Nevada: 10x Dirt – General Metals
BATTLE MOUNTAIN, Nevada – Bob Carrington spent his 21st birthday in this town of 2,500. You know, The Owl Club restaurant and casino … known to geos the world over as the Foul Owl.
That was more than 30 years ago. At the time, the junior geologist was poking holes and surveying gold property at the old Independence Mine. Many versions later, the easy oxide of this place belongs to a tiny, over-the-counter-traded company called General Metals Corp. (OTC: GNMT, Stock Forum).
Surrounding the mine and the 280-odd acres controlled by General Metals is Newmont Mining (NYSE: NEM, Stock Forum). You can see its haulers all over the place. It’s being worked for LARGE MINING as we speak.
To use a well-worn phrase, a picture, as in this one taken from our flight over the property this week, tells a story better than a thousand words do. In this case, as I prepare for Peru and Colombia, I do not have time for 1k words in this report.
Our audience knows Mr. Carrington from Colombian Mines Corp. (TSX: V.CMJ, Stock Forum), the 300,000-hectare property holder whose minerals portfolio we are still viewing (and again will be in two weeks).
In the meantime, allow this photo of Newmont’s Phoenix Mine and surrounding area to speak the words. The Battle Mountain region is prolific when it comes to gold, copper and some silver. The photo shows what Newmont says will be the largest open-pit operation it will own in the state of Nevada as the massive workings of its property progress this decade and next.
The Battle Mountain district, as in the photo here, already has produced about four million ounces of gold. This includes properties called Fortitude, Phoenix and the Independence Mine, where young Bob Carrington cut his teeth. Fortitude is a 7.5 million-ounce Newmont reserve at 0.25 grams gold per tonne, I am told.
Excuse the rush here, as we are on deadline preparing for Antares Minerals’ (TSX: V.ANM, Stock Forum) Haquira copper tour (next week) and for a look at Peruvian holdings of Candente Copper (TSX: T.DNT, Stock Forum). After that, it is off to Colombia, again with Bob Carrington, to see a copper property and another gold property.
Mr. Carrington’s connection to General Metals, aside from decades of familiarity with the Independence Mine, is as an investor and a director. Make no mistake, General Metals is in serious need of money and attention. Yet as Bob and his chief consultant on this project, University of Nevada-Reno geology classmate Jeff Rassuchine, insist, this entire district is “under-drilled to the max,” if such a thing is possible.
Jeff has spent two years poking 128 reverse circulation drills into the ground here. I have seen the results. The plan, as they explain it, is to heap-leach the “easy” oxidized and low-grade gold dirt from this area. Newmont, of course, is here for the sulfide stuff, and has a 35-year mine life to get its rock.
General Metals, if it survives a small cash crunch and its absurdly low stock price of four cents, could have a heap-leach pad unit on a four-inch crush working the Independence soil in 18 months – for a price tag of less than $10 million.
Were that to happen, Mr. Carrington would breathe a sigh of relief, knowing that the place he began his career will see a second, or third, life. In the meantime, there are issues of naming a CEO, bringing in a mining engineer and a fresh board of directors and paying off about $40,000 of current bills. Oh, and that absurd total shares outstanding of 200 million or so – even more fully diluted it appears.
Still, a company worth less than $10 million sitting on oxidized dirt with what looks like 85 percent or higher extraction rates? No metallurgical issues? Maybe two million or more ounces of byproduct silver? More than 200 acres of surrounding ground that Jeff and Bob see as a much larger and richer gold district than even Newmont might imagine? (Gold porphyry possible at northern end of its holdings … intrusive body similar to CMJ’s Yarumalito property in Colombia.)
“This was an old Battle Mountain Gold property now controlled mostly by Newmont Mining,” Mr. Carrington tells us. “Newmont owned – right in the middle of the Phoenix Mine there – half of the old Fortitude Mine. Now for us here at General Metals, 128 holes have been drilled and every one of them has hit ore, roughly 0.6 gram gold. If this works out, it is a fully-permitted heap leach facility and we would pay Newmont for the heap leach pad space and the equipment.”
TT folks, this an outright buy for those who believe speculative gold properties with excellent geologists (and geology) will appreciate in spectacular fashion in this commodities melt-UP. And hey, that would be much like what Colombian Mines already appears to be accomplishing – at least with its stock price and land holdings.
I have no intention of purchasing shares of GNMT this time. But our audience is welcome to. My apologies for any misspelled names or unclear themes or data in this rushed report.
Visits: Going to see Antares Minerals’ (ANM) Haquira copper prospect in Peru next week. That will be followed by a visit to a Candente prospect in southern Peru. Candente Copper (DNT) is a Planetary Prospect of this service. Then, Colombia as noted above for a visit to two CMJ properties and one week of holiday, one hopes. In late April: off to Jimmy Longshore’s Kibi Gold Belt in Ghana yet again – Xtra-Gold Resources (OTC: XTGR, Stock Forum). We also have queries into Burkina Faso projects.
