Candente's Back-In, Great Panther Zones In: Ticker Trax Actionable

Candente/Goldcorp: ‘Back-In’

• Sandspring Resources (SSP.P) in Guyana
• Great Panther Zones In & Out
• New Orleans Phone Number: 1-800 648-8411
• Questions for Xtra-Gold? Yup …

Ticker Trax™:A Stockhouse Exclusive

Candente Resources and Candente Gold’s Joanne FreezeThursday (today) unveiled the reworking of its Goldcorp(subsidiary)property at El Oro in Mexico. I will give a snippet here, and then provide siome comments this morning from CEO Freeze, with whom I shared some thoughts.

The reworking of the option pact has been ongoing for several weeks. The Candente (TSX: T. DNT, Stock Forum) team secured new terms with Luismin S.A. de C.V., a subsidiary of Goldcorp (NYSE: GG, Stock Forum).The new spinoff company, Candente Gold now will “relinquish” Luismin's back-in right for El Oro’s Historic Mining Area, whose output over many, many decades has been at least 8 million ounces of gold and 250 million ounces of silver. Luismin still holds the right to “back-in” to a 70 percent interest in the outlying exploration area.

What does it all mean? In essence, Goldcorp wants upside, as miners and prospectors say, and Candente wants upside. Joey Freeze tells me, “Goldcorp is most interested in a brand new vein of 5 million ounces or more, but people investing want more of the upside for the high risk money. So we convinced Goldcorp we would agree to spend $1.5 million in the exploration area (of El Oro) and they can “back-in” … and that with no “back-in” in the main part, we at Candente Gold have huge upside on share value. They can make money that way and have an entry into buying the company if it all works out, if we find something really big in the historic area.”

So why was the ”back-in” structured as it was in the first place? “They were greedy and old school financing,” she said. As discussed here, the new, Mexico-oriented Candente Gold, when it starts trading, almost surely will become a Planetary Prospect for Ticker Trax.

Great Panther Resources (TSX: T.GPR, Stock Forum): Allow me to ”back-in” to Great Panther’s splendid silver and gold grades at newly drilled pockets of its Guanajuato Mine Complex. The results are just out:

I asked Bob Archer, CEO, why the investing audience was not paying more attention to the numbers, which fortify a property that stretches more than four kilometers over gorgeous rolling Guanajuato hills that once financed most of the Spanish Empire some 300 and 400 years ago. Please see results of the three zones.

After all, Mr. Archer (pictured here at Guanajuato has yet to break a Wall Street or Bay Street promise, on my watch anyway. He is now saying that Great Panther at its two Mexico properties (the other is in Durango State) will raise silver output to 3.8 million ounces per year from approximately 2 million ounces. To be sure, this increase will occur over three years. But really: some of these strikes have 400-plus grams of silver per metric ton. I was fortunate enough to see some of this rock at Guanajuato. One small piece, with free silver and gold visible to my naked eyes, is sitting on the table before me right now. (Oops, caught with the loot. Seriously, I got permission.)

Mr. Archer:“Well, on the weekend we had a recommendation from Brien Lundin of Gold Newsletter but also a damning report live on BNN by (an independent geologist), so that likely would account for some of the volume,” Mr. Archer says. “Also, yesterday (Sept. 30) was the end of the quarter and many brokers would have been selling to lock in profits. (Great Panther’s shares have been rising steadily but with some volatility).They probably have to wait a few days before they can buy back in.”

Ticker Trax: “Bob, were there any new methods of drilling or cut and filling, and so on, employed in this drilling program? New technologies? A look at past records from all of the centuries of mining that have occurred there?”

Bob: “No, this is all pretty basic from a mining point of view. We are simply getting a better understanding of the geology.”

Me: “Also, is there anything like this extension of zone and what seem like rich grades in the region that is comparable -- a kind of yardstick?”

Him: “Our mines are the yardstick for the district. (Endeavour Silver (TSX: T.EDR, Stock Forum) also has potent holdings at Guanajuato.) As you have seen, there are pockets of bonanza grade, the 10-kilo silver, 60-gram gold stuff, that act as “sweeteners,” but these are just mixed in with everything else as it would be too difficult to separate them.”

Me Again: “Is there anything different about the ore from what you already have seen at the entire Guanajuato complex? Or same-same in terms of recovery rates and so on?”

Him Again -- Mr. Bob Archer: “The gold grades in Santa Margarita are unusually high over that length and width and I don’t think that electrum is all that common but Guanajuato has long been known for a wide variety of, often museum quality, silver-gold minerals. (Electrum is gold-silver combined.) These higher grades will likely have a positive effect on recoveries and, once we upgrade the plant, the latter should improve again.”

Ticker Trax: “Could output from these zones lower costs to a record low for any primary silver producer? In the galaxy?

Bob: “They will likely lower costs per ounce but I would not go as far as to say they would be at record levels. The difficulty with the way the silver industry reports cash costs (i.e., cost per oz of silver net of by-product credits) is that it is heavily biased by the by-product credits, in this case gold. So if our silver grade remained the same but the gold grade doubled, it would have the effect of significantly driving down our cost per ounce. If a company has greater revenue from by-products than from silver (and therefore not a primary silver producer), their cost per ounce would be negative (e.g., Fortuna Silver (TSX: V.FVI, Stock Forum)).

