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ALLAN BARRY REPORT ON
PRECIOUS AND BASE METALS EXPLORATION
7th EDITION
May 09, 2006
Welcome to the 7th edition of our report on Precious and Base Metal Exploration. Since our last report, we have seen the price of metals reach important milestones. In this edition we will review our past reports and discuss future price movement for precious and base metals. Following that discussion we will be adding three new companies to our list of Favourite Treasure Hunters. Then we will discuss the current updates for the companies previously featured in this report in our Report Card section.
Recently we have seen gold reach $700.00 USD per ounce. Silver is trading at over $14.00 USD per ounce and copper has reached $3.50 USD per pound. In our previous reports we have discussed our arguments of why we felt these prices would be reached. Our main arguments are based on supply and demand and we think that those reasons will give us clues as to where prices are going for the remainder of this year.
When looking at any commodity, the main mover of price is supply and demand, and these are the fundamentals we focus on when looking at future metals prices.
We have discussed the supply side of the argument in our past editions and still believe that the market in general does not fully understand how the last 15 years have affected supply and how it will continue to impact prices in the future. During the 1990’s, when metals prices were trading at dismally low prices, the result was exploration for new discoveries slowed dramatically. As well, projects in production that where marginally profitable were shut down. Projects on the verge of being economically mine-able where not developed because of fears that prices were going lower.
The net result of all these factors is that the global supply of precious and base metals is very tight. In reality, supply has been seriously harmed and this will continue for years into the future. It is just plain near impossible to quickly add new production into the supply chain no matter how aggressively the price of those metals is going up. Mining companies will try to maximize their production as the prices are going up but the result is they will decrease their reserves. As reserves are diminished, it will only add to the lack of supply needed now and into the future.
The recent movement in the price of copper is a perfect example of how tight the supply of copper is. We have seen copper recently make a very aggressive move up to its current price of $3.50 USD per pound. A major reason for that move was due to supply disruptions from existing mines. To add to the issue there was an announcement of a strike at a major copper mine in Mexico. These two factors have propelled the price of copper to new record levels.
Most economists would tell you that when prices of commodities increase dramatically, soon new production will be ramped up and the added supply would bring down the prices. Why hasn’t that happened? The answer is because of the long term damage the prices of the 1990’s caused to the global supply chain. The mining industry is just not able to keep up to current demand even as prices are trading at all time highs.
Another thing economists will say is that as prices go higher, demand will slow. Yet we have seen prices for many metals go up dramatically in last 5 years and demand is continuing to stay strong. The simple answer to why demand has not slowed is the economies that consume a great deal of these metals are growing rapidly. China and India are having a big impact on demand for metals. The reason their demand hasn’t slowed is because the economic benefit of producing the products that use these metals still outweighs the added cost of higher prices for these metals. As well more investors are starting to wake up to the facts of supply and demand of these metals and this new buying is driving prices even higher.
We closely watch the economic reports coming out of China and India for signs that their economies are slowing down; to date there is no evidence that they are slowing – in fact they seem to be staying strong. The only knock that talking heads in the media can say about China’s economic growth is there is a widening gap between the rich and the poor. We feel that this misses a very important issue that yes the rich are getting richer put the poor are also much less poor then they where in the past. The middle class in both countries is getting larger by the day and is a very important part of the future economic growth in these countries and equally important to the future demand for metals and all commodities.
If we are asked to describe a perfect scenario that would cause prices of metals to go higher, our simple answer would be that supply would be weak and demand would be strong. To add a little more detail we would say that on the supply side you ideally would like to see years of a lack of investment going into exploration and development of mines to the point that it had a long term influence on the supply side. On the demand side we would say it would be ideal to see a huge population of people come into the market in a big way.
The scenario we just described is exactly what we are looking at right now and more investors are starting to figure this out. Why are the economic models that economists learn so wrong? Our answer is that those models have underestimated the impact of a long period of low metals prices that have dramatically affected global supply and a huge population base that is capable of many years of growth.
As you can probably tell we are very bullish on the prices of precious and base metals. We feel that we are in the start of a long term bull market that will last for many years into the future. Until we see supply pick up dramatically or demand slow dramatically to the point that demand is larger than supply, we maintain our bullish outlook. Of course in any bull market you will see pullbacks but we feel that as long as supply is weaker than demand these pullbacks create a buyer’s market.
