Subject:
RSA Update IPM
Date:
Mon, 17 Nov 1997 10:02:44
From:
Ron Struthers <resource@sentex.net>
To:
resource@granite.sentex.net
RSA Update IPM Volume 3 # 10.10 Nov 17 1997
P.O. Box 335, Owen Sound, Ontario, Canada N4K 5P5 519-372-8855
resource@sentex.net Yearly subscription $149 cdn/year $119 US
Web Site "http://www.sentex.net/~resource"
Int Precious Metals IPMCF on Nasdaq
I don't know how IPM stock will trade today and nobody really knows for
sure until the day is over. From the mood of investors, my feeling is it will
open up down.
One thing I do know is there is a lot of confused investors who will
likely sell their stock this morning. The shorts will use this to their
advantage to try in one last desperate attempt to alleviate themselves from
their situation. Will the calmer and more astute institutions buy a lot of
stock? Nobody knows for sure.
If you are one of these confused investors and I certainly can understand
why, it is my opinion you are making a mistake selling and you should
consider a few rational things about this situation. It is a good thing the
news came out on Friday as the weekend was certainly needed to digest and
analyze this
I believe the news release on Friday was very significant. It does not
tell us how much gold is at BRX or how much platinum. We can not draw
conclusions of a huge 50 million oz deposit of precious metals. It is my
opinion that only one plain and simple conclusion can be drawn from Fridays
news release and that is:
"What IPM has been telling us about the BRX property is true"
That is basically there is potentially economic grades of gold and
platinum group metals and lots of them.
This is all really IPM has said and produced evidence of numerous tests
with various reported results and grades. They have never hyped the stock
that there is a vast amount of tonnage of 1 opt precious metals but have
presented honestly every test and result of their work.
Please read on and let me explain about my conclusion and why I remain so
bullish on IPM.
Fridays news release was a verification of potentially economic grades of
PMs and verification of IPMs previous test results of gold and precious
metals. The key thing is this was done by 3rd party consultants Bateman
Engineering and assay tests completed by an Arizona registered lab.
The Arizona lab is very important. We now have an Arizona State registered
lab that has directly confirmed potentially economic grades of precious
metals. This fly's entirely in the face of the states own department, The
Arizona Dept of Mining (AZDM). It was the AZDM that was quoted by Bloomberg,
Barrons, the Northern Miner and many other widely followed publications that
there was no gold, no platinum and IPM was a scam.
This is now verified as completely false and those who followed the AZDM
advice have sold their stock or never bought it or even worst yet, have sold
the stock short and are now on the wrong side of the fence. There is mounting
evidence that could result in a class action law suit by shareholders and
past shareholders of IPM against the AZDM. Whether this happens or not does
not really matter.
Many investors are disappointed that the confirmed grades on Friday were
not a lot higher. There is one simple reason. In order for Bateman to conduct
a verification program they had to take samples from an area that was not
recently worked on and a location unknown to IPM and others untill after the
fact. What is very revealing that I learned late yesterday is that the
results reported on Friday compare very closely to drill results reported
earlier by IPM on nearby drill holes. Again a confirmation that IPM has
reported honest fact. The previous results of around 0.25 opt gold with the
Auric fire assay was simply on an area of higher grade ore.
Since we are on the topic of Auric. What happened to them? I mentioned
that Bateman Engineering was the best thing to ever happen to IPM. Briefly
when Bateman first became involved with IPM they visited Auric along with IPM
to investigate Auric's work. Auric had this fire assy that worked very well
but Auric wanted IPM to pay a lot of money for its use. Quietly Bateman
pulled IPM aside and basically said there is no need to pay for this, we can
do it for you. This has impressed me so far about Bateman. In approx two
short months of barely getting their feet wet they have come up with, tested
and handed over to an Arizona lab a fire assay that works. I am very
optimistic that Bateman will complete many other tasks to put BRX into
production.
I was an investor early on in the Nevada gold rush and the discovery of
the Carlin Trend. There was all the same controversy. At first the gold was
hard to fire assay. It was too fine, was not visible. Critics, including
mining experts said it could never be recovered. It was uneconomic. Well
guess what, Nevada has become one of the largest gold producing areas in the
world with the lowest costs of anywhere else in the world. Nevada witnessed a
huge staking rush and investors who bought the right stocks made fortunes.
This did not happen over night or very quickly. It will not happen very
quickly with Arizona and IPM. Gold has basically been in a bear market since
the early 1980s. The best performing gold stocks and some of the best stocks
period have been those companies that exploited the Carlin gold trend.