Planetary Prospects

Nearly all of our (now 9) Planetary Prospects are in green. Endeavour Financial (TSX: T.EDV, Stock Forum) appears to be under accumulation, in part because of its crystal-clear intentions for Etruscan Resources (TSX: T.EET, Stock Forum) in Burkina Faso.

I own them all. I expect to own them all until I see fundamental events that disprove my on-the-scene reporting -- and this includes BioCryst Pharmaceuticals (NASDAQ: BCRX, Stock Forum), Great Panther Resources, moly wonder Avanti Mining (TSX: V.AVT, Stock Forum), Great Basin Gold (TSX: T.GBG, Stock Forum), whose Nevada tour I recently completed, Endeavour Silver, Burkina Faso-leaning Endeavour Financial and the rest.

Xtra-Gold Resources Corp. (OTO: XTGR, Stock Forum) is Planetary Prospect No. 9 for subscribers. President James Longshore and geologist Yves Clement this week provided answers to questions I posed to the extremely high-risk project Xtra-Gold is attempting in Ghana. I will present them as soon as I recover from the terrific Great Panther zone results.

(Photos by Thom Calandra.)

Sandspring Resources’ Toroparu in the Republic of (English-speaking) Guyana has caught my fancy.The correct ticker, when it begins trading at the end of October, is SSP.P. Sandspring is producing about 5,000 ounces of gold a year right now at the 100 percent-owned concession, all of it alluvial (basically panning for gold). A slew of new diamond-drill holes are showing a resource of 2.3 million ounces of gold and 260 million pounds of copper (Initial NI 43-101 Resource Estimate as defined by Canada securities rules).

The property itself is called the Toroparu Gold-Copper Prospect, and it is in the Upper Puruni River Area, Guyana. The nation is South America’s only English-speaking one. Guyana roughly translated means “land of many waters.” (Here is the official government web site.)

I already have met the appointed CEO, Abraham Drost, a lanky fellow and a geologist who spearheaded Sabina Silver several years ago.Mr. Drost and his team hope to turn a 60-man camp and gravity mill, with pit and tailings pond in place, into a major resource. I hope to visit. Early drilling on a brisk and heady step-out program has outlined what appears to be copper and gold beneath saprolite, which is a bit like Ghana structures, I am told by geologist and Endeavour Silver (EDR and EXK) CEO Bradford Cooke, who is familiar with the project and the region.

“I reviewed the presentation of Sandspring and they certainly have a robust intrusive/structural gold system on their hands,” Mr. Cooke said, taking time to answer my questions. “Since heap leaching is not viable due to the heavy rainfall, they will want to focus on higher grade +1.5 gpt (gram per metric ton) open pit ores rather than lower grade -1 gpt ores. If they can outline +2 million ounces doing that, then the thing should fly.”

Great Basin Gold’s tour of the Hollister and Esmeralda properties in Nevada four weeks ago is still in my notebook. Great Basin , by the way, has a stake in a poly-metallic Russia property it received in its 2008 purchase of Rusaf Gold of Vancouver. With any luck, CEO Ferdi Dippenaar will dispatch that property so that the company can focus most of its attention of meeting internal goals for producing gold at the Nevada properties. I think there is a chance fourth-quarter gold output at Hollister, via its Esmeralda mill and one or two other contract mills will exceed even internal targets. This would be thanks to higher ore grades for dirt stockpiled at both Hollister and Esmeralda.

Great Basin is trading at an approximate 38 percent discount to its mid-sized looming gold producing peers … only because it has one foot at a second mine in South Africa and is tangled up with that darn carry-trade rand currency. The company is probably similar to what I call the lack of respect that Eldorado Gold (TSX: T.ELD, Stock Forum) was getting some four years ago. Look at Eldorado now.

The New Orleans Investment Conference: Not to attend is unthinkable – if you can spare the time and the fees. Click on here for a discount: The New Orleans Investment Conference. Or better, call this number and mention my name, which is “The Idiot in Toronto The Other Day Who Forecast $4,000 Gold & $600 Silver.” Or just say Thom Calandra. The telephone number is: 1-800-648-8411.

In New Orleans, I’ll be presenting a no-holds barred Q&A workshop, participating in a panel with Rick Rule and others and discussing “Our Own District 9: Mexico, Ghana, Silver & Moly.” That’s next Friday I believe, a week from tomorrow. Brien Lundin of The Gold Newsletter produces the conference, whichruns Oct. 8-11. This year will bring an excellent crop of counter-clockwise and contrary thinkers in the areas of mining, emerging markets, commodities and life sciences, including Great Panther’s Robert Archer, Avalon Rare Metals’ Don Bubar and others. Mr. Lundin has just added political maverick Ron Paul. If you are interested in a discounted rate, please visit this link for registration.

That is all for now.

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