Kaiser's second recommendationGitennes Exploration Inc (GIT-T:
.45)
TotoRoko copper-silver-gold play continues to show promise
Synopsis: On July 30, 2007 Gitennes Exploration Inc (GIT-T:
.45) jumped
.08 to
.45 on 631,600 share volume following a news release updating sampling results from its TotoRoko copper-silver-gold prospect in southern Peru. The junior has now provided a geological map, property photos and further details on its web site which confirm earlier reports about TotoRoko. The latest results support Jerry Blackwell's hypothesis that Gitennes has discovered a porphyry system at TotoRoko whose footprint indicates a potentially world class discovery if surface showings are confirmed by drilling. Channel and grab sampling of outcrops on a colluvium covered 4,500 metre long ridge has yielded high copper values (up to 6.6%) and modest silver values (up to 50 g/t) in the Lomas Orjo and Cerro TotoRoko "zones" as well as anomalous gold values up to 0.4 g/t in oxidized stockwork and dissimenated mineralization. Blackwell believes that these two zones are underlain by a "highly evolved" porphyry system overlain by a barren leach cap. The northwest-southeast trending system is cut by north-south trending silicified and barite rich vein structures named the Cantana zone which yielded very high silver values up to 1,230 g/t and elevated gold values over 2-3 metre widths. The relationship between the two styles of mineralization is not yet understood. Although results of a geophysical survey are still awaited, Gitennes believes it has geological justification to drill 14-18 holes designed to test the existence of a concealed porphyry and establish the grade of primary sulphide copper-silver-gold mineralization at depth. A drill contractor has been secured, a Class B permit is imminent, and the only holdup is the availability of a drill rig which Gitennes expects to secure by late September. Although the prospect is at an elevation of 3,400 metres, water is present and weather is not expected to be an impediment to drilling. We should know by the end of 2007 if TotoRoko is a hot new discovery play.
On July 10, 2007 I had issued a top priority buy recommendation in the
.30-
.49 range as the stock was just starting to break out of its
.20-
.29 trading range.The recommendation was partly based on my assessment that Gitennes had generated a copper-silver-gold porphyry prospect which at the then
.30 stock price had an implied project value of only $16 million that offered tremendous upside if drilling confirmed a world class discovery. I also warned that the company has an overhang of 4,523,000 warrants exercisable at
.30 until August 31, 2007. Since my recommendation Gitennes has traded in the
.30-
.40 range, but the latest news has started to attract inquiries from an institutional audience. Blackwell is in no hurry to finance and his immediate focus is to get the
.30 warrants exercised, which would boost working capital to $2.5 million, enough to fund the first stage of TotoRoko as well as his "Fruta del Norte" theory at the 100% owned Urumalqui project. Blackwell has confirmed to me that the area of interest does host a conglomerate buried pull-apart basin, albeit with a smaller footprint than that of Aurelian's Fruta del Norte discovery. He comments that both Meridian and Gitennes geologists walked the ground during their joint venture and noted the interesting presence of sporadic gold and silver mineralization, but none of them at the time thought this constituted a worthy drill target. Geological analogue history doesn't usually repeat itself, but because the market is now focused on TotoRoko, the Urumalqui revisitation is a freebie. The target is ready to drill, and will be drilled as soon as a drill becomes available, also expected in September. Negotiations with Inmet to resolve the impasse over the Tucumachay project are "making progress".
The implied project value of the 100% owned TotoRoko and Urumalqui projects has climbed from $16 to $24 million, but this is still cheap relative to a world class dream target at TotoRoko, and the stock is still within the
.30-
.49 recommended bottom-fishing range. I am consequently confirming my top priority bottom-fish buy recommendation of Gitennes Exploration Inc in the
.30-
.49 range. I don't normally like to re-emphasize a bottom-fish pick so soon after making the initial recommendation, but I want every Kaiser Bottom-Fish Online member to take a very hard look at this exploration junior. And if it jumps above the bottom-fishing range, just be patient, the
.30 warrants have to be digested and there is nothing on the horizon which can improve the company's fortunes any earlier than results from drilling the TotoRoko and Urumalqui projects.