Stock Bonkers: PEM, GPR, GBG, CMJ, AVT & ICI
- Plus: BioCryst’s Overseas Links
- Bonus Pick at Sunday Vancouver Seminar
- Monster Seen in Idaho (Silliness)
- That Zancudo thing
Monday, January 11, 2010
By Thom Calandra -- TickerTrax.com
MIAMI – Wish I could spend every California winter in sunny Colombia.Maybe I shall.
On Monday (today), shares of Colombian gold operator Medoro Resources (TSX: V.MRS, Stock Forum) continued to outpace most of its Marmato-Frontino area neighbors in the stock market.
I own Medoro Resources and have (via merger with Colombian Gold Fields) since first seeing EL Marmato in 2008. John Hick, CEO in Toronto, tells me today that he and his Medellin-based equipo in Antioquia and Caldas (as well as Bogota and Vancouver) are on track to consummate the purchase of what I call Baja Marmato, the lower half of this gold-dusted yet bruised mountain not three hours from Medellin.
El Marmato – Medoro controls the upper half of the mountain– faces social and environmental challenges against what might become one of the two most potent gold properties in Colombia. John Hick tells me negotiations for the lower, or baja Marmato, continue with mine-mill-property owner Mineros Nacionales SA.
Such a purchase, already having a letter of intent from October 2009, likely will come to about $35 million in exchange for about 25,000 gold ounces per year. Yet as Medoro’s NYU-trained Vicente Mendoza, VP of Exploration and a Venezuela ex-pat, tells me: “There is much more on these three levels than anyone can imagine.”
In addition, Vicente and business development chief J. M. Pelaez, along with CEO and lawyer Mr. Hick in Toronto and politically well connected Serafino Iacono in Bogota, are forging a governmental pact to purchase all of Colombia’s historic Frontino Mine in Segovia. If successful, the Frontino purchase in the Department of Antioquia will help to replenish the coffers of the mine’s bankrupt pension trust, Mr. Iacono tells me today.
The Frontino Mine’s legacy travels back to the mid-1800s and perhaps longer. At its peak, before theft, corruption and corroded mining technology pared production to 25,000 ounces of gold per year (if that much at present), Frontino’s thick and thin veins on several mining levels produced hundreds of thousands of ounces of gold in good years. Historic production: anywhere between 2.5 million and four million ounces, depending on the documents you’re reading.
Ticker Trax readers will know that I decline to name Medoro Resources a Planetary Prospect of this service. The company’s shares are expensive, and my ownership and continued purchases of Medoro stock leave me at risk of “talking my own book.” Yet the well-capitalized company, thanks to a Vancouver merchant bank and other sources, will come to represent much of the promise of the recovering nation of Colombia.
Attached to the Frontino negotiations with government appointed trustees of the mine are the livelihoods of several thousand Segovia-area miners, with their attendant labor unions and cooperatives. A well-timed purchase of the mine will provide two generations of miners with retirement money, says a consultant to the discussions, Dr. Augusto Lopez, in a Medellin visit last week.
Dr. Lopez reiterated to me this week that the negotiations are tricky and could break down at any time. He and others also put me in touch with trustee-appointed Frontino negotiators who say primary discussions right now among all Frontino parties are focused entirely on Medoro Resources. (Please read on-record articlefrom the desk ofThom CalandraviaStockhouse.)
Also, at stage right in the Theatre of Frontino is the May presidential election. Popular President Alvaro Uribe, were he to decide to seek a third and at-present unconstitutional term, or anoint a successor, almost surely will need to salve the money wounds of Frontino.
In addition, for high-level politicians, the legacy of hundreds, if not thousands, of wildcat Colombian miners who scrape rock at El Marmato is also part of the political mix. “The illegal mining in Colombia, like in many countries, is part of the fabric of the nation,” Dr. Mendoza of Medoro tells me. “Their rights, whether legal or not, are important to all of us – the miners, the lawmakers, the villages, the unions.”
Medoro and its equipo are harnessing the oilfield success of Pacific Rubiales (TSX: T.PRE, Stock Forum), a vast market-cap miracle in this oil-rich nation. Medoro’s bankers and strategists, including Mr. Iacono and others in Bogota, Cartagena, Medellin and Vancouver, are front and center in Pacific Rubiales’ oil retrieval and output (headed to 200,000 barrels a day by late 2010).
For warrant fans, Medoro has, tells me longtime (and former TCR subscriber) Bob Havlik in Toronto, fresh warrants that sprouted from the recent purchase of Colombia Gold Fields. The warrants are selling for about 15 cents Canadian in the Toronto market. Conditions are a $1.25 strike price by November 3, 2011.
Please see our continuing coverage of Medoro y Marmato … and Frontino … and Marmato neighbor Echandia … and one day, I believe, if Medoro continues its portfolio power-up, Yuramalito (CMJ) and other Colombian gold concessions of great (yet thus far unproven) potential: Canadian junior poised on Frontino.
In addition, I will be tracking the progress of Titiribi, the Georges Juilland gold project that stands a very good chance of becoming this year’s most successful Colombia IPO. Titiribi, some two hours or less outside Medellin, depending on speed, has been in the Juilland family’s operating hands for at least 15 years. Mr. Juilland, something of a legend in Latin America mining circles (for instance, his Goldplata-related holdings include promising copper and silver country not far from Fortuna Silver’sFVI Caylloma Mine in Peru). (Please see photo – in mirror – of a Zancudo Mines certificate hanging on Georges’ wall. Zancudo is what Titiribi went by in the old days and has almost as much history as Frontino.)
Outpacing their peers Monday: Ticker TraxPlanetary Prospects are outpacing their peers as we transmit this edition.