The global economy is very hungry for precious and base metals and the industry is in need of new discoveries to feed this demand. Mining companies need to maintain their reserves and need new discoveries to replace what they are mining. These new discoveries have, for the large part, been found by tiny exploration companies.
Even though we have seen metals prices go up dramatically in the last few years, and are currently trading with a lot of confidence, the same can’t be said for junior exploration companies. They are moving up but not nearly to the same degree as the metals they are finding. We feel that many investors are underestimating the importance of these kinds of companies and the role they play in the mining industry.
New Additions To Our Group of Favourite Treasure Hunters
In our past editions we have presented a group of companies that are well positioned to participate in the metals bull market we see continuing for years into the future. In this edition we will be featuring three new companies that we will be adding to our list of Favourite Treasure Hunters.
Following this we will present our Report Card section, where we will list all the companies we have featured in past reports and their stats and an update on their efforts since the last time they were featured.
Candente Resource Corp.
Candente has been very active in Peru since the inception of the company in early 2001. They have put together an attractive group of projects that are focused on copper and gold exploration. As well they have a group of people that where involved in the discovery that Arequipa Resources made in Peru in the 1990’s that led to the company being bought out by Barrick Gold. We are not currently shareholders but will be buying in the future.
Arequipa was a junior exploration company that went from being a penny stock that made a major discovery of gold in Peru to being bought out for around $30.00 per share by Barrick Gold. After they were bought out by Barrick Gold, some of the people that were involved in Arequipa struck out on their own and created Candente. Knowing Peru very well and the potential for new discoveries to be made they chose this country as their focus.
One of the projects they are working on is the Canariaco project. Recently the company has reported a resource calculation on this discovery. The resource calculations indicate 4.8 billion pounds of copper that is open laterally and vertically. This project had seen minimal drilling done in the past by major mining companies when copper prices were much lower than they are now. In our past reports we have mentioned we have noticed a trend of projects that had been looked at by majors when prices were much lower than they are currently and these projects are now very attractive. This project falls into that group and it has advanced quite significantly over the last two years by Candente. This project has the potential of becoming a low-cost copper producer and we look forward to future work to advance this project toward that goal.
In addition to Canariaco, the company has several other high quality exploration projects in various stages of exploration for precious and base metals. These projects will be drilled this year and when they begin drilling we will update our readers.
Between the company’s Canariaco project and their other exploration projects, they will have a busy year of drilling ahead. Future drilling at Canariaco will be focused on increasing the resource and moving resources into reserve categories. With base metals under heavy demand and aggressive price increases, new mines are in need and this project has strong potential of being a mine in the future. We will be following developments closely and feel the company is a good one for our readers to learn more about.
Candente’s stock symbol is DNT and the shares trade on the Toronto Stock Exchange. Their website is www.candente.com. Their website contains past news releases and additional information to do your own due diligence.
Exmin Resources Inc.
Exmin came to our attention at the recent PDAC conference in Toronto in March. At this conference there were many junior exploration companies exhibiting. What made Exmin stand out to us are the people managing the company and the quality of their projects. We are not currently a shareholder but will be purchasing shares in the future.
A few of the people involved in managing this company where involved in the past with Minefinders Corporation. Minefinders has had a great deal of success in Mexico because of a major discovery of silver and gold. They have grown from a tiny exploration company into a much larger company with a stock price in the $10.00 per share range. Some of the people that were instrumental in the success story that Minefinders has become are now managing Exmin. We feel that this team knows the exploration business in Mexico very well and have put together a group of projects that could lead them to being another success story in Mexico.
The company has three main projects in the Sierra Madre gold belt in northern Mexico. Two of the projects have major mining companies as partners and they are exploring one on their own.
One of those projects is the Reyna de Oro project, which is 100% owned by Exmin. The highlights of past drilling by Exmin in 2004 and 2005 returned multiple 10-30 meter intersections of grades between 2 and 4 grams of gold per tonne. There has been small scale past production on this project by local miners. Future drilling will begin shortly and will focus on two goals. One of those goals is further drilling where the past producing mine is located to complete a resource calculation. The other goal is to drill the extension of favorable rock that extends for two kilometers from the past producing area. These claims are within ten kilometers from Glamis Gold’s El Sauzal deposit that is a 2 million ounce gold mine.
