DLKM riding miner’s coattail in TanzaniaI was poking around the Internet looking for a DLKM research report and found this article by Thom Calandra who claims he was the one who approved the negative Stockhouse reviews on DLKM. While it isn't a great article, it is not a bad one either. In case my hyperlink below doesn't work, I will copy the article below this link. It's worth a read. It also includes a photo of Reyno Scheppers. Now at least we now know Reyno is real and not more tall tales that we come to expect from the esteemed former pres of DLKM.
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Link to article.
https://www.stockhouse.com/Columnists/2011/Jun/23/Gold-junior-s-property-spinoff-has-more-potential
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While one Bulletin-Board explorer hitches a ride on the miner's Tanzanian coattail
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DAR ES SALAAM, Tanzania – Douglas Lake Minerals is riding a miner’s coattail in Tanzania.
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The Canada-run yet USA-traded gold prospector is fast to tell anyone that it controls a wad of land surrounding Canaco Resources’ neat-looking gold district at Handeni, a five-hour drive north west of the cosmopolitan city of Dar es Salaam.
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Maybe this is why long time South Africa geologist and Douglas Lake Minerals consultant Reyno Scheeperstells me sotto voce in seaside Dar, “Tanzania is becoming a bit like your Colorado; people learn more here in a pub than they do out in the field.”
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The equation for our audience: Does Douglas Lake’s(OTC:BB: DLKM, Stock Forum) sprawl of jungle equal Canaco’s Magambazi prospect times 2? Or even 1? Or does the prospector’s property purchase in gorgeous Tanzania amount to a waste of rig time and shareholder money?
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“We have 12 targets and we’ll generate more,” says Dr. Scheepers, an economic geology doctorate. Dr. Scheepers on this morning (Tuesday) brings me the case for close-ology in seaside Dar. It is one day after I have kicked rocks and viewed core at Canaco’s (TSX: V.CAN, Stock Forum) Magambazi project at Handeni.
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Let’s be candid here. I know the Douglas Lake rap. Our Stockhouse team’sPeter Kennedy painted across its USA bulletin-board DLKM ticker several red flags. I edited the reports. The research cites cease-trading orders and matters related to Douglas Lake CEO Harp Sangha of Surrey, British Columbia. Those reports, once again written under my supervision earlier this year and in 2010, are here for you to peruse: Stockhouse Short Report II. And Stockhouse Short Report I.
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I come to East Africa this week not for Douglas Lake Minerals but to see Canaco’s Magambazi and its looming spinoff, the Harvest gold and copper project in Ethiopia. I am glad I did. Magambazi already is a wealth winner for its Canaco backers. Harvest in Ethiopia, via looming spinoff Tigray Resources, likely will match and maybe exceed Canaco’s stock market success (currently $720 million Canadian). Such an equity feat by Tigray/Canaco would equal, if I may mix country metaphors here, a Zanzibar of spiced riches for shareholders. (See: Cradle of Metal in Ethiopia)
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Even competitors get pumped about the Tigray spinoff, almost surely to be scheduled via Canada ticker TIG after Canaco’s annual meeting tomorrow (Friday) in Vancouver, Canada. “As good as Canaco’s Handeni is, apparently its property in Ethiopia has more potential,” says Tom Neelands, vice president of exploration for Tanzania neighbour Midlands Minerals (TSX: V.MEX, Stock Forum).
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Mr. Neelands, whom I met last month in Ghana at the Midlands gold property, continues, “They have Iain Groves, and he is very good from what I am told. In fact, they are very lucky to have the Groves (son Iain and father Dr. David Groves) working for them.”
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Iain M. Groves is an Australian geologist who advises Canaco on its Tanzania and Ethiopia properties and on interests related to Canaco CEO Andrew Lee Smith. Iain’s father, David Groves, is a professor at the University of Western Australia in Perth and an aficionado on Archean gold deposits.
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Allow me to return to Douglas Lake Minerals, in the interest of those seekingintensely speculative gold projects. I do not own the shares and never will own them ... or any USA bulletin-board stock from here on out, for that matter. (Punto final.) But clearly, DLKM shares, with a worth of US$140 million, are gyrating even against a Tanzanian waterfall of paper issuance for its properties.
