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.
To 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 321gold.com 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.
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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.
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