Another of the projects is Maguarichic. The claims cover 39 000 hectares, Exmin and Penoles have a joint venture on this project. Penoles is the largest silver producer in the world and the second largest mining company in Mexico. Penoles also owns the ground that is adjacent to Exmin’s project. Penoles is required to spend $3.5 million in exploration to earn a 65% interest in the joint venture with Exmin and to earn an additional 10% they have to complete a pre-feasibility study. Large mining companies do their homework and are only interested in getting involved with projects that have large scale mining potential.
Another of the projects is Moris, a joint venture project between Mauricio Hochschild (a private Peruvian major mining company) and Exmin. This project covers 11 000 hectares, and there has been historic production in the area. The geology of Exmin’s project is very similar to the mine in the area.
Exmin is scheduling to drill these three projects in the near future. The first project scheduled to be drilled will be the Reyna de Oro project and should start sometime in June. We look forward to drilling beginning on all these projects and seeing the results from that drilling.
Exmin’s stock symbol is EXM and the shares trade on the Toronto Stock Exchange Venture market. Their website is www.exmin.com. Their website contains past news releases and additional information to do your own due diligence.
Kodiak Exploration Ltd.
Kodiak also came to our attention at the recent PDAC conference in March in Toronto. There was a lot of buzz at the conference regarding this company and we took the opportunity to try and learn about their project. We are not currently shareholders but will be buying shares in the future.
What had created a great deal of interest about this company was a large geophysical target and high grade surface sample results. In fact this project was presented as a Voisey’s Bay type of target. For our readers that aren’t familiar with Voisey’s Bay, it was a large base metal discovery that was made by Diamond Fields Resources and turned the company into a huge winner in the 1990’s. When we hear that a project has the potential of being a huge winner like this, we normally take it with a grain of salt.
However, upon further investigation, we found that this view might not be wishful thinking after all. What we found was that they have a large geophysical anomaly. If that was all they had we would have continued to be highly skeptical but in addition to that they had completed a significant amount of surface sampling. The surface sampling returned extremely high grades of copper and nickel.
When the company drilled they found that they had intersected massive sulphides. The stock took off after these developments and reached a high over $3.00 per share. It would be fair to say that at that price they were fully priced for perfection. Then they announced the lab results and in our opinion they were very interesting but the market wasn’t looking for “interesting”, they were looking for extremely high grades. When they didn’t see those extremely high grades the stock was hammered and they are currently trading at under $1.00.
We feel the market got way overheated on the potential and is currently most likely overly negative. The geophysical anomaly is still large and they have only really drill tested a small portion of that anomaly. They have drilled into attractive grades that are near surface.
The bottom-line is that this project needs a great deal more drilling to figure out what they have. The potential is still there and we look forward to further drilling to understand the realistic potential of this project. Stay tuned – maybe this project still has Voisey’s Bay type of potential; only time and further drilling will reveal the answer to this question.
Kodiak’s stock symbol is KXL and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.kodiakexp.com. Their website contains past news releases and additional information to do your own due diligence.
OUR REPORT CARD
We are not big fans of shameless self-promotion; we feel there is enough of that in the investment world. We are much more interested in allowing our research and results of the companies we feature in our reports to speak for themselves. To make it easier for our readers to analyze our past performance we include this section entitled "Our Report Card".
Before going on we would like to remind our readers of something we have all heard before: past performance is not always an accurate indicator of future returns. We are adding this section to make it easier for our readers and ourselves to quickly look at the past and what has transpired.
Good as Gold
Date of first report on price of gold November 01, 2005
Price of gold on that date $460.60 USD per ounce
Outlook in that report: bullish
Call in that report 10-30% upside move
Date of second report on price of gold Jan.16, 2006
Price of gold on that date $561.70 USD per ounce
Outlook in that report: bullish
Call in that report gold between $600.00 to $650.00 USD per ounce by the end of 2006
Current Price of gold $700.70 USD per ounce
In our past reports, we have discussed our bullish outlook on gold being based on supply and demand. We indicated we could see gold trade between $600.00 USD to $650.00 USD per ounce before the end of 2006. This view was based on supply and demand; we also felt the Federal Reserve is nearing an end to its interest rate increases. We felt that when the fed stops raising rates, the US Dollar would be in for a rougher ride. Although the fed has not stopped yet, the market is selling off and the dollar has been weakening and gold has been moving very aggressively. For those wanting to hedge or bet on a weakening dollar have few real strong currencies as alternatives, commodities are proving to be a better hedge. We have now met our projected price to happen before the end of the year in the first 4 months of the year. We feel now that there is a realistic potential of seeing gold reach $750.00 to $800.00 by the end of the year. Our main reason for raising our call so aggressively is due to continued weak supply and strong demand; as well gold is becoming an important player as a hedge against the weakness in the US Dollar.
