelief is that the factors driving gold in its long-term uptrend will continue.Gold is money (not a commodity) and it is the planet’s 4th reservecurrency. Investors seek gold when they want a safe haven from currencydevaluation, inflation, declines in real-estate or the stock market. Gold isalso sought by sovereign funds with fantastic amounts of money looking for away to exchange paper dollars for tangible assets, hedge fund speculatorssensing profit in the momentum, and countless millions who recognize itsimmunity to government whims. Therefore we believe that this unprecedented anomalywill resolve itself in favor of higher gold share prices.
Ourfavorite way to take advantage of metals trends is to invest in juniors whose ownpotential may compound the potential of a mega-trend. We like AnimasResources (TSX.V: ANI, Pink Sheets: ANIMF) because it is a relativelyunknown newcomer with huge potential for a gold mining junior. We do notrepresent Animas as a client, but must disclose that we do own shares.
Thestory is extraordinary. A mining entrepreneur noticed that the fractionated natureof the property holdings in an entire gold district in Mexico were a majorimpediment to exploration and development.That mining entrepreneur made a concerted effort to consolidate them. Hesucceeded in accumulating most of the property in a 348 square kilometer areaof the Mexican Santa Teresa gold district. The property has many old mines onit, including the Santa Gertrudis past producer. It comes with a massive amountof accumulated historical exploration data from many sources and a historic,non 43-101 compliant, 772,000 ounce gold resource. Well-known gold analystBrian Lundin has commented that this property has six separate areas that havepotential for stand alone, multi-million ounce deposits.
Themining entrepreneur that accumulated the properties also then set about findingthe best exploration team for a junior that anyone could imagine. For instance,the President and CEO has 40 years of extensive experience in mining, and wasthe VP Latin America for exploration for Phelps Dodge. An active member of theAdvisory Board was Newmont’s Chief Geologist and has been credited for much ofthe development of the Carlin Trend. Anothermember was VP North America for Phelps Dodge, leading the team which discoveredmany of the ore bodies on the Animas property. We suggest that you review thecomplete list of management, consultants and advisors, found at https://www.animasresources.com/s/AdvisoryBoard.asp.There are not many exploration companies with this caliber of geologists, mineengineers and finance professionals.
Inthe current proliferation of junior mining companies finding experiencedmanagement is difficult. We speculate that such an astonishing array ofprofessionals could only have been attracted to Animas because of the quality ofits land package. A 1997 report from industry-respected mining consultantsBehre Dolbear had this to say: “The property contains potentialfor a deep, Carlin-type target from an examination of the property and thepresently available data for the project. The geology, structure, geochemistry,geophysics and mineralization are indicative of this type of system and thesimilarities to the Post-Betze deposit are very striking. Santa Gertrudis is atthe same position the Carlin Trend was at the point in time Barrick bought theGold Strike property from Western States Minerals and started their deepexploration program. The deep exploration potential at SG is very positive andthe chance for deep mineralization is very good. The surface potential, as youknow, is without question.”
Managementis moving very quickly on several fronts to advance the project:
- They are well financed with $7 million currently in the treasury.
- They are creating a computer model integrating the historical data: 1017 RC drill holes totaling 98,620 meters, 225 diamond drill holes totaling 21,122 meters, 34,000 rock samples, 21,000 soil samples, district wide geophysical and ASTER surveys, a soil geochemical survey. To replicate this data at today’s prices would cost in the tens of millions.
- They have formed a special projects group to apply new ideas and techniques to the data. This may result in new perspectives regarding trending structures and therefore mineralization extensions.
- They have commissioned a new NI43-101 report to validate the historical ounces , due to be finished sometime this Spring
- They are successfully hiring quality field geologists, including people with deep experience in Sonora, Mexico and the Carlin Trend, Nevada.
- They are proceeding with a 10,000 meter drill program with Major Drilling that will begin by the end of March or April. The intention is to rapidly extend known historical resources, to discover additional mineralization along strike and to develop and test new ideas, including deeper, Carlin-trend-style sulfide targets.
