First timeer- spreading the newsGold is the standard!
Midas Letter publisher James West believes gold is the store of value everybody resorts to when times are rough. Interview with The Gold Report.
Author: The Gold Report
Posted: Saturday , 06 Mar 2010
VANCOUVER, BC -
TGR: James, can you give us a couple of stocks that you like?
JW: I'm going to start with North America-I'll go by region as opposed to commodity. In North America, the one that I like the most recently-and not least of which because I bought 50,000 shares at 20 cents-is Western Pacific Resources (TSX.V:WRP) . The reason I like this company is because the exploration team, which was previously with Nevada Pacific, and then left U.S. Gold (TSX:UXG, NYSE.A:UXG), after U.S. Gold took over Nevada Pacific, and these guys staked a property in Nevada for $28,000 that has produced 600,000 ounces of gold historically and has a historic resource that we can't really talk about because it's not really 43-101.
So, this is a company with an exploration team and a financial team behind it that has historically and repeatedly taken a startup, put a few properties into it, explored the properties and discarded or amended their exploration portfolio in time. But ultimately, they have added sufficient value to the share price in a relatively short period of time so that investors are able to exit those investments in 6-12-18 months at 100%, 200%, 300%, 400%. So, they fit our profile, and Western Pacific is the latest offering from this group, which includes Simon Ridgeway, Mario Satlander, Ralph Rushton and Warwick Smith, who is actually the president of the company. These guys have done just a bang-up job on other companies, all of which have done very well and appreciated in value for their shareholders-Northland Resources (TSX:NAU), Fortuna Silver (FVI.TO), etc.
TGR: They have serial success stories.
JW: Yes, they're serial entrepreneurs with a track record of adding value. So, I like Western Pacific. Another one in that group is Focus Ventures (TSX.V:FCV). They're in Peru, and they're drilling right now. They're drilling a stage-two program, and I happened to be on their property just the week before they started drilling their stage one; so I was able to actually visit the underground workings. They're working on a mine just 38 kilometers north of Juarez, which is within 35 kilometers of the 10 million ounce Pierina deposit owned by Barrick Gold; so they're drilling on similar geology that suggests the owners of the mine have been underground mining this mine at the rate of 150 tons per day for 28 years without any sort of exploration. These guys are now going in with modern, best practices, exploration techniques because after all the data evaluation, they believe there is true potential for a million-ounce disseminated deposit. And so, again, looking at the exploration team and the financial team, this is a company that is going to perform well, and, in fact, since we first recommended it, shortly after my visit, the company has now doubled in value, and a lot of our subscribers exited the investment at the double and so pocketed 100%.
TGR: Any others on your radar?
JW: There's one more in North America that I would like to talk about quickly, and that is Mosquito Consolidated Gold Mines (TSX.V:MSQ). Mosquito actually owns the largest molybdenum deposit in the world, in Idaho, called the Tumo Deposit. Molybdenum has sort of fallen out of favor but a lot of the metal analysts around the world are looking at developments and saying, "Well, given the availability of molybdenum and its requirement in the production of steel, I'm sure steel demand has gone down dramatically in the downturn." There's a lot of analysis out there to suggest that this won't return to euphoric levels of $40/pound-where it was at the height of the commodities bubble-and be profitable to mine. The deposit is valued at a minimum of $16 billion with all the discounts for net present value in an economic pre-feasibility study that was updated last year. Brian McClain, the president of the company, has been able to attract the Chinese investor, who is the president of a company that is one of the biggest-now, I'm not sure whether it's steel manufacturing or a commodities group in general-but these are guys who can raise the $2 billion that is necessary to put this deposit into production on the scale that it needs to be in.
So, certainly when the price of molybdenum goes to where it's going to go-and considering the fact that the market value of Mosquito is below $100 million-this is an opportunity where molybdenum goes up and these guys announce that they've got the money to put this thing into production, this is a stock that could go from a dollar to $20 in 6 to 12 months, and will be a 1%, 2%, 3%, 4%, 5%, 600% return for investors in that timeframe.
In Colombia right now, I do like Antioquia Gold (TSX.V:AGD). I just came back from a site visit. In Antioquia, they've got a mesothermal deposit where they've had some very encouraging intercepts. They just drilled a shallow program, and they're going to start drilling again in March, April at the latest. Mesothermal deposits, by nature, get much richer the deeper they go. And being in Colombia-and in the Antioquia Batholith-the potential for a world-class deposit is very good, especially considering what has happened with Ventana and Greystar Resources Ltd. (TSX.V:GSL). And Antioquia Gold has a 5,000-acre package on this property where they have 40, over 40, traditional "garimpeiros" (artisanal gold miners) operations, and where they still got garimpeiros pulling ore out veins that they chase. And so, Antioquia Gold, they're going to start this next drill program; that makes them a very hot one to me because they're in the 40 to 50 cent range right now, and if they hit anything that looks like Ventana or Greystar-this is a stock that is going to do 500% to 600% in the 6 to 12 month period very easily.
TGR: Well, it seems to be under a little pressure here. The stock has drifted back to what looks like a base. Any particular reason for that or is it just the run-up in the Colombian stocks and some profit taking?
JW: Yes, exactly; they did a private placement and, by my calculations, I think that closed in September.
Now, I believe you're going to see the price of Antioquia appreciate in the very near term on increasing volume as the company comes closer to drilling because there are a lot of newsletter writers following the deal. On the tour I went on, there was Bob Moriarty, Thom Calandra from Ticker Tracks, and just a raft of investors and institutional brokers from around the world who were all very impressed with the methodology being employed by Antioquia; they're very methodical. In terms of the social aspect, which is huge in Colombia when putting the money together, they've already dotted the i's and crossed the t's. They've got all kinds of programs running for the area in which they're working.
From an environmental standpoint, they're already doing the baseline studies. This is a company that is getting ready for the "big win." They're doing it properly, and you look at the management team and, here again, you've got guys with a history of bringing value to companies that they manage.
TGR: Great. This has been quite an interview today. I appreciate your giving us the time.
Publisher of theMidas Letter, James West has devoted 20 years to helping small companies in the resource sector-helping them raise money, further their projects, build their identities and get their stories in front of investors on the lookout for quality investments with excellent returns.
Article published courtesy of The Gold Report - www.theaureport.com