A Silver Lining
Date of report on price of silver November 01, 2005
Price of silver on that date $7.47 USD per ounce
Outlook in that report: bullish
Call in that report 50-100% upside move
Date of second report on the price of silver Jan.16, 2006
Price of silver on that date $9.22 USD per ounce
Call in that report silver to trade between $10.00 to $15.00 by the end of 2006
Date of third report on the price of silver Mar.21, 2006
Price of silver on that date $10.48 USD per ounce
Call in that report for silver to reach $15.00 USD per ounce before the end of 2006
Current Price of silver $14.59 USD per ounce
In our past editions we explained why we felt that silver had the potential of outperforming gold on a percentage basis due to the supply and demand outlook for silver being stronger. Silver has now exceeded the 50% gain level we indicated in our Nov. 2005 edition and is nearing the 100% gain. Recently silver has been on a particularly strong trend. We feel that the main driver of this recent surge is due to the exchange traded fund (ETF) that recently began trading. Barclays is offering this fund, and they had to purchase a great deal of silver for this fund and this new buying has been a main factor in the recent price action. We feel that there will be a great deal of trading activity from this fund and this will have a positive affect on the price of silver. We now believe that not only will silver exceed $15.00 USD per ounce but with the new demand and liquidity from the new ETF that silver will reach $20.00 before the end of 2006.
A Copper penny for your thoughts
Date of report on price of copper November 01, 2005
Price of copper on that date $1.83 USD per pound
Outlook in that report: bullish
Call in that report for a move to around $2.10 per pound
Date of second report on the price of copper Jan.16, 2006
Price of copper on that date $2.13 USD per pound
Call in that report for copper to trade above $2.50 before the end of 2006
Date of third report on the price of copper Mar.21, 2006
Price of copper on that date $2.31 USD per pound
Call in that report for copper to pass $2.50 and reach $3.00 by the end of 2006
Current Price of copper $3.62 USD per pound
The price of Copper has been on a very impressive run recently. In our most recent report we made our argument of why we felt we could see copper pass the $3.00 price this year, mainly due to supply weakness and demand strength. A major factor of the recent movement was supply disruptions from existing mines. We feel the movement of copper after the announcement of supply disruptions is a strong indicator of just how tight the supply of copper is. It has been said before that copper has a PHD in economics; we feel this rule of thumb is correct and is an excellent indicator that if the global economy is growing, then copper demand is strong. The price movement of copper is telling us that the global economies are staying strong and are likely to increase the pace in the near term. We have strong evidence on the supply weakness of copper and that global demand will continue to be strong going forward. In this kind of environment it is easy to see copper prices to continue on its bullish run. We feel that we can see copper trade at over $4.00 per pound before the end of this year.
Past performance of our Favourite Treasure Hunters
Abacus Mining and Exploration
First featured in Sept.19 2005 edition
Price on that date $0.25 CDN
Second feature in Dec.07 2005 edition
Price on that date $0.36 CDN
Third feature in Jan.16 2006 edition
Price on that date $0.75 CDN
Fourth feature in Feb.7 2006 edition
Price on that date $0.96 CDN
Fifth feature in Mar.21 2006 Edition
Price on that date $0.73 CDN
Current price $0.84 CDN
Abacus is currently drilling on its project in the Afton mining camp; this is a very large drilling program scheduled for 25 000 meters throughout this year. The first phase of drilling this year is focused on following up on the company’s new discovery found in the 4th quarter of 2005. This new discovery is under the past producing Ajax pit, and was highlighted by a 400+ meter drill intersection with a grade of 0.69% copper equivalent. These kind of thick intersections make an explorer’s life a lot easier because they don’t need to step out drill a long way to have large tonnage. Drilling continues and recently the company has reported assay results from their first five holes of drilling. The results included all holes intersecting significant grades of copper over very long intervals. Those intersections ranged from 80 meters to 432 meters and the grades where between 0.33% to 2.3% copper equivalents. What was most exciting to us was that this zone has now been drilled with a strike length of 300 meters. This is very important because this project is quickly becoming a large tonnage target and with thick intersections over a 300 meter strike length this potential looks realistic. We are a shareholder and a consultant to the company.