- They intend to update the new NI43-101 report with results from the drilling program
- They have bought back the outstanding royalties on properties already owned.
Whilethe property has seen quite a bit of exploration, there are many areas whichshow potential that have not been looked at. For instance, there are extensivesulfide gold deposits outcropping on surface. Many additional deposits andstructures are yet to be tested. Only cursory exploration was done below 400meters. Known mineralization is open at depth.
Torecap, Animas holds a district-sized land package with a non-compliant resourceof over 700,000 ounces and multiple quality exploration targets on surface. Atdepth, it holds the potential for a Carlin-style deposit. The management andadvisory teams are exceptional in experience and expertise. They are movingvery aggressively to quickly take advantage of the potential. They are doingthis within the mega-trend of rising gold prices and at a time when the goldprice and gold shares are in a historical disparity, the resolution of whichmay favor gold shares. Please note that the success of the project is notdependent on $900 gold. Management took this project on when gold was less than$600/ounce, believing they could develop a very valuable asset.
Weat SmallCap are excited owners of the shares of Animas Resources and lookforward to this exceptional management team revealing the potential of thismajor Mexican gold district. Animas has only 24.3 million shares outstandingand a market cap of 35 million.With anew NI 43-101 report on the way, new drilling beginning soon, an exceptionalmanagement team and more information coming from multiple past owners’ data webelieve that shortly, Animas will begin to be noticed by larger players in theindustry.
Your due diligence:
Additional articles on Animas Resources:
SmallCap Corporate Partners Inc. -Phone: (250) 380-2274
12A 1950 Government St., Victoria, B.C., Canada - V8T 4N8
-https://www.smallcap.ca
If you would like to be taken off or if you would liketo contact us, please send an email to
SmallCap Corporate Partners Inc. is a venture capitaland management consulting firm. We invest in and provide management consulting,including Investor Relations consulting, to microcap and smallcap publiccompanies. We intend our newsletter to be informative, attractive andoccasionally provocative. Don't miss an issue! Please be sure to pass thisemail on to a friend and invite them to join our free subscription list.
Readers are advised that the SmallCap Catalyst isclassified as an advertisement. It is issued solely for advertising orinformational purposes and is not to be construed as an investmentopinion/recommendation, nor as providing investment advice, or as an offer tosell or a solicitation to buy securities. SmallCap Corporate Partners In.its officers and employees may own, buy or sell shares of the securities ofcompanies mentioned in the SmallCap Catalyst. Since SmallCap, its officerand employees can benefit from the appreciation of the securitiesmentioned we are in an inherent conflict of interest that may influenceour perspective and provide an incentive for publishing favorable informationwith regard to mentioned companies. For complete disclosure, go to: https://www.smallcap.ca/SmallCapDisclosure.htm.The reader should verify all claims andconduct independent due diligence before investing in any securities mentioned.Investing in securities is speculative and carries a high degree of risk. Allinformation contained in this publication concerning a company is providedby that company or extracted from publicly available sources. SmallCapCorporate Partners Inc. and any affiliates make no implied or expressedwarranties on the information provided.
The foregoing discussion contains forward-lookingstatements within the meaning of the U.S. Private Securities Litigation ReformAct of 1995 (The Act). In particular, when used in the precedingdiscussion, the words "plan," "intend to,""believe," "potential," "scheduled,""expect," and similar conditional expressions are intended toidentify forward-looking statements subject to the safe harbor created by theAct. Such statements are subject to certain risks and uncertainties andactual results could differ materially from those expressed in any of theforward-looking statements. Such risk and uncertainties include, but arenot limited to, the development of identified economic trends, future eventsand the financial performance of the companies which are inherently uncertain.Actual events and/or results may differ materially.SmallCap does not intend (and is notobligated) to update any forward –looking statements regarding any matters orcompanies featured in the SmallCap Catalyst.