Corrections
In reference to posting number 260, a few corrections are in order.
Spelling:
Kennecott is the spelling for the company that is exploring one of the Mexican properties.
Koppen is the last name of the previous owner of the Mexican properties.
Cominco is the name of the company that previously had claim to the Carboneau property.
Numbers:
Outstanding shares is now about 3.8 million. Float is still around a half million.
For the Los Colorados mine, cvr owns 28% of the mine. gud owns 29% so the total that Len and associates have is 57%. Therefore:
Estimated income at 28% ownership is $2,795,520 per year
Estimated outstanding shares is 3,800,000 shares
EPS is $0.74 per share
P/E at $1.26 US price is 1.7
Typical producing mines trade at 10 to 20 times their P/E which would equate to about a $17 to $34 share price I still don't know if that assumption is true - anybody know?
For the other Mexican properties, cvr owns 25% and gud own 25% for a total of 50%. I had assumed that cvr owned 50% of these other Mexican properties. Therefore:
Exercising the option gives cvr, gud, and the other partner a total of $5,000,000 at the end of this year and another $24,000,000 at the end of next year. This has the following effect.
cvr net income $1,250,000 in 1997
eps contribution $0.33
Eckhardt Koppen
I was mistaken about how long Koppen has been in and working in Mexico. The mine was originally started way back but was shut down in the late 30's after a mining accident. The mine stayed shutdown for this entire time. Koppen arrived in Mexico about 12 years and obtained the Los Colorado mine area about 4 years ago. Upon acquiring ownership, he produced gold there for a short time netting himself a nice profit with which he staked out much more property in the Durango region.
Carboneau Property
The Carboneau property is owned by Vulcan as mentioned in a previous post. cvr has the options to acquire 50% if they so choose and if they spend the contractual amount in exploration.
Two holes are now completed and the results look very encouraging. The two holes so far show a structure that confirms that the mineralization found in the soil and lake samples actually are the result of leaching from the bedrock. Thus the mineralization was not caused by soil being deposited by glacial movement. This is very good news.
The two hole samples also show mineralization in a structure that is very similar to what one might expect to find in sed-ex structures. However, no assays have been performed as of yet on the samples nor is it concluded that this is in fact a sed-ex deposit. It just looks good so far.
Richard Garnett is expected to visit the property soon after his African holiday is over next week. We can probably expect to see a report from him soon afterwards. Let's keep our fingers crossed that this is the next Diamond Fields.
Los Colorados Gold Mine
The mine preparation is going very well. 4 shafts are open and a fifth area has been located that is a continuation of a vein lost earlier in the year. This reestablished vein is said to be very rich based on assays done at the location. However, they have not been confirmed independantly.
The folks in Vancouver are not sure whether the mine is producing or not and if it is not, they are not sure why. All they know is that they have told the crew to start that baby up.
Sonoma Property
cvr will begin exploring another of their Mexican properties next week - the Sonoma property. The property is said to have all kinds of poly metalic stuff all over the place. Poly, as explained to me, means many and the whole term implies that many different kinds of metal or mineralization are visible in surface samples.
A geologist is being sent in with his support crew to begin exploration - next week!. This property is viewed by cvr as being the one with the most percieved potential for exploration.
Overall
I am hearing some sense of urgency about the need to move the stock price up from cvr that hasn't necessarily been percieved at this level by me before. They want to attract new investors and need a higher share price to enable them to finance future exploration in a timely and cost effective manner.
Sorry for having to correct some of the writeup.
Don
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