The latest Tinka update on 'The Fundamental View' Thursday, January 10, 2013
Tinka Resources Resumes Drilling On Both The Colquipucro and Ayawilca Projects
Only two days after announcing very prommising results, Tinka has announced today that drilling has resumed on both the Colquipucro and Ayawilca projects;
Tinka Resumes Drilling at Colquipucro and Ayawilca Projects, Peru
Tinka Resources Limited (the “Company”), (TSXV:TK) (Frankfurt:TLD) (OTCPK:TKRFF), announces that the Company has resumed drilling at both the Colquipucro and Ayawilca projects, west-central Peru. At Colquipucro, the Company has the necessary permits in place to conduct a third phase drilling program. In-fill drilling will be done along the existing drill sections and along intervening sections spaced 50 metres apart. The objective of the phase 3 drill program is to upgrade the NI43-101 compliant silver resource, and core from the program will used for further metallurgical studies. At Ayawilca, drilling will continue to test a series of large 3-D inversion, induced polarization (IP) anomalies that span a distance of 1,200 metres east-west; the anomalies remain open to the east. The Company has filed an amendment to the existing drill permit for a further 84 drill platforms covering the anomalies identified by geophysics so far.
Anyone who might have doubted the seriousness of this project need only read the highlighted sections above (my emphasis). To get a further idea of the potential upside for this company noted in yesterday’s news release. The following graphic should give you an understanding of the sheer magnitude of the area being drilled. Expect a heavy dose of news from the company during the first quarter of 2013. My valuation model that I spoke about in one of my prior updates remains in tact.
The purpose of the 2013 drill programs is twofold:
1. As we have discussed previously, the primary goal at Coquipucro is to expand the known silver resource (currently 32.7mm ounces inferred Ag) while reclassifying the resource as “measured and indicated”.
2. To further define and expand upon the impressive massive sulphide discovery where multiple high-grade zinc intercepts with impressive widths have been reported over a 600-metre strike length.
Shareholders that jumped on Tinka early are reaping significant rewards, up almost 500% since I first wrote about it and up 197% in 2012 alone.
Keep in mind that the company is fully funded for the upcoming drill program and using an $80mm market capitalization, the company is valued at just 8% of the $1 billionof in situ metal value for Zone One. What gives this company the often talked about “blue sky” potential is any valuation Ayawilca.
Most agree that the junior mining and exploration space has been depressed long enough and many experts, including myself believe that the venture exchange and junior exploration companies are going to grab much of the headlines this coming year. We can fairly estimate that one we get some normalization in this exploration market, a range 10-15% of in situ metal value will significantly enhance TK’s value, especially after the in-fill drilling is completed in 2013.
Yesterday’s sell on news dip (not anything unusual in the junior mining space) was perhaps expected given that the stock had completed a healthy rise from the .70 cent level to new all-time highs of $1.05. These type of pull-backs are often expected. Most little investors quite honestly, and will all due respect, don’t know how to interpret drill results. As I indicated in one of my last write-ups of Tinka, in order to become a mine, a company must show 30 million tonnes of 5% zinc. I’ve already spelled out results from drilling thus far but what I placed great importance in from the press release of 2 days ago is that the company had 70 m of 4.8% zinc. This is an amazing number when you couple it with prior results and sections within that 70m ranging from 8.9% to 10.9% zinc, the latter over a 12.5m section.
I would highly recommend using dips to add to positions because this company, more than any other I see out there right now is definitely on to something and the fact that dilution is low and the company is starting to attract a lot of attention, it won’t take much before being able to buy Tinka at these levels is gone.
Please read my disclaimer. The information contained herein is not intended to be a recommendation to buy or sell. Please consult your own licenced broker or investment professional and recognize that with any investment risks may always be present.
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