Abacus’s stock symbol is AME and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.amemining.com. Their website contains past news releases and additional information to do your own due diligence.
Atna Resources
First featured in Jan.16 2006 Edition
Price on that date $2.17 CDN
Second featured in Feb.7 2006 edition
Price on that date $2.04
Third feature in Mar.21 2006 Edition
Price on that date $1.95 CDN
Current price $1.55 CDN
Recently Atna announced that Barrick Gold will be exercising their back in rights for a 70% interest in this claim by spending 30 million dollars to advance the Penson project. This will leave Atna with a 30% interest in the project. The market did not seem to like this news and knocked off a significant amount of market value very quickly. We feel that this reaction is overdone and misses some very important fundamental keys. Barrick will be picking up the exploration costs for the next 30 million dollars worth of work so Atna will not have to raise the funds by issuing new shares. If they were to have to fund this work they would have issued a lot of stock and thus would have diluted the current shareholders. In our opinion the dilution would have been very similar to having their interest drop from 70% to 30%. The biggest indicator that we feel the market is not recognizing is that Barrick does not look at small gold projects – they are only interested in developing deposits that are multi-million ounces of gold. Their decision to exercise their back in rights is a sign that they feel that the potential of this project meets their development criteria. We are a shareholder of the company at higher prices and are not concerned about the recent market reaction and are confident of the future of the company.
Atna’s stock symbol is ATN and the shares trade on the Toronto Stock Exchange. Their website is www.atna.com. Their website contains past news releases and additional information to do your own due diligence.
Bear Creek Mining
First featured in Sept.19 2005 edition
Price on that date $2.96 CDN
Second feature in Nov.1 2005 edition
Price on that date $3.20 CDN
Third feature in Feb.7 2006 edition
Price on that date $4.17 CDN
Fourth feature in Mar.21 2006 Edition
Price on that date $5.96 CDN
Current price $5.08 CDN
Since we originally featured Bear Creek in our first edition the company has passed through several milestones that are leading this company toward an outstanding future. The company’s silver project is progressing at a very rapid pace. The company has completed a pre-feasibility study and the size and economics are very impressive. Their first resource calculation indicates a resource of 250 million ounces of silver. Since that resource calculation, the company has added a great deal more drill holes that have not been included in the resource calculation. As drilling progresses, the company should be able to complete updates to the resource calculation. We look forward to these developments as well as news from drilling on the gold prospect they have on the project. This is an exceptional silver discovery that is being aggressively developed. A great deal of drilling is on going and will continue for the rest of this year. With the recent moves in silver prices and the potential for future upwards moves we feel Bear Creek will become a highly attractive company for silver investors. We are a shareholder of the company.
Bear Creek’s stock symbol is BCM and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.bearcreekmining.com. On their website you can find past news releases and additional information to do your own due diligence.
Exall Resources
First featured in Dec.07 2005 edition
Price on that date $1.34 CDN
Second feature in Mar. 21 2006 edition
Price on that date $1.68 CDN
Current price $1.89 CDN
Exall has been drilling their Red Lake, Ontario project since the start of 2006. The drilling was aimed at further drill testing to follow up on their high grade gold discovery in the Red Lake Gold Camp. Past drilling results have been outstanding, highlighted by very high grade gold intersections. We look forward to the results of this drilling as it will help to get a better understanding of the potential of this excellent gold discovery in one of the world’s most important gold camps. We are a shareholder of the company.
Exall’s stock symbol is EXL and the shares trade on the Toronto Stock Exchange. Their website is www.exall.com. Their website contains past news releases and additional information to do your own due diligence.
