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A nice read on my friends at JABA, just one Copper Penny, one Layer CU AG DIME US$ now: Consolidated Jaba Inc - Street Wire Consolidated Jaba takes a stab at diamonds Consolidated Jaba Inc JBA Shares issued 7,058,658 Feb 25 2002 close $.150 Tuesday Feb 26 2002 Street Wire by Will Purcell James Briscoe and John Guilbert's Consolidated Jaba has high hopes that a number of properties on the fringes of two hot diamond plays will attract enough speculative interest to revive the fortunes of the struggling company. Other explorers experienced a quick surge in interest after they acquired properties in the Otish Mountains region of Quebec, or the Coronation Gulf region of Nunavut, but so far at least, the market's reaction has been muted at best to news that Consolidated Jaba had picked up ground in both plays. Mr. Briscoe, the Tucson-based chief executive officer of Consolidated Jaba, has been involved with the company since the 1980s, but it was not until the mid-1990s that Jaba went public, through the reverse takeover of Lomico International. Jaba received a great send-off with the help of a few analysts, including Neil Maedel, the newsletter writer, who recommended the stock at $2.25 early in 1996, on the strength of the company's management, which he termed "among the best in the world." At the time, in addition to Mr. Briscoe, that management group included Mr. Guilbert, who was a professor at the University of Arizona for many years, as well as the Vancouver-based Don Sharpe, who was president until he suddenly quit late in 1997. Jaba shares hit a high of $4.30 in the spring of 1996, on the strength of those optimistic pronouncements and a drill program on a Nevada gold property, but that turned out to be the high point. Things soured the following year, as the Bre-X fiasco and a downturn in Asia brought a collapse in the resource sector. By the fall of 1997, Jaba shares were trading for less than 30 cents, and Mr. Maedel seemed much less enamoured with Jaba's management, especially after Mr. Sharpe walked away. Gold had hit the skids, but the company was quick to find a new prospect. In the summer of 1998 it was a four-billion-pound copper play that the then 15-cent Jaba touted as "a stunning asset." Unfortunately, speculators were less than stunned by the deal, and Jaba's shares continued to slide, dipping below the 10-cent mark just weeks later. By the end of 1999, a Jaba share could be had for a single copper penny, and the company consolidated its shares on a 1-for-10 basis. With Consolidated Jaba's new shares again trading for less than 20 cents, the company again jumped onto a new hot commodity, striking a deal to acquire a platinum play in Argentina that had the company gushing with optimism once again. The project was touted as possibly "one of the largest unexplored layered ultramafic intrusive complexes in the world," and the play attracted some notice when Southwestern Gold Corporation struck an option deal to explore the property. All that got the market's speculative juices flowing and Consolidated Jaba's shares hit a 58-cent high in March of 2001. From there, it was downhill once again. Southwestern set to work on the Argentina project, but the news did not match the market's expectations, and by last fall, Consolidated Jaba was once again a 10-cent stock. Meanwhile, a number of Canadian diamond explorers had been making news on a number of fronts. Fuelled by some encouraging diamond counts obtained by Ashton Mining of Canada, many explorers began flocking to the Otish Mountains region of Northern Quebec, and to the region southeast of Kugluktuk, in southern Nunavut. Ashton's shares jumped from the 50-cent mark to a high of $4.65, and several juniors saw their share prices quintuple after they acquired ground in one of the two hot regions. In mid-January, Consolidated Jaba tried its luck, striking a deal with John Robins and Lawrence Barry's Hunter Exploration Group that would allow Jaba to earn a 70-per-cent stake in nearly 50,000 hectares of ground on the northern portion of the Coronation play. To earn the interest, Consolidated Jaba must spend $1-million over a four-year period, although only $100,000 is due the first year, and $200,000 the next. The deal gave Jaba's stock a bit of a boost, although the gain was comparatively modest. The stock, which had been trading for about 12 cents prior to the deal, managed to hit a high of 20 cents in the days following the news. Early in February, Jaba tried again. The company struck another deal with Hunter, acquiring about 8,000 hectares of ground in the Otish Mountains region. The company now had a land position in a second hot region, but speculators seemed decidedly cool to the news. Jaba's shares clung to the 20-cent level for a few days, and then began to drift lower. A gentle reminder from the company failed to produce the desired effect, and Jaba's shares closed last week at just 15 cents. Although it is Quebec that seems to be the hotter of the two plays at the moment, it is in the Coronation district that Consolidated Jaba has its larger properties. The company's ground is contained in two separate blocks of roughly equal size. The northwestern block is located about 50 kilometres to the southeast of Kugluktuk, just to the west of ground held by Stornoway Ventures and Hornby Bay Exploration. That gives the block a decidedly rural address, lying about 100 kilometres to the northwest of Artemisia and Potentilla, the two Ashton kimberlites. The second block is on the northeastern fringe of the Coronation play, about 140 kilometres east southeast of Kugluktuk, and about 75 kilometres to the northeast of Ashton's two kimberlites. The northeastern block is also close to ground held by Don McLeod's Stornoway, which jumped onto the Coronation bandwagon in a big way late last year. Like Consolidated Jaba, Stornoway's shares had fallen on hard times, trading for just 10 cents prior to the move. Speculators were much more taken with Stornoway's deals and the addition of Eira Thomas to the board of directors, and the stock hit a high of $1.07 early this month, before falling back to 65 cents of late. Another of Jaba's neighbours, Grenville Thomas's Strongbow Resources, also managed a 10-fold increase, jumping from