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These junior miners deserve some market-cap respect

Thom Calandra Thom Calandra,
0 Comments| November 5, 2010

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Gold/silver/copper/uranium – they’re all roaring. Yet a few of the lesser known prospectors are still at a whisper.

You and I know the winners. Among the solid prospectors and mine developers (three to five years into their timelines): Ivanhoe Mines (TSX: T.IVN, Stock Forum), Osisko Mining (TSX: T.OSK, Stock Forum), Keegan Resources (TSX: T.KGN, Stock Forum), Antares Minerals (TSX: T.ANM, Stock Forum) … it is a long list.

Our Stockhouse audience? We want the geologists, miners (and even sometimes, gasp, the promoters – but only the whisperers) who deserve market-cap respect but are not getting it. The prospectors and developers of natural resources that have been working their concessions for years with little in the way of investor respect.

Click to enlargeTo wit: African Gold Group (TSX: V.AGG, Stock Forum) in Mali and Ghana wields dig-spin over a dozen gold properties. Michael Nikiforuk in Canada is the CEO, and his team of geologists and engineers has been working on this second-stage prospector for years. This is the kind of company – and yes, I hope to see the properties myself – that could become another Keegan Resources (TSX: T.KGN, Stock Forum) and (AMEX: KGN, Stock Forum), which I have seen.

AGG has been reporting steady and sizeable intercepts in 34 of 35 reverse-circulation drill holes at Kobada. (You canjudge for yourself.) Yet every few weeks, in yet another round of results, the stock goes nowhere. Even Ingrid Hibbard’s once-tiny (and entirely worthy) Pelangio Exploration (TSX: T.PX, Stock Forum) in Ghana at $150 million of market cap is faring better on the paper part of the equation.

“Compare these results with the results of Orezone (TSX: T.ORE, Stock Forum) and others in West Africa. We are not intending to take anything away from them,” Mr. Nikiforuk tells me this week. “Kobada will one day be a producing gold mine – and a serious money maker at that.” Michael N. can only wish for a stock chart that looks like Pelangio’s. Or Orezone’s (see here).

Ticker Trax subscribers know we are in love with Ghana, a three million-ounce-plus per year producer … and the rest of West Africa. The area’s gold diggers whom we have visited or researched/discussed during the past two years in the service include Keegan, Perseus Mining (TSX: T.PRU, Stock Forum), Etruscan Resources and Xtra-Gold Resources (OTC:BB: XTGR, Stock Forum). This last is the only one stock in this report that I own.

Like the step-out drilling that is collaring solidly mineralized holes at Kobada, AGG’s market cap, currently $45 million, likely will step out soon. When that happens, the Canada-traded shares almost surely will double overnight to reflect the assays. Our colleague Bob Moriarty at has been over there, having beaten me to the hunch. He is a believer.

SKIN IN THE GAME: Those who track my work know I am not a geologist. I am a writer, a reporter and an observer with more than 20 years of developing contacts with geologists, executives, engineers and – OK I admit it – whispering promoters. Of all of these, the most valuable ones are the geos. Once you get past the language barrier.

One of the 10 or so geologists who get my attention and respect with their diligence, their success and their historical and geophysical perspective is Arizona’s Peter Megaw. Dr. Megaw gets credit for vast silver (and gold) resources in Mexico. These include Mag Silver's Juanicipio-Fresnillo, Zacatecas, Platosa, Durango … and so on. He is keen on epithermal vein deposits, and I have been on site with him at one silver-gold property, but not the one mentioned here.

That would be Minaurum Resources (TSX: V.MGG, Stock Forum). “This is a bunch of Guerrero Gold Belt skarn properties that Dave Jones, the finder of Los Filos (GG), and I put together over the past 10 years ... and we are finally rolling it out. All of the properties are district-scale play makers if they come in.”

Mr. Jones and Dr. Megaw studied together and have worked together for 30 years. The flagship for Minaurum is called Aurena Gold Project in Mexico, classified as a pro-grade skarn deposit; thus, low tonnage and high grade like Hedley in Canada and Fortitude in Nevada.

Minaurum President and co-founder Darrell Rader tells me his management team includes what he calls “proven mine builders.” Richard Brissenden is from Excellon Resources and I was with IMPACT Silver. “We have three proven mine finders: Peter Megaw (MAG Silver (T.MAG), West Timmins and Excellon Resources (TSX: T.EXN, Stock Forum); David Jones (Goldcorp and that nine-million-ounce Los Filos Mine; and Gerry Rayner (eight-million-ounce Ok Tedi Mine in Papua, New Guinea). Our chairman, Michael Williams, and our CFO, Darryl Cardey, were founders of Underworld Resources, which was taken over by Kinross (TSX: T.K, Stock Forum).”

Mr. Rader says institutional ownership of the shares is about 60 percent. Property vendors hold about 20 percent of the company. Management about 10 percent.

Adds Dr. Megaw, whose company IMDEX (and associated Minera Cascabel) optioned the properties into MGG, “We have significant skin in the game. We started drilling in July on the Adelita property in southern Sonora, largely because it was drill ready and permits were in hand. Adelita is a high-grade gold-silver-copper-zinc skarn hosted in limestone above what we now believe is a porphyry copper center. We put in eight holes, several of which hit very high-grade copper mineralization with appreciable gold over decent thicknesses.”

THE LODE: We want to congratulate founder John Winfield for delivering on the promise of his Nevada equity, Comstock Mining in Nevada (OTC:BB: LODE, Stock Forum). “I think you’ll see our land package is so large and our historical data so deep, that it is not proving the silver and gold is there, it is what the quantities are,” Mr. Winfield told me. (I do not own shares of LODE but do know many subscribers who did purchase two months ago at $1.30 or so. The USA-traded shares touched $4 this week.)

San Francisco Hard Assets in November: This autumn I will be attending one show: San Francisco in November. If you’d like to join our Stockhouse and Ticker Trax audience at the November show, please see: San Francisco Hard Assets.

Ticker Trax™Please see to learn more about the subscriber service. For an index of free Thom Calandra articles, please click here. For an explanation of our strategies, research methods and disclosure procedures regarding of Ticker Trax and our Stockhouse reports, please visit our readily available Stockhouse articles at Please see: Stockhouse articles – Core Box Revealed. Companies whose site tours I attend for research purposes pay part or all of my airfare and hotel. For the password-protected Ticker Traxlibrary, please see:

HOLDINGS: Thom’s holdings are listed for Stockhouse members at under the “portfolio setting” for user TCALANDRA. It is public and free to view. He owns shares of about 30 companies.

THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom was founding editor of MarketWatch, CBS MarketWatch and FT MarketWatch. He was 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 Publishing Ltd. Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra nor Danny Deadlock is a broker or an investment advisor. None of the information contained therein constitutes a recommendation by Mr. Calandra or Mr. Deadlock 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 subscribers or readers should buy or sell for themselves. Subscribers and readers of Ticker Trax should conduct their own research and due diligence and obtain professional advice before making any investment decisions. Ticker Trax will not be liable for any loss or damage caused by a reader’s reliance on information obtained in the 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 representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in Ticker Trax should 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 and Danny Deadlock do not receive 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 at one time a preferred client of Stockhouse for investment relations, marketing and other commercial but not editorial services, which are never guaranteed. 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 EMAIL SEEKING PERSONALIZED INVESTMENT ADVICE. Copyright 2010 all rights reserved.

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