RE: Drill & LocationI'm not sure of the exact location, but I thought they were still drilling on their Rouyn property...Yorbeau's Rouyn property straddles the Larder Lake Break along a distance of 12 kilometers and is located just a few kilometers south of the Town of Rouyn-Noranda, Quebec. Here is an OLD article on YRB that I found interesting to read. Show's how little we have progressed...Yorbeau Resources Inc.
June 19th, 2002
Overview
We fully realize that the secondary/junior mining stocks are higher risk investments in the still difficult mining industry. It is an industry that has been under pressure for almost a decade. Yet, we believe that we are in the early stages of a much better period for the mining industry. We do not believe that it is a bull market yet, we expect that a bit later. However, we believe that the "hard times" for the mining industry are approaching their end. And with any substantive exploration success by a small mining company, the returns can be spectacular. Yes, investing in small gold exploration companies is often a painfully slow and tedious process; but it offers exceptional capital gains potential for patient risk oriented investors. In investing in any sector of common stocks, the most important factor is the timing.
Les Resources Yorbeau Inc.
Yorbeau (Symbol:YRB.A) is a North American mining and exploration company based in Quebec with its head office in Montreal. The company’s common stock trades on the Toronto Stock Exchange. Yorbeau’s most important holdings include four groups of properties located primarily along the Rouyn-Noranda-Val d’or axis in northwestern Quebec. Its management’s goal over the last several years has been to acquire undervalued properties at what could be described as very low-priced levels. The strategy at present is to concentrate on acquisitions and exploration while maintaining a solid cash position.
Gold Industry background
The last several years have been among the worst years ever for the world (and Canadian) gold mining industry. Make no mistake about it, gold and mining stocks have been in a bear market particularly for the last five years. While the world’s supply/demand statistics for gold have been positive, central bank selling had been the major impediment. The central bank sales seem to be for the most part, behind us. The other obstacle to a substantial move up in gold bullion had been the high relative price of US dollar, which by most measures has been overvalued against the world’s other currencies. The technical charts of the US dollar seem to be indicating that a top has been made.
We believe that for the last several years, the price of gold has been manipulated down in price and kept at low price levels by the major governments and central banks. Their plan has been, and still is to try keep their stock markets up, as overvalued as they may be, and keep interest rates low. That has propelled stocks to ludicrously overvalued levels and kept interest rates artificially low. Why ? It saves governments billions of dollars of added interest expense on their massive borrowing and a positive stock market has and still is able to buoy an economy- at least for a while. When the realization sets in that the large capitalization stock market not only is overvalued and offers far more risk than upside potential, we expect a major bear market for the stock markets to commence. In our opinion, it will be very painful for most of the large cap industrial stocks.
Important Points, Facts and Recent Developments
1-Yorbeau plans to continue to expand its holdings in the mineral rich territories in Northern Quebec. Yorbeau believes that the recent period of weak gold prices which occurred over the past several years, has afforded the company the opportunity to acquire properties that were available at exceptionally low prices.
2-Recently, Yorbeau entered into a letter of intent with TSE and New York Stock Exchange listed Agnico-Eagle Mines in which Yorbeau transferred all their interest in their Ellison property for a consideration of $1 million. $500,000 is to be paid at the closing and $500,000 is to be paid upon commencement of commercial mine production. Yorbeau will also retain a royalty on production at the Ellison property. We believe that this agreement was an excellent decision on the part of Yorbeau. The company receives cash with the potential of continuing royalty payments if production transpires. The onerous expense of putting the Ellison property into production will be carried by Agnico.
3-Yorbeau Resources announced that the Department of Natural Resources of Quebec has agreed to provide to Yorbeau a grant of up to $336,800 under its Exploration Assistance Program for Junior Companies. This grant consists of an amount of $150,000 to provide working capital to the Company and up to $186,000 for qualified exploration expenditures.
