Got this in my E-mail:
SuperPickers - angelfire.com
I will be gone today, but I got an alert from a fellow group leader on
this stock. The stock appears to be undervalued and has a real low float.
The combination of these two facts should make this stock a mover in the
next few days.
TW--StockBusters
Cerro Dorado Inc. (OTC-BB: CDCH) -- Patagonia Capital Initiates Investment
Coverage
With Strong Buy Recommendation
Patagonia Capital Corp. Initiates Investment Coverage With
Strong Buy Recommendation For:
------------------------------
Cerro Dorado, Inc. ("CDCH" on OTC - BB)
---------------------------------------
1399 South 700 East Suite #17 Salt Lake City, Utah 84105
Phone: (801) 484 - 2668 Fax: (801) 486 - 3633
Website: cerrodorado.com
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An undervalued mining company characterized by an
incredibly tight float, participation in a rapidly-developing
area play, and significant ownership of what quite possibly may be
one of the largest Cu-Au discoveries ever made in Chile!!
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KEY REASONS FOR INVESTING IN CERRO DORADO:
------------------------------------------
(1) Tight Share Structure - we estimate that there are about 700,000
unrestricted shares of CDCH, of which roughly 500,000 shares are in
"friendly hands", implying a trading float of just 200,000 shares.
(2) Major News Expected Shortly - the results of geophysical surveys now
in progress on the CDCH and adjoining Medinah Mining (MDHM on OTC-BB)
properties are expected to verify the presence of a major potential
breccia pipe on Cerro Dorado's property, plus a second breccia pipe on
the adjoining Medinah Mining grounds. MDHM is reportedly in
negotiations with some of the 16+ major mining companies and private
funds that have signed a non-disclosure agreement concerning a
comprehensive joint venture / development / financing package for Alto
de Lipangue; the MDHM deal may include Cerro Dorado's property, or a
separate financing might be structured with one of the major mining
companies or funds interested in the MDHM deal.
(3) A.C.A. Howe Report Verifies Property Potential - Cerro Dorado's
Fortuna property recently received a resounding "thumbs-up" from
A.C.A. Howe, a prestigious international mining consulting firm. This
very bullish report provides significant credibility and verifies the
world-class potential of the Fortuna project.
(4) Large Breccia Pipe Reportedly Identified on Cerro Dorado's Property -
geophysical surveys now in progress have reportedly verified the
existence of a large breccia pipe on the southern edge of the Fortuna
project that had been previously identified by A.C.A. Howe. The
surface dimensions of the breccia are approximately 250 meters by 250
meters; no word on how deep the Cerro Dorado breccia extends but the
Lipangue breccia, less than 2 km away, has reportedly been traced to
1,000+ meters.
(5) Potential for Multi-Billion Ton Porphyry Deposit at Depth - an added
bonus for CDCH is that Medinah Mining's Lipangue breccia is trending
towards Cerro's property and that a new breccia zone appears to be
present on CDCH's property. The alteration patters found and confirmed
at Lipangue are also apparent on Cerro Dorado's property. Geologists
theorize that the parent intrusive to the CDCH and MDHM breccia pipes
that run SW to NE across the Lipangue plateau (towards and onto Cerro
Dorado's ground) may underlie the entire mountain at depth - leading
to the possibility of a very large bulk tonnage gold-copper porphyry
deposit.
(6) Area Play Rapidly Developing @ Alto de Lipangue - conventional wisdom
would suggest that whichever major mining company (among the 16+ firms
currently evaluating Medinah Mining) winds up acquiring / developing
the Alto de Lipangue and Dos Marias properties (two major
discoveries), that a similar offer would be made for Cerro Dorado,
which owns the northern and eastern extensions of the Lipangue breccia
system. The location of Cerro's claims adjacent to Medinah's Lipangue
discovery, combined with their own potentially sizeable breccia pipe,
makes CDCH a tremendous play, and any success attained by either Cerro
or Medinah on the current geophysical surveys and upcoming drill
programs should be immediately reflected in the market price of both
companies.
COMPANY BACKGROUND
Cerro Dorado, Inc. ("CDCH" on OTB - BB) is a junior exploration company
that was formed in March 1999 following a 15:1 reverse split, name change
and a new management team taking control of Weather All Manufacturing Corp.
The Company's primary objective is to explore and develop its Lobo /
Solatario - Fortuna de Lampa & Ipun Island claims to the point that a major
mining company will either join Cerro Dorado as a joint venture partner in
further exploration and development, or, make a tender offer for the
Company. In contrast to most junior companies, Cerro Dorado owns its
properties outright, something we believe will prove to be a big plus in
future negotiations with major mining companies.
