Please allow me to share some Sunday spam with everyone...
My top pick over the next 3-6 months is a small base/precious metals exploration company called Capstone Gold (T.CSG), operating in Mexico. The company has enjoyed a nice run so over the last couple months, nearly doubling off the lows, but I consider it undervalued still. They have 5 past producing properties with a 90% interest in each, all having substantial resources identified to date (although not compliant with the NI 43-101 standards). The top prospect however has nearly 6 million tons of polymetallic ore grading about 8 g/t gold equivalent. With two drills turning as I write this, they are working to prove up the existing resource and increase the known deposit both laterally and at depth. Results are pending for the assays, but my personal outlook is that they will double the existing resource. The property hosts a modern mill and recovery plant, and the rehabilitation of the existing mine workings could be completed as early as Dec '04.
I do not think CSG will ever take this property into production. They will either vend it as a turn-key production option bearing high-grade ore to a major, or they will be taken out. I estimate this could happen before the end of the year, but I would be very surprised if it did not happen within 6 months.
I estimate the value of the company as it stands right now to be in excess of $5 per share based on existing infrastructure, asset value of the resource base, and the cash position in the treasury. I have a report available on my website for anyone choosing to read it. And for full disclosure it is the second largest holding in my PF, and I have been buying more shares almost every week since the 48 cent level.
cheers!
COACH247 |