- Premium Exploration (TSX: V.PEM, Stock Forum) is benefiting from vibrant drill results at its Friday Petsite concessions in Idaho. The company is preparing an online marketing program, a representative tells me Monday. In addition, buyers were spotted in Florida Monday morning. On Stockhouse, the service that distributes Ticker Trax, we came across this curious and almost surely entirely silly missive regarding CEO geologist Wilf Struck and the Sasquatch: See Silly Missive. Mr. Struck left a note attached to his snowmobile saying he hopes to be released in time to attend this Sunday’s Cambridge House Natural Resources Conference in Vancouver and as well, Round-Up, the Cordilleran that is, at the Westin Bayfront. (Please see photo of Silly Creature.)
Inter-Citic Minerals (TSX: T.ICI, Stock Forum): I am holding onto a conversation that Inter-Citic CEO Jim Moore and I recently concluded. Jim and his team are at Dachang, the gold project in China. Jim was referring, in the following comments, to opinions he came across recently about his small yet advancing company, which is active at 5,000 meters altitude in eastern China. To wit, he says: “The projected IRR of our project is easily in the upper quartile of undeveloped gold projects globally. The projected capex to build the mine at Dachang is easily in the lower quartile of any project in the market. The projected payback period for our project using USD$750 gold is just two years.” Finally, Mr. Moore compares his Inter-Citic with O(or is it to) Eldorado Gold. Thus, “Who else operates a gold project near the Qinghai plateau? You got it, Eldorado. I have put together a little table for you.” Subscribers, if you would like the table, please shout and I shall transmit it.- BioCryst Pharmaceuticals (NASDAQ: BCRX, Stock Forum) –This drug discovery company’s compounds for leukemia, gout, psoriasis, influenza (peramivir) and perhaps cardiac arrest are worth every penny of this now-$8 security (down from $13 two months ago). A Japan approval of peramivir is likely. The company just named new European partners for spreading the word about peramivir.
- Endeavour Silver (AMEX: EXK, Stock Forum) and (TSX: T.EDR, Stock Forum) – This one has more than tripled since being named a PP of Ticker Trax some 10 months ago. Silver in Mexico. What can I say. I am holding it as we look for new ground the company intends to break in Mexico … that is, if Brad Cooke’s company does not get a takeover offer from Pan American Silver (PAAS) or some other silver potenza.
- X-tra Gold Resources (OTO: XTGR, Stock Forum) – A Canada listing might be in works for Ghana prospector. The shares are stuck in neutral at a buck..
- Great Basin Gold (TSX: T.GBG, Stock Forum) - This is Ferdi Dippenaar’sSouth Africa and Nevada company. GBG shares were one of two Planetary Prospect laggards in 2009 but are starting to achieve three-quarters of peer-value based on net asset value for expected gold output in the year 2010 (400,000 ounces?) I will see the company’s Burnstone Mine in South Africa in late January.
- Candente Copper (TSX: T.DNT, Stock Forum) – Joanne Freeze’s Candente has entirely cleared the $10 million mark on its raise for Candente Gold (CDG) – the Mexico and Peruvian gold spinoff. We’ll see Joey and her team this coming weekend.
- Great Panther Silver (TSX: T.GPR, Stock Forum)– This stock is officially out of control – as the shares attempt to reflect
their pent-up value from three years of prospecting and growing output in Mexico. GPR recently reported a 34 percent increase in quarterly silver production to 597,057 silver equivalent ounces and a 104 percent increase revenues to $8.9 million. I own a lot of it. So we all are glad to read today of exceedingly decent output numbers. Output from 2009 was 2,202,456 silver equivalent ounces (“Ag eq oz”), a 22 percent increase over 2008 and 6 percent greater than the internal targets of CEO Bob Archer and his team. Total metal production for the year includes 1,456,830 ounces silver, 7,151 ounces gold, 871 tonnes lead and 1,057 tonnes zinc, the company said. A tonne in Canadian English is the same as a metric ton in American English.
- Avanti Mining (TSX: V.AVT, Stock Forum) – Cheap molybdenum mine at Kitsault. Compelling to the max. I have seen the B.C. property. CEO Craig Nelsen and CFO AJ Ali have my allegiance on this one, complicated as the share “structure’’ is. This thing will be producing moly of good to excellent grades within 18 months. Plus, moly futures start trading in London in February. I expect the shares to approach 50 cents from their current 29 cents Canadian in the next three weeks..
- Colombian Mines Corp.(TSX: V.CMJ, Stock Forum) –Nate Teal – the CEO -- and the Carringtons Robert y Gloria have their heads together on --assembling a swelling portfolio of gold and copper properties across the gnarly and gorgeous landscape of Colombia gold/copper/coal prospects. The stock has a long way to go – higher that is. Do not expect a private placement until the shares surpass $1.40 Canadian. Robert Carrington tells me his four drill targets at Yuramalito near Marmato are set for their next step – drilling, that is – in the next four weeks. CMJ also is sitting on rock-chip sampling from gold and copper prospect El Dovio. The smack-down on those SGS Laboratories (Lima office)-verified results could come any day now.
(CMJ is a Planetary Prospect of our subscriber service. I currently am purchasing shares well above the naming price of 60 cents Canadian. )
Questions about our 12 Planetary Prospects? Feel free to call or slog me: thom.calandra at stockhouse.com.
(All photos by Thom Calandra. Thom owns shares of each of the 12 Planetary Prospects. He also owns Medoro Resources. Thom’s personal holdings are available for all to see on Stockhouse, the Canada publishing company. He has no intention of selling any of the 12 Planetary Prospects at present … and if he were to, subscribers would be informed well in advance of any shift in research regarding those Prospects. Ditto for Medoro.)
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