Two gold juniors get the ‘McEwen bump' Rob McEwen buys shares in two Canadian juniors and investors take note, driving up their shareprices.
Author: Kip Keen
Posted: Wednesday , 03 Oct 2012
HALIFAX, NS (MINEWEB) -
For some junior gold lovers there is an ever so complex stock buying strategy. First Rob McEwen, a well known entrepreneur in the mining and mineral exploration industries, buys shares in a little known but active junior explorer. McEwen's share buying then triggers a news release or an insider report if the stake he holds is big enough to warrant a regulatory filing. News of the buying then goes public and investors, figuring that if someone out there can pick interesting early-stage gold stories surely it's McEwen, follow suit. And, as a result, of course, the respective junior's shareprice gets a nice boost.
Let's call it the McEwen bump.
It has happened twice in the past few weeks after reports McEwen bought shares in gold juniors in September. First McEwen picked up about eight percent of Manitou Gold's shares in a mid-September private placement and then he increased his stake to over 11 percent in Vantex Resources. Vantex jumped 35 percent to C$0.14 in strong trading on the news, today, much like Manitou, which jumped 25 percent on the news back in mid-September. Manitou has subsequently doubled in recent weeks to C$0.25 (at presstime Tuesday, October 2), which makes one wonder if Vantex's climb might still have some distance to go.
While I couldn't reach McEwen today to talk about the share buying - his interest in the juniors in particular and his thoughts on the McEwen bump - there are nonetheless some obvious similarities between the two juniors from which to glean some insight into what caught the attention of this titan of the junior market. Both are gold explorers with a moderate number of shares outstanding; lowish marketcap; and active drill programs on a mixture of low and high-grade gold targets in Central to Eastern Canada. For Manitou, which holds rights to about 17,000 hectares in northwestern Ontario, the focus is on the Gaffney Extension. Last year at Gaffney it hit one of its most intriguing drillholes yet, 74 metres @ 2.4 g/t gold some 200 metres below surface and beneath generally narrower and higher grade hits. Manitou's drills, not surprisingly, have since been poking at that deeper zone, between 300 and 500 metres below surface, to see if there's more by way of broad gold hits.
As for Vantex, its focus is twofold, bulk-tonnage and higher-grade gold zones at the Galloway project west of Rouyn Noranda, Quebec. For the moment it's the latter type of target getting most of Vantex's attention. Guy Morissette, Vantex's president and CEO, told me the junior's plan is to drill for extensions of the high-grade Moriss gold zone once (or so long as) it gets permits from the Quebec government. There was an especially eye-catching drillhit at Moriss back in August, with as much as 6 metres @ 59.51 g/t gold. Now the junior is eager to try and build on the high grade zone of mineralization. As well, nearby to Moriss there are two low-grade gold zones: The deeper Hendrick and the near-surface GP zones. Vantex has drilled numerous plus-100-metre long intercepts in the half- to one-gram-per-tonne range into both zones and resource-wise it made a humble beginning with its first estimate at GP in September, giving 240,000 ounces gold @ 0.41 g/t Au. The hope in respect to bulk tonnage resources is to expand, possibly between the deeper Hendrick (recent drilling: 149 metres @ 0.8 g/t Au) and then zones nearer to surface.
In all this McEwen's interest has obviously been piqued. Otherwise, he wouldn't be buying shares. It also seems fair to draw a couple additional points from McEwen's picks. Vantex and Manitou shareprices were, until news of McEwen's investments hit the wires, near year lows, lagging despite the recent surge on the junior market. So if the junior run continues, the timing could turn out to be quite savvy. And then there is location. If these picks serve as a guide, McEwen clearly likes gold in or near well established gold districts in Canada where infrastructure is good - that is there are roads and power - and permitting regimes, if a bit lengthy, are at least clearly laid out.
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