International PBX
First featured in Jan.16 2006 edition
Price on that date $0.59 CDN
Second feature in Feb.7 2006 edition
Price on that date $0.61 CDN
Third feature in Mar.21 2006 edition
Price on that date $0.60 CDN
Current price $0.73 CDN
International PBX has begun drilling on their Tabaco project in Chile and will be starting drilling shortly on the company’s Copaquire project. Tabaco has been drilled in the past and has intersected very promising grades of copper over significant intersections. It remains open to add size to this discovery and drill results are pending from the drilling that has been done so far in this latest phase of drilling. Copaquire, as we have mentioned in our past editions, is in an area of Chile were some major mines are located. In fact one of the world’s largest mines is the Callahousie mine and it is in the area, so it is fair to say the Copaquire has a good address. International PBX has done a limited amount of drilling in the past and has very good drill results. We look forward to the pending results from the drilling at Tabaco and the upcoming drilling at Copaquire. These two projects give the company the potential of a breakthrough for the company. Stay tuned – the company’s long term efforts in this country look to be rewarded in the near future. We are a shareholder and a consultant to the company.
International PBX’s stock symbol is PBX and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.internationalpbx.com. Their website contains past news releases and additional information to do your own due diligence.
Mountain Boy Minerals
First featured in Sept. 19 2005 edition
Price on that date $0.71 CDN
Second feature in Mar.21 2006 edition
Price on that date $0.59 CDN
Current price $0.59 CDN
Since Mountain Boy was first featured in our report the company has been waiting for winter to end and new drilling to begin. Drilling season were the company has made their discovery is coming shortly. This new drilling will be focused on following up on the past drilling success they have had. We look forward to the upcoming drilling season, most importantly, we will be watching closely for the results of that drilling. It is still a little early for Mountain Boy to come out of their winter hibernation but with drilling starting shortly they are about to wake up. If the new drilling is anything like the past we feel the company will have a very good year. We are a shareholder of the company.
Mountain Boy’s stock symbol is MTB and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.mountainboyminerals.ca. Their website contains past news releases and additional information to do your own due diligence.
Niblack Mining
First featured in Dec. 07 2005 edition
Price on that date $0.345 CDN
Second feature in Mar.21 2006 edition
Price on that date $0.80 CDN
Current price $0.88 CDN
As we have mentioned in our past reports when discussing Niblack Mining, this company was a spin-off of another of our favourite treasure hunters Abacus Mining and Exploration. The reason for the spin-off was simply because the management of Abacus felt that the value of the Niblack project was not being reflected in the market value of Abacus. Since the spin-off, Niblack was able to get a drilling program underway on the company’s project in Alaska. This project hadn’t seen any work since the mid 1990’s due to the low prices of metals at that time. It is a gold, silver, copper and zinc project that is much more attractive due to the large increases in the prices of these metals. There is a known resource on the project that is open for significant expansion. This year’s drilling season is quickly approaching and we look forward to the beginning of this drilling and the results from that drilling. We are a shareholder and a consultant to the company.
Niblack’s stock symbol is NIB and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.niblackmining.com. Their website contains past news releases and additional information to do your own due diligence.
Peru Copper
First featured in Nov.01 2005 edition
Price on that date $2.00 CDN
Second feature in Dec. 07 2005 edition
Price on that date $3.45 CDN
Third feature in Mar.21 2006 edition
Price on that date $3.37 CDN
Current price $4.64 CDN
Peru Copper has an exceptionally exciting project in Peru that is being aggressively developed. The main reason it is being aggressively worked is quite simply because the project has the potential of being a very large mine. Since we first featured the company they have completed a pre-feasibility study that indicates the economics of this project are robust. In fact, if it were in production today, it would be one of the top 15 mines in the world. Bringing this project into production will be costly because of its sheer size, and it is doubtful that Peru Copper could develop it alone. They would need a major mining company as a partner and the company has engaged an investment banking firm to look for strategic alternatives. We look forward to future economic assessment work on the project and any signs that a partner will be getting involved. We are very confident that these developments will happen mainly because the world is in short supply of copper and new production is needed. We are a shareholder of the company.
Peru Copper’s stock symbol is PCR and the shares trade on the Toronto Stock Exchange they also trade on the American Stock Exchange and the symbol is CUP. Their website is www.perucopper.com. On their website you can find past news releases and additional information to do your own due diligence.
Redstar Goldcorp.