The Planetary Prospects
- Premium Exploration (TSX: V.PEM, Stock Forum) – Gold in Idaho and Montana. Extremely high grades. Wilf Struck is the geologist and CEO.
- Inter-Citic Minerals (TSX: T.ICI, Stock Forum) – Gold prospector and mine developer in eastern China. Big stock move ahead as China gold companies and banks seek to boost their gold output from within their own country.
- Central Fund of Canada (AMEX: CEF, Stock Forum) and (TSX: T.CEF.A, Stock Forum) – Gold and silver repository. Its premiums, being a closed end fund, are rising. Own this one as a money market proxy for real gold and silver.
- BioCryst Pharmaceuticals (NASDAQ: BCRX, Stock Forum) – Influenza and leukemia drugs. Gout, too. Biomedical appears to be back in vogue this month as an investment. The shares are performing poorly this month of March and we here at home now fully own 70,000 of them – as in shares.
- Endeavour Silver (AMEX: EXK, Stock Forum) and (TSX: T.EDR, Stock Forum) Silver in Mexico. On a property purchase tear. Brad Cooke is the CEO and is clever and trustworthy. I’ll get an update from Brad in San Francisco this coming Friday.
- Endeavour Financial (TSX: T.EDV, Stock Forum) – No relation to Endeavour Silver. This is the Canada merchant bank that is making a big bet on West Africa.
- Xtra-Gold Resources (OTO: XTGR, Stock Forum) – This is the West Africa gold prospector that might follow in the footsteps of successful Keegan Resources (TSX: T.KGN, Stock Forum). But first, it needs to show us a lot more in the way of drilling results from the Kibi Gold Belt in Ghana.
Great Basin Gold (TSX: T.GBG, Stock Forum): This is Ferdi Dippenaar’sSouth Africa and Nevada company. Please see archives for coverage of Burnstone and Hollister mines.
- Candente Copper (TSX: DNT, Stock Forum) – Joanne Freeze’s Candente has copper in Peru. A second unit is now a separate company, Candente Gold (TSX: T.CDG, Stock Forum) in Mexico and Peru. We list it because we need copper in our portfolio. Probably the cheapest thing on this list, along with Avanti Mining. Joey tells me, “The institutions are starting to get it.” Please see our Stockhouse article of this weekend for what that means. I might be able to hook up with the company during a Peru visit later this month.
- Great Panther Silver (TSX: T.GPR, Stock Forum) –Silver in Mexico. Robert Archer is the CEO. The Panther is on the prowl for assets. GPR’s rising silver grades and low stock valuation compared with other Mexico silver producers make the company a value here. Still, I am scrubbing the expense numbers in terms of silver costs of mining in its latest report. Bob Archer … and several of my trusted financial friends who have no interest in GPR … are helping me crunch the numbers.
- Avanti Mining (TSX: V.AVT, Stock Forum) - Cheap and aspiring molybdenum mine at Kitsault in British Columbia. Under pressure after a capital raise. Moly futures are trading now in London. BMO, the bank, helped Avanti’s Craig Nelsen and AJ Ali raise $17 million Canadian.
- Colombian Mines Corp. (TSX: V.CMJ, Stock Forum) –CMJ has one of the widest property companies in Colombia for such a tiny company – some 300,000 hectares. I hope to see CMJ’s Cerro de Cobre copper holding soon. In addition, across my radar screen are several other Colombia properties – not connected to CMJ, whose shares are rising robustly. These include Angus Resources (which is not public) and New Global Ventures (TSX: V.NNG, Stock Forum), whose top executive, Mark Lawson, I have met.
- We are looking at several tiny pharma and drug discovery companies.
- Ticker Trax and Stockhouse are looking for editing and writing talents who can base themselves in Toronto or Vancouver. Must be a university graduate with writing and editing savvy. It also helps to understand natural resources. Ping me please on the email – thom dot calandra at stockhouse dot com.
- I will be meeting today with CEO Adrian Hobkirk of Gold Port Resources (TSX: V.GPO, Stock Forum), the British Guyana company. Also on my plate this week are telephone calls with Columbus Silver (TSX: V.CSC, Stock Forum), a New Mexico and Nevada prospector. Robert F. Giustra is the principal of this small company.
InvestFest 2010
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(Photos by Thom Calandra. Thom owns shares of each of the 12 Planetary Prospects. 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 Planetary Prospects.)
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HOLDINGS: Thom’s holdings are listed for all 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 a number of public and two private companies. As with each of the 12 Planetary Prospects, Thom Calandra owns Colombia Mines and the other P.P.s indicated in this report.
THOM CALANDRA of Ticker Traxhelps his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch andMarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold.
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