One of Cerro Dorado's "hidden assets" is its relationship with Sr. Juan
José Quijano, a professor of mining law at Santiago University, and dean of
Chile's law school.
Sr. Quijano was recently appointed by the Peruvian Mining Commission to
re-write Peru's mining laws; previously, Sr. Quijano had led the team that
successfully re-wrote Chile's mining laws and investment codes. We believe
that Sr. Quijano's association with Cerro Dorado provides significant
credibility to CDCH's Chilean operations. With his political, industry and
government connections, we believe that Sr. Quijano's ties to Cerro Dorado
will prove to be invaluable in terms of permitting / developing properties
they now own, as well as getting access to other potentially world-class
projects in Chile and Peru.
Cerro Dorado's discussion threads on Silicon Investor and Raging Bull can
be accessed at Subject 24425 and
ragingbull.com, respectively.
CERRO DORADO SHARE STRUCTURE & RECENT TRADING RANGE
Total Shares Outstanding: 10.7 million
Restricted / 144 Shares: 6,353,333
Shares Held by Private Investors: 4 million
Public Float: 700,000 shares
1999 Trading Range: US$0.45 (low) by US$2.90 (high)
Last Trade (September 3, 1999): US$1.06
Of the publicly traded float, about 500,000 shares are in "friendly hands",
so only about 200,000 shares of CDCH actually trades. Earlier this year,
the stock was cleaned up to US$2.90, suggesting that even modest sustained
trading volumes can move the price far above current levels. There are
suspicions that the same groups which have allegedly been shorting MDHM
have recently begun shorting CDCH as well. If that's the case, then the
first major news release could force the shorts to cover in a big hurry!
FORTUNA - A HIGH GRADE, PAST-PRODUCING MINE - IS CURRENTLY BEING REPOENED
The 270-hectare La Fortuna de Lampa ("Fortuna") project is located about 40
km NW of Santiago in the coastal range of Chile at an elevation of
approximately 2,000 meters. Cerro Dorado acquired a 100% interest in the
Fortuna project in April 1999 (subject to a 20% NPI capped at US$5
million).
Fortuna is bordered to the west by Medinah's Alto de Lipangue project,
where a huge (200 by 400 meters, projected to at depth of at least 1,000
meters) gold-copper breccia was recently discovered. Interestingly, the
biggest gold nugget ever recovered in Chile was found on the Fortuna
property - it's currently on display at the mining museum in Santiago.
The area surrounding the Fortuna mine has been exploited since Spanish
conquistador times for both alluvial gold and oxidized portions of the high
grade quartz veins.
The first modern day mining activities at the Fortuna property occurred
around the turn of the century during which time the mine was worked for
several years; several decades later, in 1941, mining activities started
again, and, over the next 30 years, approximately 2,000 MT ore were mined,
with recovered grades averaging 64 gm Au and 52 gm Ag.
At present, there are over 1,100 meters of underground development on four
levels at Fortuna (about one-third of the development representing drifting
along the Fortuna vein), including six shafts and five chimneys.
Independent geologists and engineers estimate that by re-opening the old
workings (work that is currently in progress) that at least 80% of the ore
reserves still in place would be available for mining and recovery. The
Fortuna mine has a great deal of potential for new resources to be
discovered beyond the limits of the existing proven, probable and possible
ore blocks.
The vein style gold mineralization at Fortuna occurs in a series of
sub-parallel, fault-hosted quartz veins that strike N-NW and dip fairly
steeply to the northeast. The main vein on the property is called the
Fortuna vein; it can be traced underground and on surface over a total
strike length of about 800 meters, and remains open at depth and along
strike to the south. The mineralized quartz veins are narrow (averaging
about 30 to 50 cm in thickness) but extremely rich.
On the surface, several other veins occur within 5 or 10 meters in the
hanging wall of the main vein and may be splays off of the main structure
or fault-repeated veins. West of the Fortuna vein, at least 5 sub-parallel
veins or vein zones ranging in width from 0.2 to 2 meters have been
identified by A.C.A. Howe.
At this time, Cerro Dorado is working on the US$1.1 million two-phase
exploration program recommended by A.C.A. Howe; a 20+ line km geophysical
program is currently in progress, along with detailed surface mapping and
reopening the old Fortuna mine. Later this fall, CDCH plans a 6,000 meter
diamond drilling program.
STRONG INDICATIONS OF WORLD-CLASS Au-Cu BRECCIA PIPE ON CDCH PROPERTY
At the very south end of CDCH's Fortuna property, a low bowl-shaped area
(measuring about 250 by 250 meters) has been identified. Although no
outcrop has been found, the area has a similar surface expression as
Medinah Mining's newly discovered Alto de Lipangue copper-gold breccia
pipe, located about 1.75 km to the southwest.
