Shots From Ghana
- Quick Update: Accra Booming … Perseus veteran on Ghana
KWABENG CAMP, Ghana – Xtra-Gold’s mining camp is now at 50-strong. When excavating and drilling resume in early June, that number will more than double, CEO James Longshore tells me.
This is the briefest of updates on Xtra-Gold Resources (OTO: XTGR, Stock Forum), a Planetary Prospect of Ticker Trax and our only Ghana and West Africa candidate for prospecting success.
In the meantime, a new excavator purchased for $250,000 has started road construction and pads for an upcoming Boart Longyear drill program across the Kibi Gold Trend that will see a minimum 5,000 meters and 50 diamond-drill holes.
“That will be the minimum budgeted,” Mr. Longshore tells me. “It could double based on additional capital from possible alluvial deals and of course, investors.” Xtra-Gold has $3 million in the bank and the planned program will run about $750,000.
The alluvial program, as we stand here at the camp on Wednesday, is unfolding. If consummated this week or next, Xtra-Gold’s alluvial operation will see 1,000 contract workers from an illegal operation shut down by the police.
The social and fundamental angles of alluvial are significant. First, Xtra-Gold sees approximately 1,000 ounces a month of production along the Birim River that run through its concessions here. A 10 percent royalty of that harvested gold, plus an administration fee of about three percent, would go to the company.
“It is more of a good-will project that provides jobs for formerly illegal miners and guides them toward adhering to environmental standards,” 43-year-old Mr. Longshore of Nassau, Bahamas, says.
The galamsay miners, whom we have seen work the river bed, are efficient at what they do yet often sidestep the back-filling of pits when they are surface-mining. Mr. Longshore spends most of his time these days in Ghana.
Xtra-Gold’s alluvial resource, in historic terms, benefits from the Birim River headwater on the (Nevada-domiciled) company’s Kibi property. Some estimates put the alluvial resource – the easy pickings sifted from panning and other water sluicing – at 200,000 ounces – the largest in the country on concessions controlled by one company. “That we know of anyway,” says Mr. Longshore.
For Xtra-Gold, alluvial operations are also political good will between the tiny company and the Ghana Minerals Commission. The government panel sees such an operation as a legal way of converting short-term prospecting leases to much longer-term mining leases – government-sanctioned leases that keep all of Xtra-Gold’s properties intact.
Xtra-Gold has three mining licenses and hopes to convert two more. In my eyes, and in the eyes of observers, this is money in the bank of mineral and property rights.
“I don’t know of anyone that far along here on conversions of leases,” says Kevin Thomson, exploration manager of Perseus Mining Ltd. (TSX: T.PRU, Stock Forum) In Ghana. Mr. Thomson took a resource of 500,000 ounces at several sites, including Ayanfuri, to more than six million ounces in three years.
Mr. Thomson tells us that the EPA in Ghana, the environmental arm, takes great solace in seeing the standardizing of alluvial mining practices.
Perseus and its $700 million Canadian market capitalization (along with other success stories Red Back Mining (TSX: T.RBI, Stock Forum) and Keegan Resources (AMEX: KGN, Stock Forum) and (TSX: T.KGN, Stock Forum) are why Xtra-Gold easily could quintuple its $36 million market worth in the view of Ticker Trax. (As with all Planetary Prospects, we here at home own shares of Xtra-Gold – 125,000 shares and rising.)
“There is really not a lot here (in Ghana) that is being discovered in the way of gold,” says Mr. Thomson, who has been in the nation of 24 million people since 1996. (Other gigs for Mr. Thomson – Newmont Mining (NYSE: NEM, Stock Forum) and Battle Mountain Gold.)
Mr. Thomson visited the Kwabeng-area concessions of Xtra-Gold in December. “Let’s face it, the 10-baggers are mostly gone in Ghana. This and maybe one more are what we have.”
Mr. Thomson in our interview earlier this week in Accra is, of course, confident that Perseus will continue to expand its resource and attract fresh investors amid a rising market cap. On the cheap front, he mentioned PMI Gold (TSX: V.PMV, Stock Forum), a $40-million company active in Ghana.
As for Xtra-Gold, we head out later today, Thursday and Friday to see once again the five concessions across the Kibi Gold Trend. Ticker Trax is steadfast in its hopes that the over-the-counter shares some day soon will qualify for a stock listing on an equity exchange regarded as a proper home for mining companies.
In the meantime, Xtra-Gold’s team is actively pursuing its 43-101 compliant report on all of its Ghana activities. The report likely will see light of day in May. (Please see photo taken today of Mr. Longhsore at the entrance to the Kwabeng concessions.)
We here at Ticker Trax see the shares rising sharply in coming weeks and months as appetite increases for Ghana gold prospectors within one year or less of showing a resource of three million or more ounces. Once again, we point to Keegan, Red Back and Perseus.
I just got the latest from new Xtra-Gold consultant Robert Casaceli, who spent three days at the Kibi for Xtra-Gold. More to come. Please see our latest report: Ghana Gold.
Bell tolls: As for our new Planetary Prospect, Bellhaven Copper & Gold (TSX: V.BHV, Stock Forum), we continue to track the movements of the Panama and Colombia prospector. Bellhaven and CEO Julio Benedetti, well known in Panama, are on track to sample a high-sulphidation epithermal deposit in Panama. What’s more, the company still actively pursues properties in Colombia. Fund manager and geologist Paul Zweng is on site right now in Panama, scanning data and reports and aligning them with points at a Panama site.