two cents, to a high of 30 cents in early February. The speculative fever surrounding the Coronation diamond play seemed to peak at the end of January, and the sell-off gained momentum a week later when Ashton received the results of a tiny mini-bulk sample taken from its Artemisia kimberlite. About 1.16 tonnes of kimberlite yielded 0.20 carat of macrodiamonds larger than a 0.8-millimetre cutoff, which implied a grade of just 0.17 carat per tonne, well below what would likely be considered economic at such a remote location. The news cut Ashton's market capitalization by about one-third at one point and several other juniors saw a similar portion of their market value evaporate. Nevertheless, the Coronation diamond play seems certain to be headed for its busiest year yet. Ashton is expected to take a somewhat larger sample from Artemisia, perhaps processing about 10 tonnes of kimberlite recovered by core drilling, and a similar sample may be collected from Potentilla as well, which is the kimberlite closest to Consolidated Jaba's northeastern block, lying about 15 kilometres to the east of Artemisia. Both of the Ashton kimberlites were discovered last year. Artemisia was frequently touted as the best of the Coronation discoveries, as 331 kilograms of kimberlite yielded 1,241 diamonds, including 120 macro-sized stones. Of those, 38 were large enough to remain on a 0.5-millimetre screen, and two of them were longer than one millimetre in two dimensions. That was encouraging, but the numbers certainly paled in comparison with the economic kimberlites discovered to the southeast, in the Lac de Gras region. Potentilla also provided a bit of encouragement. A total of 208 kilograms of Potentilla kimberlite were processed, and the rock yielded 252 diamonds, including 22 macros. Ten of those diamonds were two-dimensional macros, and one of them was almost large enough to remain on a two-millimetre screen. The best of the results came from the diatreme phase of kimberlite, with the hypabyssal material containing lower numbers of diamonds. The Coronation play has been around for some time, but it got its first big blast of promotion in 2000, when De Beers discovered the large Knife pipe on ground owned by Rhonda Corporation, about 20 kilometres southwest of the Ashton finds. The hype surrounding that discovery sent Rhonda's stock from about 40 cents to a high of $1.35 in the fall of 2000, but the promotion faded away once all of the diamond counts were released. Kimberlite weighing about 400 kilograms yielded just 217 diamonds, including nine macros, two of which were longer than one millimetre. Despite the decidedly modest numbers, a substantial portion of the diamonds came from 75 kilograms of kimberlite taken from one of the three drill holes, and De Beers thought that Knife showed sufficient promise that a closer look was warranted. Last year, De Beers sent about nine tonnes of kimberlite off for processing and macrodiamond recovery. The market is still waiting for those results, apparently with modest expectations. Rhonda's shares mounted a bit of a rally earlier this year, hitting a high of 57 cents, but the Artemisia results cast a pall over Rhonda as well, as the stock closed Friday at 36 cents. The largest diamond from the region came from a kimberlite pipe discovered last year by Kennecott Canada and Tahera Corporation. The Anuri kimberlite lies further to the south, about 125 kilometres southwest of Consolidated Jaba's northeastern block, and a similar distance to the southeast of its northwestern property. About 656 kilograms of Anuri kimberlite have been processed so far, and 937 diamonds have been recovered, using a cutoff of 0.15 millimetre, larger than the 0.10-millimetre screen used by Ashton. Included in that total are 337 macrodiamonds, of which 61 were two-dimensional macrodiamonds. Nine of the stones were large enough to remain on a one-millimetre screen, which was a rate of about 14 stones per tonne, which was the highest proportion of any of the Coronation kimberlites. That was encouraging, but even better was the fact that one of those stones was much larger than the others, weighing an impressive 0.75 carat. The two companies found a second kimberlite in the immediate vicinity. The Anuri East body was also significantly diamondiferous, although not quite to the same extent as its sister. If all goes well, Kennecott and Tahera could take a mini-bulk sample from Anuri later this spring. Although it will likely be the results of what could be several mini-bulk samples that will be the prime attraction for speculators, the hunt for new kimberlites is expected to account for the bulk of the work in the Coronation region. Kennecott and Tahera plan to drill about two dozen targets within 20 kilometres of Anuri, and Ashton and its partners will likely complete a considerable amount of drilling as well. As well, the main explorers will continue the hunt for suitable targets at the heads of indicator mineral trains will continue. Meanwhile, the recent arrivals will likely begin by conducting till sampling and additional preliminary programs, in the hopes of joining the fray later this year. One of those companies could be Consolidated Jaba, although it will first have to come up with the cash. The company had a working capital deficiency of about $175,000 at the end of September and it laid off most of its staff in Arizona as a result. The company recently completed a private placement that provided about $200,000, but more cash will be required to actually mount a significant exploration program on all of the new properties. Until then, the market seems to have adopted a wait-and-see attitude, as Jaba's shares closed unchanged Monday at 15 cents. (c) Copyright 2002 Canjex Publishing Ltd. canada-stockwatch.com Chucka Dual Play Diamonds and a 1996 Neil Maedel Subscriber: ""..//..that management group included Mr. Guilbert, who was a professor at the University of Arizona for many years, ..//.. He signed His GEOLOGY TEXTBOOK to me ..in hope of new discoveries...he was the GEOLOGIST of the Year in 1998...award//WORLD KNOWN and respected The GEOLOGY OF ORE DEPOSITs: Charles Parks and John Guilbert mywebpage.netscape.com mywebpage.netscape.com mywebpage.netscape.com PPS- Layered Mafics is what STILLWATER is in Montana... |