First featured in Nov.01 2005 edition
Price on that date $0.12 CDN
Second feature in Dec. 07 2005 edition
Price on that date $0.10 CDN
Third feature in Feb.7 2006 edition
Price on that date 0.25 CDN
Fourth feature in Mar.21 2006 edition
Price on that date $0.35 CDN
Current price $0.36 CDN
Redstar made a new discovery of high grade gold when they drilled their project in Red Lake, Ontario in the 3rd quarter of 2005. Earlier this year they did a follow up drill program to further test this new discovery and assay results have recently been reported from four of the six holes drilled. The drilling found high grade gold in three of the four holes, and are giving the company a lot of information for planning future drilling to further understand this new discovery. New gold discoveries in Red Lake are very exciting because of the large high grade discoveries in the area. Redstar is a new player of companies that have found high grade gold in their drill holes from this area. In the early stages of a new discovery in this area we have seen the market value of companies making these discoveries move very aggressively. Redstar has the potential of seeing that happen in the future as they continue exploring this project. The project has a very large zone of favorable rock that has proved to contain high grade gold in the first eight drill holes that have been reported. Due to where this discovery is located, drilling can be done almost year round so follow up drilling can begin again shortly after the results from the current drilling have been received and interpreted. In addition to the Red Lake project they have 3 joint venture projects in Nevada that should see drilling in the near future. We look forward to the pending results from the company’s recent drilling and the upcoming drilling in Nevada and Red Lake. We are a shareholder and consultant to the company.
Redstar’s stock symbol is RGC and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.redstargold.com. On their website you can find past news releases and additional information to do your own due diligence.
Skygold Ventures
First featured in Sept. 19 2005 edition
Price on that date $0.65 CDN
Second feature in Nov.01 2005 edition
Price on that date $0.55 CDN
Third feature in Mar.21 edition
Price on that date $1.50 CDN
Current price $1.69 CDN
Since we first featured Skygold in our premier edition they have performed very well. This performance has been because of the company’s gold project in British Columbia, Canada in an area where gold has been found since the gold rush days. They have completed nearly 100 drill holes on this project and have had excellent results. The drilling has found a large area of low grade gold that has been found near surface. The company has recently raised over 13 million dollars to fund a 30 000 meter drill program on the project this year. Increasing the size of the discovery looks likely based on the past drilling and the geochemical anomaly that has been a very good indicator of the gold found below surface. When a major mining company looks at a project to develop a mine they look for the grade to be good enough for them to make a profit, and the tonnage large enough that they can have a long mine life. In Skygold’s discovery they have that kind of project and the discovery is at or near surface. We don’t believe that it is out of the question that major mining companies would be interested in this project to develop a mine. This year’s drilling has the potential of attracting a major mining company to co-develop the project or take the company over for this discovery. We are a shareholder of the company.
Skygold’s stock symbol is SKV and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.skygold.ca. Their website contains past news releases and additional information to do your own due diligence.
Strategic Merchant Bancorp.
First featured in Feb.7 2006 edition
Price on that date $0.85 CDN
Second feature in Mar.21 2006 edition
Price on that date $0.89 CDN
Current price $0.73 CDN
Strategic is in the process of completing a financing that will be finished shortly. The funds are being raised for the upcoming drilling on the company’s joint venture projects in Nevada. Scheduling of that drilling is underway and we should hear shortly of when the drilling will be underway. The company has three projects in Nevada and the first one that will be drilled will be the Pine Nut project. Pine Nut is in western Nevada, it has seen a small amount of drilling but requires a great deal more to further test the potential of this project. Following the drilling on Pine Nut, the North Bullfrog project will begin, followed by the Dry Gulch project. All these projects are tentatively scheduled to take place during this summer and Pine Nut should be underway sometime in June. The common theme of why these projects were selected is they where all picked out from a geological database developed by Anglo Ashanti Goldfields. This is a comprehensive database that was used to choose these high quality exploration projects. We look forward to the upcoming drilling and the results from that drilling. We are a shareholder and consultant to the company.
Strategic’s stock symbol is SMB and the shares trade on the Toronto Stock Exchange Venture Market. Their website is www.strategicmerchantbancorp.com. On their website you can find past news releases and additional information to do your own due diligence.
