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No Bull For Small Fry

Thom Calandra Thom Calandra, www.thomcalandra.com
0 Comments| September 24, 2010

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VANCOUVER, B.C. – Raising money ain’t easy for small prospectors, even with the accelerated interest in commodities.

“We’re market dependent. We know we have to go to the market (for money,” says Craig Schneider of Corex Gold Corp. (TSX: V.CGE, Stock Forum), a Mexico prospector with a $22 million stock market worth. But this is no bull market for explorers of our size and timeline.”

Corex has 8,000 hectares of property in the state of Sonora down in Mexico. Geologist Bruno Barde already has overseen 9,000 meters of drilling – some 70 holes. He likes the chances of a large copper-gold porphyry system.

“I am hoping the pure exploration companies like us get discovered by the market,” Mr. Barde says. To Corex’s credit, Gammon Gold Inc. (TSX: T.GAM, Stock Forum), another Mexico miner, took part in a recent financing, a private placement of equity.

But the clock is ticking even with $4.5 million in the bank. Corex hopes to raise cash that will take it across another 20,000 meters for a total cost of $8 million. A number of already sunk holes have shown gold-equivalent graded of 0.9 grams per tonne and better. “We like the breccias, broad and oxidized,” Barde, VP of exploration, says.

Craig Schneider says he will be on the road “marketing” the next six months” to get more cash – almost certainly through a private placement.

Short form offerings

Some Canada prospectors coming out of the gate with new offerings or private placements try a TSX short-form offering. “These are for companies that want to go to many hundreds of investors for $5,000 or $10,000 each,” says David Kearnes, a broker at Canaccord in Vancouver, B.C.

It is called short-form because the prospectus is much shorter than those required for other public offerings of equity in Canada. Lately, Batero Gold Corp. (TSX: V.BAT, Stock Forum), a Colombia prospector, has used it to good and some say excellent advantage.

Avalon Rare Metals (TSX: T.AVL, Stock Forum) recently announced a short-form offering. There are quite a few out there in the land of Canada-traded prospectors.

Mr. Kearnes at Canaccord says he expects a growing number of prospectors to use the short-form financings to reach out to individual shareholders. “Every company should have at least 1,000 shareholders and maybe 2,000. You bring in a fresh audience for your projects and there is liquidity,” he says. Short-form shares trade almost immediately vs. the four-month average hold for institutional and qualified-person placements of equity.

Mr. Kearnes and Canaccord are hosting an evening conference Oct. 14 at the Pan Pacific Hotel in Vancouver. The session will focus on three companies – Copper Mountain Mining Corp. (TSX: T.CUM, Stock Forum), Timmins Gold Corp. (TSX: V.TMM, Stock Forum) and United Mining Group Inc. (TSX: T.UMG, Stock Forum). Still, I am sure David Kearnes will take questions from ordinary folks about short-form offerings. More at his web site, www.davidkearnes.com.

For more coverage of Mexico, Colombia and elsewhere, please view Thom Calandra’s Stockhouse articles.

THE NOVEL: It’s complete and for your reading pleasure: PABLO BY NUMBERS. It’s about the world of natural resources.
Ticker Trax researches a select group of Planetary Prospects.

Ticker Trax™Please see tickertrax.com to learn more about this wealth service and its Planetary Prospects. For an index of free Thom Calandra articles, please click here. For an entire explanation of our strategies, research methods and disclosure procedures regarding all aspects of Ticker Trax and our Stockhouse reports, please visit our readily available Stockhouse articles. Please see this one in particular: Core Box Revealed.For the password-protected Ticker Trax library, please see: www.tickertrax.com/Login.aspx.

HOLDINGS: Thom’s holdings are listed for Stockhouse members at www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He and his family own recently minted gold and silver coins and shares of about 30 public and two private companies.

THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom was founding editor of CBS MarketWatch. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom has been covering life-sciences and natural resources since 1988.

Ticker Trax is published by Stockhouse Media Inc.Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra is a broker or an investment adviser. None of the information contained therein constitutes a recommendation by Mr. Calandra or Stockhouse that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Ticker Trax does not purport to tell or suggest the investment securities that subscribers or readers must buy or sell for themselves. Subscribers and readers of Ticker Trax are asked to conduct their own research and due diligence and obtain professional advice before making any investment decisions. Ticker Trax will not be liable for any losses or other damages caused by a reader’s reliance on information obtained in these reports. Subscribers and readers are solely responsible for their own investment decisions. Opinions expressed in Ticker Trax are based on sources believed to be reliable and are written in good faith, but no representations or warranties, expressed or implied, are made as to the accuracy or completeness of those opinions. All information contained in Ticker Traxshould be independently verified. The editor and publisher are not responsible for errors or omissions or responsible for keeping information up to date or for correcting any past information.Ticker Trax and Thom Calandra do not receive compensation from any companies that may be mentioned in Ticker Trax. Some of those companies are advertisers or clients of Stockhouse, the publisher. Xtra-Gold Resources was a preferred client of Stockhouse for investment relations, marketing and other commercial but not editorial services, which are never guaranteed. Also, Thom Calandra owns each of the Planetary Prospects and discloses any changes when it comes to purchases and sales. Companies hosting research tours sometimes pay for travel expenses. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed in Ticker Trax. PLEASE DO NOT E-MAIL OR CALL THOM CALANDRA SEEKING PERSONALIZED INVESTMENT ADVICE, WHICH HE CANNOT PROVIDE. Copyright 2010 all rights reserved.



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