We here at home now own more than 1.4 million shares of Bellhaven at a price above where it is trading today in Canada. I will continue to purchase shares at or about this price level. Please see our Ticker Trax and Stockhouse coverage of Bellhaven Copper & Gold.
The Planetary Prospects
There are now 13 of them.
- Premium Exploration (TSX: V.PEM, Stock Forum) –Gold in Idaho and Montana. Extremely high grades. California Petsite goes for kilometers and kilometers. Few geologists plot better drill holes than Wilf Struck, CEO. I am, however, concerned about the latest and horribly dilutive private placement of equity unveiled last week, Del Steiner, chairman, tells me. “Dilutive yes. But we have enough gold in the ground and will add more with this program to tip the scale from no to yes and get us more into a value market from the pump and dumpers. The Australians (a China-oriented hedge fund in Sydney) have their whole position (from a prior equity placement) and will take more here if necessary. Comparables treat us fairly in the middle of similar companies here. The difference is we are only drilling on four percent of our whole system. At some point we will break out.” Del Steiner is trying to sell a silver and possible platinum property the company owns in Mexico, near Hermosillo.
- 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 – metal that might be delivered to investors if they ever want to cash in their stakes.
- BioCryst Pharmaceuticals (NASDAQ: BCRX, Stock Forum) –Influenza and leukemia drugs. Gout, too. Biomedical appears to be back in vogue this month as an investment.
- 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. It is cheap by any metric – even after the shares’ tripling in value these past 14 months. I expect Endeavour Silver to purchase a publicly-traded silver company this year.
- Endeavour Financial (TSX: T.EDV, Stock Forum) – No relation to Endeavour Silver. This is Neil Woodyer’s Canada merchant bank that is making a big bet on West Africa. The firm just increased its stake in Burkina Faso prospector and producer Crew Gold (TSX: T.CRU, Stock Forum) to 43 percent. Endeavour appears prepared to battle for control or ownership of Norway and Canada-traded Crew amid a Russia steelmaker’s accelerated bids for a greater stake and a new board.
- Xtra-Gold Resources (OTO: XTGR, Stock Forum) –This is the West Africa gold prospector that might follow in the footsteps of successful Keegan Resources (KGN). But first, it needs to show us a lot more in the way of drilling results from the Kibi Gold Belt in Ghana. I am expected on site in late April – for a second visit.
- Great Basin Gold (TSX: T.GBG, Stock Forum): This is Ferdi Dippenaar’s South 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 -- Cañariaco. The seven billion-pound copper project is starting to get the attention of manufacturers and bankers. Yet Candente Copper’s shares sell for a value of only a penny a pound for its in-situ copper. Candente Copper is among the cheapest things (based on ore in the ground) on this list, along with Avanti Mining. The Candente companies’ properties in Peru also include poly-metallic prospects that might some day package into a third, separately-traded company.
- Candente Gold (TSX: T.CDG, Stock Forum) - This separate company’s shares were distributed to predecessor Candente Resources’ shareholders four months ago. CDG is our No. 13 Planetary Prospect as of today. We issued a full report on Candente Gold’s Peru prospects two weeks ago. I hope to visit CDG’s El Oro in Mexico in early May.
- 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.
- Avanti Mining (TSX: V.AVT, Stock Forum) - Cheap and aspiring molybdenum mine at Kitsault in British Columbia. Avanti’s Craig Nelsen and AJ Ali raised $17 million Canadian for the company. It is the cheapest proposition on this list. Few in the world of specialty metals will give this company respect until Avanti shows it can line up financing and possibly off-take agreements for the mine’s easily reached moly. (Moly is an important additive in armored tanks – the kind that are used in wars. I don’t want war. I do want Avanti to become the $300 million company its metrics merit.)
- Colombian Mines Corp. (TSX: V.CMJ, Stock Forum) –CMJ has one of the widest property holdings in Colombia for such a tiny company: some 300,000 hectares. Bob and Gloria Carrington and Nate Tewalt’s company is on fire right now in terms of stock price performance. I am seeing the company’s Cerro de Cobre copper project some three hours’ drive north of Bogota today (Monday). CMJ’s drilling of Yarumalito in the department of Antioquia is on schedule. Holes number six, seven and eight are completed and await assays from an SGS laboratory in Peru, Mr. Carrington tells me. We also might see a joint venture in coming weeks.
We here at Ticker Trax cannot and will not address queries about any company or prospect/theme that is written as part of Ticker Trax or our Stockhouse reports but is not a Planetary Prospect. We stand firmly behind our Planetary Prospects and back them with our own money here at home. Unless something in the picture blurs. As for reporting on other companies, the ideas are there for all to view and consider. Just do not expect that Ticker Trax will support these subjects with research, on-site visits and so on. Feel free to contact these companies, be they Nevada prospectors, Canada miners or Peru and South Africa companies.
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(All photos by Thom Calandra. Thom and his family own shares of each of the 13 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 Planetary Prospects at present … with the exception of Central Fund of Canada, which he regards as a gold-silver money market fund. Subscribers are informed well in advance of any shift in research regarding Planetary Prospects.)
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HOLDINGS: Thom’s holdings are listed for 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 about 22 public and two private companies. As with each of the Planetary Prospects, Thom Calandra owns Colombian Mines, Xtra-Gold Resources and each of the other Planetary Prospects researched in this report.
THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded CBS MarketWatch and MarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold in 1999 and in 2000. He has been covering life-sciences and natural resources since 1988.
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