SPECULATIVE BUY Ashton Mining of Canada (ACA : TSE : $0.75 : Issued
35.9M)
Graeme Currie (604) 643-7405
* With the November/December period often representing the time in
which speculative investors consider the concept of bottom feeding, or
scavenging, within the junior resource sector, we will continue to
highlight a number of our favourite juniors herein
* Ashton has recently seen a change in its major shareholder brought
about by the recent acquisition of its parent Ashton (Australia) by
Rio Tinto. Thus as part of that transaction Rio Tinto gained a 68%
control position of Ashton. To date Rio Tinto's position on this
control block is that it is not planning to expand its holdings in
Ashton (Canada)
* As a core asset, Ashton (Canada) has very strong geological and
management expertise in diamond exploration and mining. This is
augmented with its own analytical laboratory for the processing of
samples. So far success has eluded this well managed, high quality
junior, although just announced results from the K252 kimberlite
provide for optimism in 2001.
SPECULATIVE BUY Ashton Mining of Canada (ACA : TSE : $0.75 : Issued
35.9M)
Graeme Currie (604) 643-7405 graeme_currie@canaccord.com
HIGHLIGHTS
* With the November/December period often representing the time in
which speculative investors consider the concept of bottom feeding, or
scavenging, within the junior resource sector, we will continue to
highlight a number of our favourite juniors herein
* Ashton has recently seen a change in its major shareholder brought
about by the recent acquisition of its parent Ashton (Australia) by
Rio Tinto. Thus as part of that transaction Rio Tinto gained a 68%
control position of Ashton. To date Rio Tinto's position on this
control block is that it is not planning to expand its holdings in
Ashton (Canada)
* As a core asset, Ashton (Canada) has very strong geological and
management expertise in diamond exploration and mining. This is
augmented with its own analytical laboratory for the processing of
samples. So far success has eluded this well managed, high quality
junior, although just announced results from the K252 kimberlite
provide for optimism in 2001
Recommendation: SPECULATIVE BUY
52-week range: $1.50-0.51
Shares O/S: basic 35.9M
f.d. 41.9M
Major shareholders: Rio Tinto, 68%
Working capital: $6.5M (CCC est.)
Weekly trading vol.: 84,300 shares
Long-term debt Nil
Market capitalization: $26.9M
Asset Statistics
Key prospects: Buffalo Hills in Alta, NWT, and Nunavut
2001 budget: (CCC est.) Gross $2.5M
Geographic location: Northwest Territories, Canada
Sector: Junior Mining
Web site address: www.ashton.ca
Ashton: One of this countries Better-Positioned junior diamond
Explorers
Ashton was incorporated in Canada to act as the exploration and
development arm of its parent, Ashton Mining. As a core asset, the
company has very strong geological and management expertise in diamond
exploration and mining. This is augmented with its own analytical
laboratory for the processing of samples. With the recent bidding war
for parent Ashton (Australia), the Canadian subsidiary had seen its
share price spike to as high as $1.00 in the summer and prior to
yesterday's release had tumbled back to as low as $0.55/share . Ashton
Mining of Canada is now under the voting control of Rio Tinto.
K252 pipe Yields Encouraging initial Results From 1.28 tonnes of
Processed Core
The Buffalo Hills project in Alberta remains one of the company's key
focus areas. Ashton holds a 44.7% operating interest. The company
completed a four-hole 1.45 tonne sample, extracted via core holes,
from the K252 kimberlite in the past summer. The material was tested
for macro diamond content in Ashton's dense media separation plant and
yesterday the results were released. Previous micro diamond results
from K252 were among the best from the 35 kimberlite bodies discovered
in the project area to date. The results yielded a total of 0.85
carats from 1.28 tonnes of processed material. All stones were larger
than 0.8 mm with the largest stone, reported as colourless, being just
over one-third of a carat, quite encouraging given the size of the
sample. The K252 pipe is reported as exhibiting two distinct phases,
however due to difficult ground conditions the material sampled came
only from a fine to medium grained volcaniclastic phase, leaving the
kimberlite breccia phase as yet untested. Ashton reported a grade of
0.66 c/t from this sample, but given the small sample size this figure
cannot be viewed as representing the entire population within the pipe.
More work is certainly merited though from these initial results. We
expect the company to now increase the size of their 2001 program with
the next phase to be a larger mini-bulk sample. We would expect a
sample size to be at least 15 tonnes minimum, acquired through large
hole diameter drilling. As well, given the geophysical characteristics
of K252, in 2001 there will also be a renewed effort to prioritize
other targets of similar signature for drilling. We expect drilling to
resume in Q1/01. Partners in this project include Alberta Energy (AEC :
TSE : $65.25, 44.7%) and Pure Gold Minerals (PUG : TSE : $0.14, 10.6%).
In Nunavut and the NWT, Ashton holds varying majority interests in
over 15 projects. The current focus is the processing of some 50-plus
metres of drill core from the newly discovered Perseus kimberlite
sill, held 84.5% by Ashton. Previous surface work yielded encouraging
micro diamonds in kimberlite float. Results are due by year-end. The
partner in the project is Pure Gold (PUG : TSE : $0.14, 15.5%).
Ashton: another "Scavenger" Candidate focused on the Diamond Sector
Ashton holds an enormous, prospective property portfolio combined with
a proven, experienced, diamond exploration team. So far, success has
eluded this quality junior. The results from K252 are certainly
encouraging and will result in an improved focus by the partners for
2001. Should further results continue to verify grades of over 0.5
ct/t the market interest in the Alberta diamond area may return. At
its present market capitalization (less working capital) of roughly
22 million, Ashton is not the least expensive among its' peers but
with the recent results from K252 coupled with the balance of its
portfolio we view this company as a good candidate for speculative
accounts.
The information contained in this report is drawn from sources
believed to be reliable, but the accuracy and completeness of the
information is not guaranteed, nor in providing it does Canaccord
Capital Corporation ("Canaccord Capital") assume any liability. This
information is current as of the date appearing on a report within
this Site and Canaccord Capital assumes no obligation to update the
information or advise on further developments relating to these
securities. The information contained in the report is directed _only_
at, and any securities being offered are available _only_ to, persons
resident and located in British Columbia, Alberta, the Yukon, Ontario
and Quebec. Canaccord Capital, its affiliated companies and their
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