Drilling at Medinah's Lipangue breccia has returned impressive results. The
discovery hole (L99-03) intercepted 84 meters averaging 1.72 g/t Au, 10.07
g/t Ag and 0.40% Cu. Two step-out drillholes (L99-06 & L99-07) returned
intercepts of 154 meters grading 0.60 g/t Au, 13.7 g/t Ag and 0.39% Cu &
124 meters averaging 0.49 g/t Au, 9.68 g/t Ag and 0.31% Cu, respectively.
There are reports that geophysical surveys now underway on the adjoining
property have traced the Lipangue breccia to a depth of over 1,000 meters.
More importantly, the surveys apparently have discovered two other sizeable
breccia pipes on the Alto de Lipangue plateau - one of which, we believe,
is situated on the southern part of Cerro Dorado's Fortuna property!
Robert Cintis, the author of the A.C.A. Howe report, observed in his report
(p. 50) that "often breccia deposits will occur in clusters and it would
not be unrealistic for additional pipes to occur on the Lipangue plateau."
More importantly, breccia pipes are often indicative of a major intrusive
or porphyry system at depth. The distance between Medinah Mining's Lipangue
breccia and the apparent breccia pipe on Cerro Dorado's property suggests
that a massive Au-Cu porphyry deposit with world-class tonnage potential
may underlie the Lipangue plateau!
A.C.A. HOWE INT'L REPORT SUBSTANTIATES POTENTIAL OF CDCH PROPERTY
Howe Chile Ltda. ("Howe"), part of the A.C.A. Howe International group of
companies, recently issued a geologic report on Cerro Dorado's property.
The report's conclusions and recommendations (pg. 55) were:
(1) "The Fortuna vein....can be traced at least 800 meters along strike,
widening to the south, and based on the previous underground sampling
programs, shows a remarkable continuity in gold values over its 300
meter strike length and 100-meter down-dip extension in the mine."
(2) "...the Fortuna Property could host a significant gold resource, that
it is open to both the south and at depth and that with a minimal
exploration program the potential size of the deposit can be
substantially increased. Other parts of the land position have only
been reviewed on a preliminary basis, or not at all, and should be
further explored, since the potential exists for additional
Fortuna-style veins. Other early-stage targets occur on the property,
such as the possible breccia target in the south that should be
further explored. Howe concurs with these target objectives."
(3) "The Fortuna Property area should be evaluated for small tonnage, high
grade, vein-style gold mineralization and large bulk-tonnage mineable
copper-gold breccia style mineralization..."
IPUN ISLAND GOLD PROJECT (CHILE)
On June 23rd, Cerro Dorado issued 600,000 restricted shares to acquire a
60% interest in the Ipun Island project, located 400 km south of Puerto
Mont, Chile. Medinah Gold, Inc. (a private company) holds the remaining 40%
interest in the project.
Ipun Island, approximately 10 km long and 19 km wide, hosts large areas of
gold-bearing placer sands covering major sections of the shoreline and
inland dunes; bedrock-hosted gold deposits are presumed to be the source of
the placers. The island has a mild climate, and the property can be
accessed and worked year-round.
A preliminary evaluation by Ralph Bonham suggests that with a modest amount
of additional exploration work, Ipun Island might be developed as a
small-scale, low cost placer operation, generating sufficient cash flow to
fund a comprehensive exploration program that would assess the island's
placer and lode potential (for both gold and PGE's).
Cerro Dorado has deferred work on Ipun Island for the time being, electing
to concentrate on its Fortuna property.
WHY YOU SHOULD CONSIDER ADDING CDCH TO YOUR PORTFOLIO!!
We believe that Cerro Dorado is a significantly undervalued mining company
with an incredibly tight trading float (est'd @ 200,000 shares) that holds
a key land position in a rapidly-developing area play.
Based on our visit to the property in August 1999, we believe that the
final interpretations of the geophysical surveys in progress will establish
the presence of a major Au-Cu breccia pipe (est'd dimensions of 250 by 250
meters) on the southern boundary of CDCH's Fortuna property, with one,
possibly two other breccia pipes on Medinah Mining's adjoining Lipangue
property that strike and dip towards Cerro Dorado's ground. At depth,
geologists theorize that there may be a multi-billion tonne porphyry system
underlying the Lipangue plateau that is the source of the Au-Cu
mineralization.
An aggressive exploration work program is underway at Fortuna, and
significant results are expected shortly on the geophysical surveys.
Likewise, we understand that negotiations are underway with several of the
16+ major mining companies and investment funds that have been evaluating
the adjoining Lipangue / Dos Marias properties of Medinah Mining, and that
a significant joint venture or financing may be imminent for the property
next door.
