As we wait for news, I've put together some of the highlights to remind us why we became Halo shareholders in the first place.
HALO RESOURCES HIGHLIGHTS
- Cashed Up
- Tight Share Structure, Limited Float
- Impressive Results Near Surface Amenable to Open Pit
- JV’s with Hudbay and Goldcorp
- 43-101 Resource Estimate of 22 Million Tonnes
- Potential Producer in 2011
- Lots of Blue Sky Potential
- Copper at Historic Highs
- Hudbay Minerals, RBC and Pinetree Capital own Significant Positions
The Opportunity
Halo Resources has a proven 22 million tonne NI 43-101 compliant resource estimate, joint venture partnerships with mining giants Hudbay Minerals (TSX:HBM)(NYSE:HBM) and Goldcorp (GG:NYSE)(G:TSX) and immense blue sky potential within the 100% owned 200-square kilometer Sherridon VMS District which includes the former producing East-West copper-zinc mine that produced almost 8 million tonnes grading 2.5% copper and 5% zinc.
Fundamentals
Cash in Bank: $4,300,000 (includes latest flow through private placement)
Shares Outstanding: 29,000,000 (10,000,000 of those shares are restricted until April 23, 2011 and beyond)
Market Cap: $14,200,000 (as of Mar. 21, 2011 trading at $.49)
Recent Results
Results from the Sherridon VMS Property Located in mining friendly Manitoba
Feb. 23, 2011 - 0.99 g/t gold, 24.06 g/t silver, 2.06% copper and 7.74% zinc over 7.97 meters
Dec. 1, 2010 - 2.3% Copper and 7.5% Zinc Over 6.8 Meters
Nov. 12, 2010 - 3.3% Copper and 8.6% Zinc Over 7.3 Meters
May 25, 2010 - 0.7% copper, 5.2% zinc, 4.8 g/t silver and 1.1 g/t gold over 7.8 meters
May 4, 2010 - 2.7% copper, 4.1% zinc, 47 g/t silver and 2.6 g/t gold over 17.3 meters
Hudbay and Goldcorp Joint Ventures
Hudbay Minerals has an option agreement on a 1.1 sq km package that hosts the Cold and Lost deposits within the 200 sq km Sherridon VMS property in which Hudbay can earn up to 67.5% of the JV property for cash payments of $6.3 million if fully exercised.
The Goldcorp Joint Venture is exploring 15 sq. km. located 25 km west of the Red Lake mines which have produced 25 million ounces of gold. Relatively unexplored for 70 years, recent field programs identified samples with up to 172 g/t gold, 6% nickel and 2% cobalt coincident with geophysical anomalies.
NI 43-101 Compliant Resource Estimate – 22 Million Tonnes
Sherridon VMS Property in Manitoba – Resource estimate includes 6.5 million tonnes grading 0.85% copper and 1.22% zincas Indicated Resources and an additional 15.9 million tonnes grading 0.68% copper and 0.84 % zinc as Inferred Resources with precious metal credits. At least 75% of the material in both categories is contained within potentially economic open pits.
*Updated NI-43-101 anticipated from Hudbay which should increase known resource
Potential Near-Term Producer
Joint Venture Partner HudBay (located approximately 70 km from Halo’s Sherridon property), will require additional new feed in 2011 for its Flin Flon mill as its Trout Lake mine winds down after 18 years in operation. Hudbay’s 777 mine will continue to supply approx. 4,000 tonnes per day to the 6,000 tonne per day mill, leaving a shortfall of approx. 2,000 tonnes per day. This presents an opportunity for Halo to potentially satisfy HudBay’s near-term ore requirements.
“Halo is optimistic that Lost deposit has the potential to provide mill feed to HudBay's facilities in Flin Flon". - Lynda Bloom (Halo President and CEO)
“Lost Lake project provides unique opportunity to direct ship ore to the (Hudbay) Flin Flon concentrator recognizing that in late 2011 the feed from our Trout Lake operation will be diminishing" – Kelly Gilmore (Hudbay Chief Exploration Geologist)
Net Smelter Royalty (NSR) - $50,000 in Monthly Cash Flow
Halo has a 1% NSR on Metanor Resources' (MTO: TSX-V) Bachelor Lake Mine in Quebec, which is expected to go into production in 2012 and is anticipated to generate approx. $50,000 of cash flow per month for Halo when underground mining commences.
Blue Sky Potential
The Sherridon VMS Property covers an area of over 20,876 hectares and hosts the past-producing Sherridon Mine that was operated by Sherritt Gordon Mines from 1933 to 1950 and produced 7.7 million tonnes of ore with recovered grades of 2.46% copper and 0.8% zinc. The property currently consists of the Bob, Jungle, Cold, and Lost deposits, all with mineralization focused in copper and zinc.
An airborne survey has found geophysical anomalies that extend the Cold – Lost corridor to the north and to the west by several kilometers.
Geophysical surveys have also found anomalies that are now additional targets, found one kilometre (km) to the east of the Lost deposit – out of the HudBay joint venture area and into the 100% Halo owned property.
This effectively confirms the Cold – Lost deposit expands into the area 100% owned by Halo. The large majority of Sherridon property is still 100% owned by Halo, and as with this example, this is likely to include a lot of mineralization and yet-undiscovered deposits. In themselves these are likely to offer further business ventures for Halo going forward.
Ownership
Hudbay Minerals - 3,900,000 common shares of Halo Resources
Pinetree Capital – 3,300,000 common shares of Halo Resources
*As per System for Electronic Disclosure by Insiders (SEDI)
Pending Events – Anticipated Dateline
- March/April 2011 - Updated NI 43-101 Resource Estimate from Hudbay which will include latest results from Cold-Lost area.
- March/April 2011 – Results from 8 drill holes testing three new targets in Sherridon (Second Lens at Bob, Sherlett Area, Fidelity South/Jonah)
- 2011 - Commence engineering studies to develop a simple, low cost, bulk mining effort, starting with shallow open pits
- 2011 – Decision by Hudbay Whether to Proceed Taking Halo JV Property into Production
As always, the above is my opinion. I have tried to be as accurate as possible, however, you should not rely on any of the above information and should do your own due diligence before investing in Halo or any other company.
Still long on Halo and anxious to see what the next few months will bring.
Regards,
The 300