Winspear was a successful recommendation by speculativestocks.com
and this is their report on their latest recommendation.
"We will use our current guest pick of International Wayside Gold Mines IWA/VSE
wayside-gold.com
We have had this stock posted for just on a year and the perception is this
stock has very little value. But is this true?
Let us look at what we do know. Last year the stock hit a low price of $0.06
after a high of $1.30 and in September 1998 they announced the first holes on
the BC vein that created a new resource. The stock went up to $0.28 but has
drifted between the very recent $0.08 and $0.22 for most of this past year. This
is mainly due to the current weakness in the gold market.
The Company has the Cariboo Gold property between Wells and Barkerville, in
British Columbia, wholly under their control. This mining camp has produced over
3 million ounces of gold and Wayside believes there is possibly as much again in
situ able to be mined for a profit. ( Ah! A wonderful word this 'Profit' ) The
mine camp has records going back for many years and Wayside has correlated all
this information into computer models that show where the gold was mined, what
values, what drilling was done and where, and most importantly what drill holes
were completed and no more work performed.
The BC vein is a classic example of this. This vein had a 10,000ft drift driven
to it in the 40's yet very little work was ever done on the vein until the
recent drilling program that has consistently found grades of .28oz/tonne. This
vein is 2,400 ft long and between 15 and 30 feet wide extending to a depth of
800ft. In short a considerable resource. There has not been an official resource
given out by the company to date however they have been drilling this
consistently and new assays are due to be released from the latest round of
drill holes very shortly.
We have done our own calculations here and suggest that 2,400ft x 800 x say 15ft
as an average width at assuming an average 0.28oz/tonne and using a figure of 12
cu/ft to a tonnes, should give a deposit of around 670,000oz. Of course we must
reiterate, without confirmation, this is only a speculation on our part.
Next to it, by drilling underground and correlating all the old information
Wayside has delineated a 1 million ounce plus resource of the Gold Quartz
property that is currently being advanced to the permitting stage. All that is
needed to take it into the reserve category is a few more holes. ( actually 120
holes on fifty foot centers )
Now in January they acheived the consolidation of the entire property by taking
an option for the Mosquito and Island Mountain property, ( A look at their
website map wayside-gold.com gives an idea of the proximity
of all these properties that surround the town of Wells.)
These two mines again, were explored and mined over a number of years and were
never mined out. We understand that in the historical records there was a drill
hole completed by Hudsons Bay mining that assayed out at 2oz/tonne and yet this
was never followed up. In todays environment where data can be rapidly analysed
using computer modelling technology, it doesn't take much to correlate all the
old data to show where to drill and Wayside has been drilling this property
through Island Mountain Gold IGM/VSE that Wayside gave an option to earn 50% of
the Mosquito and Island Mountain properties. ( IGM has common directors and upon
shareholder approval the President of Wayside will also be the contolling person
in IGM ) Keeping it all in the family so to speak.
This has achieved a couple of things. It has reduced any further dilution in
Wayside and has enable further funding to bring the property closer to
production. The Mosquito/Island properties still have unmined ore and there is
every real opportunity to create another possible 500,000oz on this side of the
property.
Now let's see, we have 1,000,000 plus 600,000 plus another possible 500,000
ounces to bring us up to 2.1 million ounces of gold. There is a mine application
permit in process and there is a fully permitted mill on the Mosquito property.
They have instant access through the existing underground workings to very close
proximity to the orebodies, so the cost to go into production will be very low
in comparison to many mines and the stock is at $0.10CDN.
We have a company that, in the worst possible gold market enviroment that can be
imagined, is still raising funds and drilling, proving up resources. Why would
they do that if there wasn't value there. Especially when we consider the many
other exploration companies that have closed the doors and put up notices saying
' call me in the spring, we're hibernating'.
We also have the major mining companies cutting their exploration budgets to the
bone and curtailing many exploration projects. So where are they going to get a
quick replacement for ore that is rapidly being depleted by high grading. They
will get it from buying out companies such as Wayside of course.
Now we could go into the proposed economics of the Wayside property, but at this
point it would be even worse speculation than the amount of gold we have
surmised is there. We do believe though that with an open pit operation the
costs should be somewhere in the area of $180/oz and at the current gold price
of $256/oz this would leave a gross margin of $86/oz The ore from the BC Vein
and any ore from the Island Mountian/Mosquito area could be added to or
processed separately from the open pit ore.
The current value of the speculated resource at todays gold prices would be
about $560 million, however that is somewhat unrealistic today, so let us
calculate what someone would buy it for in the event this 2.1 million ounces is
actually there. Say $15oz in the ground and 25 million shares outstanding would
give a value of a little over $1.00 a share and the stock price is $0.10 or one
tenth of the value.
In the event these costs are proved to be reliable this is enough to make this
project extremely viable. So now we have some sort of an answer as to whether
the perception and the value can be correlated.
Now what about the major mining companies? Well we know Kinross has a stock
position made via a private placement some years back ( about 6% ) and we hear
Homestake has been actively looking at the property. We also hear another Major
has expressed some interest. Is this information reliable? Well it's like buying
a car. We expect many of the seniors are always kicking tires to see whether
there is any value they can avail themselves of, so at this point we would
expect that any interest today is just that, kicking tires. Any further large
finds on the property however will change that in a hurry.
Much of this property has never been explored, much that has been explored has
been a little haphazard. The BC vein had never been drilled until last year and
there are a number of other veins on the property that have never been drilled
to this date. So the expectation of more and significant finds cannot be
discounted." |