Cerro Dorado will benefit from one or both events: discovery of a major
Au-Cu breccia pipe on the Fortuna property would be a significant
development; so would a major JV or financing for MDHM to explore and
develop a similar target on the adjoining property.
We view Cerro Dorado as a STRONG BUY at current prices, with potential for
significant capital appreciation over the next six to twelve months.
For more information, please contact:
Jim Robertson - Manager
Phone: (801) 484 - 2668
DISCLAIMER
Patagonia Capital Corp. ("Patagonia Capital") is not a Registered
Investment Advisor or a Broker / Dealer. Readers are advised that this
report is issued solely for information purposes and is not to be construed
as an offer to sell or the solicitation of an offer to buy. Reproduction of
this report, in whole or in part, by any means, electronic or otherwise,
including via the Internet, without prior written permission of Patagonia
Capital, is strictly prohibited.
Patagonia Capital has independently prepared this report, drawing upon a
range of public news and information sources, as well as data and opinions
provided by Cerro Dorado, Inc. ("CDCH" or the "Company"). Prior to
Patagonia Capital issuing this report, the Company reviewed and approved
the contents hereof. Patagonia Capital has not independently verified the
Company's representations. Any opinions expressed in this report are
statements of judgment as of the date of publication (7 September 1999) and
are subject to change without further notice, and may not necessarily be
reprinted in future publications or elsewhere. Neither Patagonia Capital
nor its officers, directors, partners or employees / consultants accept any
liability whatsoever for any direct or consequential loss arising from any
use of this report or its contents.
The information contained herein is not intended to be used as the sole
basis of any investment decisions, nor should it be construed as advice
designed to meet the investment needs of any particular investor. The
opinions and analysis included herein are based on sources believed to be
reliable and in good faith but no representation or warranty, expressed or
implied, is made as to their accuracy, completeness or correctness. The
foregoing discussion also contains forward-looking statements that are
based on current expectations and differences can be expected. The
information and opinions contained herein is not intended to be a complete
discussion of information regarding some of the current and/or intended
business activities of the Company, and all information contained in this
report should be independently verified with the Company. Readers are urged
to consult with independent financial advisors with respect to an
investment in the shares mentioned herein. Investors should review a
complete information package on the Company which should include, but not
be limited to, the Company's annual report, quarterly report, press
releases, as well as all regulatory filings.
In order to be in full compliance with the Securities Act of 1933, Section
17(b), Patagonia Capital advises the readers of this document that it has
received 67,500 common shares of Cerro Dorado under the terms of an
eight-month consulting / marketing services contract, pursuant to which
Patagonia Capital will be periodically writing and disseminating research
reports on CDCH, in addition to providing the Company with public
relations, investor relations, broker relations and other equity market /
Internet consulting services. Patagonia Capital, its officers, directors,
partners and employees / consultants may profit in the event the shares of
the Company increase in value. These positions may be liquidated from time
to time even after Patagonia Capital, its officers, directors, partners and
employees / consultants have made positive comments regarding the Company.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE
INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS
SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK. INVESTORS MUST ALSO
INDEPENDENTLY VERIFY THE "BLUE SKY" ELEGIBILITY OF THE SECURITY MENTIONED
IN THIS REPORT BEFORE MAKING ANY INVESTMENT DECISIONS. TIMING OF, AND ANY
BUYING OR SELLING DECISIONS, ARE THE SOLE RESPONSIBILITY OF THE READER.
We encourage U.S. readers to review the investing information available
with the Securities and Exchange Commission ("SEC") at sec.gov
and/or the National Association of Securities Dealers ("NASD") at
nasdr.com The NASD has published information on how to invest
carefully at its website.
Cerro Dorado is not yet a fully-reporting company with the SEC. The process
is expected to be completed later this year, at which time, readers can
review public filings (including financial information at the SEC's EDGAR
page, located at edgar-online.com
SAFE HARBOR DISCLAIMER
Certain statements contained herein constitute forward-looking statements
within the meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act. Such statements include, without limitation, statements
regarding business and financing plans, business trends and future
operating revenues and expenses. Although the Company believes that the
statements are reasonable, it can give no assurance that such expectations
will prove to be correct. Forward-looking statements are typically
indicated by the words: believe, expect, anticipate, intend, estimate and
similar expressions, or, which by their nature, refer to future events.
Patagonia Capital Corp. cautions investors that any forward-looking
statements made by Cerro Dorado, Inc. are not guarantees of future
performance, and that the actual results may differ materially from those
in forward-looking statements as a result of various factors, including,
but not limited to, the ability to continue its substantial project growth,
or to be able to fully-implement its business strategies.
(c) 1999 Patagonia Capital Corp.
______________________________________________________________________
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