4-Yorbeau completed a private placement with Quebec based Societe d’investissement dans la diversification de l’exploration ("Sidex") in which Sidex purchased 2 million shares of Yorbeau at .20 cents per share. The shares were accompanied by 1 million warrants, which entitles its holder to purchase one share of Yorbeau at .26 cents per share for 18 months.
The company plans to do additional exploration work on their Casa-Berardi property which includes 269 mining claims.The company plans to carry out a drilling program on its Alta and QC properties to determine the gold potential . The properties extend along the Cadillac fault in the Abitibi region of Quebec.
Yorbeau’s Management
Chairman, David Crevier, a native of Montreal and veteran of the mining industry, is an attorney with a major law firm in Montreal. President and Cheif Executive Officer G. Bodnar jr., Yorbeau’s largest shareholder, has worked for over 20 years in the mining industry and is a chartered accountant. Since today we often see excessive salaries and expenses in too many companies in North America, I would like to point out that the total executive pay for Yorbeau last year was $50,000. For our US readers, that is equal to $35,000 in US dollars. Their office rent is quite moderate as well. It also indicates that the performance of the stock (really the success of the company) and not executive salaries are the primary concern of management.
Yorbeau stock: Who owns it ?
There are 74,518,474 million share outstanding of Yorbeau. The largest positions are held by three members of Yorbeau’s management who own 18,106,490 shares of Yorbeau’s stock and one institution that controls 10,191,000 shares of Yorbeau. Management ownership is considered to be one of the most important factors in evaluating a mining company. As there is little research available on the vast majority of small capitalization stocks, insider ownership is a major barometer of a stock’s potential and price direction. The current management percentage ownership is considered to be exceptionally large in the mining industry.
Debt & Cash Position
The company has no long term debt and has no intention of entering the debt market. Any Financing that is required will be done with equity or by joint venture. Currently Yorbeau holds $600,000 in cash. This does not include the funds that are expected shortly from the contract with New York stock Exchange listed Agnico-Eagle Mines.
Infrastructure
At all of Yorbeau’s properties, the needed infrastructure for mining is already in place. There is an abundance of skilled labor, sufficient electric power and readily accessible roads. No problems are expected in obtaining mining permits nor are there any serious environmental obstacles.
Putting Valuations on Yorbeau’s Properties
The most important factor in putting a value on a mining property is the amount of proven reserves in the properties owned, not the current production or the expected production from the mine. Recently valuations on smaller mining properties have been put at $30 an ounce in US dollars.
At present it is too early to determine a value for Yorbeau’s reserves. I expect valuations to be put on some of their properties within the next twelve months.
But I want to emphasize that Yorbeau’s properties are located in areas with a long history of gold reserves and mining. So we are not dealing with areas of exploration with little history behind them.
Why Invest in Gold exploration stocks ?
For the last several years we have seen a constant flow of negative investment advice on gold. Investors have been led to believe that gold will be nothing more than dead money for several years. Yet, if one examines the price charts of gold stocks over the last ten years, a period of little price movement up in gold, it is not uncommon to see individual gold stocks that have had several upward moves of 75%-100% and much more. Historically, a $50 move up in gold often causes major mining companies stock prices to move up 40% to 50%. Junior mining stocks very often have much greater percentage moves under the same circumstances.
We believe that the gold stocks, with bullion holding near the $300 to $320 level offer excellent capital gains potential. For patient, risk oriented investors, Yorbeau shares merit attention at present low price levels.
Final Comment
Les Resources Yorbeau Inc. has excellent properties, an already successful and experienced management, no debt and a solid cash position. Half positions and limit orders are suggested. We believe that few shares are available at under .25 cents. We will be following the Yorbeau stock as events occur and will be updating this research report regularly as developments occur. Research coverage on a company is an evolving process. Price changes are the result of fundamental factors. The most successful investors keep themselves informed and allow each investment the time necessary for success.
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