Barrick, Franco and Euro Nevada rose and their stocks split and split and
split until the original investment at a few $$ became $100s. The reason I am
so bullish on IPM and some other desert stocks is I believe we are on the
verge of another Carlin type discovery.
The big difference is mother nature has blessed this area with a little
extra bonus called platinum. In 1998 when drill results start coming from
IPM, confirmed by Bateman there will be a huge staking rush in Arizona. This
is already begun, but so far at a slow trickle. I have told you about Golden
Thunder and just last week I learned of another Vancouver junior who has
staked land in Arizona.
Lets just assume for a moment that what IPM has been telling us is real.
What are we really looking at on the BRX property.
First off lets not assume huge rich grades or vast amounts of metal locked
up in some complex ore. Just look at the known test results to date.
Previous IPM work has outlined 0.046 opt AU in the 1st sq kilometer. PGM
group metals have shown up in tests with grades equal to gold or better.
Particularly Creelman's work which indicated grades better than the gold.
IPM has revealed to me several times that silver runs around 1 to 2 opt.
Friday's results came up with 1.48 opt silver. When drill results come out
over the course of the next several months we should see more results like we
did on Friday, we will also see results around 0.25 like the Auric sample. I
expect we will see many much higher results also. I personally have witnessed
some much higher assays. It is the nature of all mineral deposits that the
grades will vary in different locations. Lets not assume any high grades of
ore but grades I think are realistic and reflect all the compiled data thus
far at BRX.
What might a ton of ore be worth
Using Friday's metal prices, Gold=305, Silver=5.07, PT=391, Pd=210
Gold at 0.046 opt = 14.03
Silver 1.48 opt = 7.50
Pt 0.046 opt = 17.99
Pd 0.046 opt = 9.66
------------
Total = $49.18
Bateman Engineering claims they have processes that could recover these
precious metals for as little as $10/ton. I put this question to Lee Furlong
on the weekend and while he said it is too early to know costs, he did
confirm Bateman's $10 number.
To me this is not unreasonable and with the worlds largest engineering
firm at the helm, I have a lot of confidence. I know for a fact that bulk
tonnage mines can move and process ore for as little as $1/ton. The BRX ore
body has a zero strip ratio and is laying on the surface, major
infrastructure is nearby. This all points to low cost and $9 more
for recovery of metal is not unreasonable. The only way one of the Desert
companies is going to reward shareholders big time is to prove up an ore body
with drilling, calculate reserves and proceed to a bankable feasibility.
Perhaps 1/2 $billion will be needed to build the type of mine capable of
processing the bulk tonnages of ore at low cost needed to process the desert
ore. Just like the bulk tonnages of the Carlin Trend.
With ore worth $50/ton and costs at $10, this mine will be very
profitable. If IPM proves higher grades it is all gravy. There is no reason
to even assume the 1st sq km is the best grid. IPMs early in house results of
the 30 deep holes and surface work are showing higher grades of gold to the
SE and higher Platinum in the North. Where the best grade ore is and how
much there is will not be known until more drilling and results become
known. Indications thus far is that there is potentially 12 sq kms of
economic ore. There is no doubt a large tonnage mine is the way to go and IPM
is the only desert stock thus far advancing towards this goal.
You don't buy a stock like IPM for quick profits. Just like the stocks
involved with the Carlin trend, you simply buy them and watch them grow over
the years. Can you make a big quick profit with IPM?
Well actually at the moment you can. The Institutional Investors will soon
figure out what I am saying and the huge short position in the stock will
want to cover their positions before drill results start flowing. This will
create a huge short squeeze in the stock. IPM stock price will rocket ahead
and after the squeeze is over it should come back down to a level that
reflects the speculation of the drill results.
Therefore any pull back in the share price over the next several weeks or
days I see as the last opportunity to buy this stock cheap. 1998 will be a
wonderful year for investors in the desert stocks, regardless of where the
price of precious metals go.
Feel free to pass this on or post
The information contained herein is based on sources and data which
we believe reliable, but is not guaranteed by us. This firm and/or their
employees, officers or members of their families and investment portfolios
managed by such organizations may have a position in the securities and/or
options relating thereto and may make purchases and/or sales of these
securities or options relating thereto from time to time in the open market
or otherwise. Furthermore, this information is furnished for information
purposes and is not intended to be construed as an offer to buy or sell
securities.
Ron Struthers Editor of Resource Stocks Advisory
Resource Stocks Advisory, P.O. Box 335, Owen Sound, Ont., Canada, N4K 5P5
High Profit Mining Stock Selections and Investment Strategies
Email: resource@sentex.net Website "http://www.sentex.net/~resource"
Phone 519-372-8855 FAX 519-372-8684 |