Wolfden Mining
First featured in Jan.16 2006 edition
Price on that date $3.77 CDN
Second feature in Mar.21 2006 edition
Price on that date $3.70 CDN
Current price $4.12 CDN
Wolfden has been very busy for some time now. We have been very impressed since we first started featuring the company because of their gold projects in Red Lake, Ontario. A very pleasant surprise recently was that the company got very aggressive with their base metal projects in Nunavut, Canada. They have bought mining facilities and deposits that collectively enhance the projects they had been developing on their own. The company has also recently announced plans to split the company into two. This would give current shareholders shares in two companies, one being a Wolfden Gold Company and the other a Wolfden Base Metal Company. Wolfden Gold would be focused on developing their gold projects in Red Lake and Wolfden Base Metals would be focused on becoming a base metal producer. We feel this is an excellent plan that will unlock the value of these groups of assets, making it clearer for investors to evaluate the base metal and gold assets the company has been developing. We look forward to news on all these factors and feel the management of the company is doing an excellent job to unlock shareholder value into the future. We are a shareholder of the company.
Wolfden’s stock symbol is WLF and the shares trade on the Toronto Stock Exchange. Their website is www.wolfdenresources.com. Their website contains past news releases and additional information to do your own due diligence.
Overall Report Card on Metals and Our Favourite Treasure Hunters
Again we would like to add that the numbers and returns are only for comparison purposes. We are not giving investment advice or recommending these stocks for buying or selling; we advise our readers to read the disclaimer at the end of this report.
We think the fairest way to evaluate the past performance of the companies featured in our past reports is to use an equal dollar amount invested in each company on the date they were featured. Again, we advise our readers to remember that past performance is not always an accurate indicator of future returns.
Having said that, the group of companies we have featured has above average performance and we are comfortable having readers compare our results to other newsletter writers and analysts.
We also believe that the performance is a good indicator that our philosophy of picking companies makes sense. We will continue to search out and report companies that have quality projects and quality people and market values that are reasonable to undervalued with the potential of their market values increasing.
We are not going to give ourselves a grade until we have published this report for at least a year. We also think that we would give ourselves a lower grade than most of our readers would, simply because our performance is based on less than one year of publishing this report. We believe that the highest marks go to analysts and newsletter writers who are able to have above average returns for several years.
WHAT MAKES THE ALLAN BARRY REPORT UNIQUE
For the last 12 years, the editor of this report has had a career as a consultant to publicly traded junior exploration companies. Services provided to these companies include investor relations, corporate communications, strategic planning, and fund-raising.
As an investor relations consultant to small companies, one has to wear several hats:
* communicating the company’s efforts to the investing community;
* communicating technical aspects of those efforts;
* being involved in raising funds for drilling and exploration;
* being involved in the technical analysis;
* and reporting of what has been found.
These efforts have provided a unique opportunity to learn, from an insider’s perspective, the challenges that junior exploration companies face. Additionally it has opened doors to meeting a very accomplished group of technical people.
Spending this time as a consultant to junior exploration companies has provided a unique perspective that is an asset few analysts or newsletter writers possess.
IN CLOSING
We would like to take this opportunity to thank you for taking the time to read this report. We hope this information proves to be informative and helpful. We ask the reader not to post this report on any website for at least three days after you receive it and that if it is posted to post the entire report without any editing. We invite our readers to pass on our contact information to anybody they feel may be interested in receiving this report or future reports and we would be glad to add them to our email list for future publications.
There is no charge for this publication. In order to be added to our email list we need your name, phone number and email address. You can call us on our toll free number at 1-877-574-4575 or locally at 604-574-4575 or email allanbl@shaw.ca with the above information.
Regards,
Allan Barry Laboucan,
Editor & Writer
Allan Barry Reports
Disclaimer: The information included in this Allan Barry Report on Precious and Base Metal Exploration is for information purposes only. No statement or _expression of opinion, or any other matters herein, directly or indirectly, is an offer, solicitation or recommendation to buy or sell any securities mentioned. The information contained in this e-mail is drawn from sources believed to be reliable, but the accuracy and completeness of the information is not guaranteed, nor in providing it does the editor Allan Barry Laboucan or his companies, or affiliated companies, assume any liability. We do not receive or request compensation in any form in order to feature companies mentioned herein. The editor may have equity positions in companies referenced in this newsletter, or plans on taking a position, or offers consulting services to these companies and will notify the reader of these positions or services provided to the company in the section of the report on each individual company. The editor his personal company or affiliated companies, disclaims all responsibility and accepts no liability (including negligence) for the consequences for any person acting, or refraining from acting, on the information provided in this publication.
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