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Gold and Goldmines! (Again?)
Canada's Silverado: Hottest Gold Stock?
Some experts alarmed over PR hype, contradictions and skyrocketing values!
By Sherrie Gossett © 2003 WorldNetDaily.com
With its stock rocketing up over 750 percent in a year, Silverado Gold Mines stands out in a market plagued by continued corporate financial scandals and stock market volatility. With gold recently nearing a six-year high and investors looking for a solid buy, gold is becoming an ever more attractive option. Add to this the company's announcement that David Tice of the Prudent Bear Fund is an investor, and there's a definite buzz surrounding Silverado – a buzz WorldNetDaily decided deserved a closer look.
Silverado Gold Mines Ltd. (OTCBB: SLGLF) is a 1964-chartered company which began SEC reporting in 1978, under SEC regulations that require companies that have 50 percent or more of their shareholders or properties in the U.S., to report. The company, through its wholly owned subsidiary, Silverado Green Fuel Inc., has owned and operated various gold properties in Alaska. In addition, Silverado Green Fuel Inc. is involved in creating what the company describes as "the world's first low-cost, environmentally friendly fuel made from coal as a replacement to heavy oil."
Silverado also began trading July 26, 2002, on the Berlin stock exchange with the ticker symbol "SLG" and the German security number (WKN) 867737. Currently the company's gold-mining activities are focused on its Nolan mine, the company's only mine in operation.
The Nolan Gold Project consists of five contiguous properties covering approximately six square miles, eight miles west of Wiseman, and 175 miles north of Fairbanks, Alaska, in the foothills of the Brooks Range, in an area known as the Koyukuk Mining District.
Nolan Mine
The company says it expects to yield $19.7 million in net revenues over the next three years from the Nolan Mine. "We anticipate generating $7.5 million in revenues net to the company in this year alone," CEO Garry Anselmo announced in November.
Silverado's predictions are intriguing, considering that the company’s most recent 10Q filing (a quarterly report required by the Securities and Exchange Commission) shows $997 in gold sales for the nine months ended Aug. 31, 2002, and gold inventory at $10,169. For the same period the previous year, gold sales were at $1,786 and gold inventory at $11,140.
One stock analyst, who declined to be named, raised doubt over Silverado's November 2002 prediction of $7.5 million in gold sales "this year." SEC filings indicate processing of gold taken from the Nolan mines won't commence until spring of 2003, and gold sales commence in summer of 2003. Silverado's Anselmo explained to WND that the term "this year" really refers to a one-year period beginning November 2002.
According to SEC filings, The Company's total proven and probable gold reserves (in Troy ounces) from all its Alaskan properties are as follows: proven-111,298 ounces; probable-329,616 ounces.
However only the Nolan mine is currently in operation. The Nolan mine lists 11,802 ounces in proven reserves, and 48,262 in probable reserves, for just over 60,000 ounces in both proven and probable reserves combined.
However, in paid "advertorials," including one which appeared in the Bull & Bear Financial Report, the company stated, "Although the Nolan mine has proven and probable reserves of 141,000 oz./au, additional potential reserves have been identified and await drill analysis. … In addition the company has indicated reserves totaling one million oz./au."
Even though Nolan is the company's only operational mine, the advertorial went on to state: "The Ester Dome, Eagle Creek and Marshall Dome properties contain about 900,000 ounces of gold valued at about $300 million," concluding, "Silverado is targeting global gold purchasers in this rising market."
However, the company's most recent 10-KSB filed with the SEC on March 15, 2002, indicates that the company has "no planned activity" on the Ester Dome Project (which includes the mentioned Eagle Creek and Marshall Dome properties), "except for maintenance." Both Marshall Dome and Eagle Creek are listed as "undeveloped" and do not "contain any open-pit or underground mines." In addition, "There is no mining plant or equipment" located on either property. And "currently" there is "no power supply" to either Eagle Creek or Marshall Dome.
The SEC report states, "No reserves are included at this time for the Eagle Creek property," adding it "does not have any proven mineral reserves."
The Grant Mine's mill and equipment, also part of the Ester Dome Project, are listed in "operating condition, but are not currently operating." The Ester Dome has proven reserves of 99,496 ounces, and probable reserves of 286,354 ounces of gold, but the company adds it is "minimizing work on this property to maintenance," in order to concentrate on Nolan.
In addition, the company's most recent 10Q states: "The Company also plans to option to third parties the Ester Dome and Marshall Dome properties."
The advertorial also mentioned the Smith Creek property (part of the Nolan Gold project), referring to "advanced exploration and development." But according the company's latest 10KSB filing: "Currently, the Company has no mining activity on the Smith Creek except for its required Federal mining claims payments."
In a paid advertorial appearing in the Nov. 2, 2002. edition of the Bull & Bear Financial Report, the company said it is basing its revenue projections on "assay results from previous drilling programs," adding: "However there is a good chance revenues could be even higher."
In a taped interview, WorldNetDaily asked CEO Anselmo whether Silverado performs its own assaying. "Oh no, we use an independent lab," Anselmo told WND, "typically ChemEx lab, and so all our assays go outside." |