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Academic in prospectors’ garb
Dr. Scheepers at our Dar meeting, a breakfast at the Sea Cliff Hotel, explained that Douglas Lake has a fresh batch of cash: some $12 million via a March placement of 45-cent stock that went in part to New York City’s Rodman & Renshaw.
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Douglas Lake intends to use the cash for a 12-hole targeted drill campaign starting precisely July 25, Dr. Scheepers says. “We don’t feel like we need to hit on the first hole as Canaco did at Magambazi,” he told me when I asked about the need for speed. “They (Canaco) went right to where the artisanals (local miners) were congregating. Ours is a shear zone deposit and quite large. We’ll be digging in and around our Kwandege prospect for a long time.”
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When I responded, ‘Well, if you were at Canaco at the time, would you have targeted your first poke right above artisanal workings?’ Dr. Scheepers answered, graciously, “Yes of course I would have.”
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East Africa has been good to Reyno Scheepers. He is 54, hails from South Africa and lives in Tanzania. (His picture is above – Thom Calandra photo)
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One miner described Dr. Scheepers to me as “a professor in prospectors’ clothes.” I have heard such descriptions before, about two years ago just before I went to visit Dr. Dan McCoy at Keegan Resources’ Esaase Project in Ghana. Like Canaco, Keegan (TSX: T.KGN, Stock Forum and KGN) hit big-time on its first poke, three or so years ago now, and continuing results have brought vast wealth to shareholders.
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I liked Dr. Dan in person and in practice. I also enjoyed Dr. Scheepers when I met him this week.
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The gangly professor cast his lot with Afgem in the 1990s. The company’stanzanite mine in the foothills of Tanzania’s MountKilimanjaro transformed Afgem into TanzaniteOne, a London-traded company whose fortunes soared and waned with the lovely tanzanite gem, said to be discovered 45 years ago. TanzaniteOne still exists and trades in London as TNZ. Its five-year chart, pity, looks like the trek back down Mount K. (See chart here.)
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Dr. Scheepers has continuing interests in gems, largely his work for IPP Resources, a private company with a tanzanite mine and with gold properties in northern Tanzania at Lake Victoria. By the way, IPP also owns about half of the shares of Douglas Lake Minerals, Reyno Scheepers tells me.
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Douglas Lake’s (and Canaco’s) timely ownership of Handeni and surrounding parcels occurred in the wake of what to me appear to be administrative missteps by Midlands Minerals, our long time Ghana gold prospector. The area appears hosted by amphibolites and by gneiss, according to an examination of the splendid looking rock and clinically assembled core samples on Canaco property. (Photo here: Chief Canaco geologist Denis Dillip, center, with a local geologist, a writer and a bank analyst this week at Magambazi – Meghan Brown photo)
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What makes me nervous about Douglas Lake Minerals is its insistence by CEO Harp Sangh (with whom I have spoken), with emphasis by Dr. Scheepers and in most of its published materials that the company holds “the eastward extension of the Magambazi mineralized trend” and has “the largest land position in the New Kilindi-Handeni Gold District that is emerging in Tanzania.”
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I especially am opposed to close-ology phraseology such as this: “Handeni adjacent to Canaco but 4x the land package … Believed area could possibly be host to the extension of Canaco’s Magambazi high-grade gold mineralization occurrence … Canaco share price increased dramatically on the results of their Magambazi Gold Project …”
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Certainly, if Douglas Lake hits on its first few pokes in the dirt, all bulletin-board heck will break loose. In all, the company sees 33 holes covering 5,000 meters in the coming Tanzania dry season. DLKM also hired a full-time exploration chief from South Africa; Bernard Macdonald arrives in Tanzania July 15. In addition, aerial electro-magnetics are scheduled for August.
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That is all for now. I will have an on-site report about Canaco and its Handeni holdings, and in particular its prolific and environmentally gentle drilling-out of Magambazi, in coming days via Stockhouse. (I do not own Canaco shares.)