Buying Gold Resources for $ 10 ounce in the ground
Company: TYHEE DEVELOPMENT CORP F
Tyhee means “trophy fish” in Chinese.
$ .27 US per share or $ .30 CDN per share Market Cap $ 26 million USD Tiny market cap.
Tyhee’s gold is valued at less than $ 7.78 ounce, the lowest among 44 junior gold mining companies reviewed by Canaccord. The average gold value for the 44 junior gold mining companies was $ 63.62 per ounce. Tyhee’s market price would have to rise ($ 62.63 average / $ 7.78 Tyhee) 8.05 times to equal the average valuation of the 44 junior gold mining companies.
Jim Puplava’s formula for success in investing in junior mining companies (these companies are selling for big discounts): 1) Focus on safe political environments (i.e. U.S. Canada) 2) Focus on companies exploring prior abandoned producing mines (less risk than exploration company since was prior producer—rise in metal prices can make these deposits very economic--can say they used to PRODUCE gold or silver here !!) 3) Focus on late stage development companies (i.e. prefeasibility –their metals in the ground are given higher valuation in the marketplace) 4) Company is working on dual track: doing prefeasibility on one area so they can go to banks for financing and get into production and at same time expanding their discoveries (expand and build resources/reserves). Tyhee meets all the above.
Selling at 20% discount from its high for the last 52 weeks.
Symbol in Canada is TDC US symbol TYHJF
Background Theme: In the 1980’s a student seeking his doctorate in physical geology does his thesis on a orebody mineralization (gold) that had produced over 1 million ounces of gold (Conn Mines). He becomes the foremost expert on the geology of the area. He discovered what he believes vast untapped potential during his thesis work.
Fast forward to year 2000, the same person, now a Ph.d and CEO of a public mining company has the opportunity to purchase 100% of the same type of mineralized (he is the foremost authority on it) orebody for a song because gold is depressed at $ 256 ounce in November, 2000. He is successful and closes the transaction January, 2001 paying little. The CEO, David R. Webb, B.A.Sc. (Engineering) M.Sc., Ph.D., P.Geol., President & CEO, Director, can now build his own company and exploit the resource he saw some twenty years ago. The orebody is the Yellowknife Gold Project. It is a past producer of 1,023,575 ounces of gold from 1,018,786 tons of ore (that is about one ounce per ton !!!! and that was an underground mine that has been abandoned). The mine was closed down in 1969 after a fire at the mine’s mill.. A 100% interest in the 1,859 acre property, subject to a variable NSR was purchased from GMD Resource Corp in early 2001 for $265,000 (January 12, NR. Series 2, Release 13). In addition, resources total 1,049,000 ounces of Measured and Indicated gold grading 9.01 grams per tonne and 426,000 ounces of Inferred gold grading 8.01 grams gold per tonne. Dr. Webb literally stole the property paying essentially nothing.
Some interesting facts:
1) Most recent financing in February 2006 was split in half and completed by Sprott Capital (http://www.sprott.com/metal.php) and Jim Puplava’s entities (http://www.puplava.com/brochure/resume.htm) Eric Sprott runs Sprott Capital and is one of the best value investors in the world ( tinyurl.com. See Sprott capital: sprott.com Both sent their geologists to perform due diligence before they completed their private placement.
2) The former CFO of market cap $ 4.6 BILLION Glamis Gold (NYSE symbol: GLG finance.yahoo.com is the CFO of this $ 26 million small company. Why? It is because this company has enormous upside potential?
3) Institutions control 80% of stock, management 10% and remainder is free trading.
4) No country risk with this resource. Regulators in area have NEVER turned down a properly documented mining operation. NEVER.
5) This property was acquired because an old PRODUCING mine which had been selectively mined to produce over 1 million ounces of gold (ONE OUNCE per ton !!) was abandoned after a 1969 fire destroyed the mine mill and because of meager gold prices was never rebuilt. The mine had enormous “blue sky” potential (open at depth and on both sides) which is only now being exploited. Resources total 1,049,000 ounces of Measured and Indicated gold grading 9.01 grams per tonne and 426,000 ounces of Inferred gold grading 8.01 grams gold per tonne. If these resources are moved up to reserves they would be valued at approximately $ 250 per ounce. There is a strong likelihood that these gold resources will expand substantially under the current drilling program. Stock has enormous upside potential IMHO.
6) In the March 21, 2006 Press Release Dave Webb, President and CEO reports that “We are working to increase our gold resource in step out drilling this year. The drilling results reported today have demonstrated that the Ormsby Extension Zone is well mineralized, and may add significantly to the resource reported for the property. We expect the Discovery Volcanic Member, a mineralized unit that hosts the past producing West Zone to return results similar to what we have found in the Ormsby Zone. The second drill mobilized on site will focus exclusively on the Discovery Volcanic Member area, which if confirmed to be mineralized will effectively double the area under consideration for gold resources.” A revised resource estimate is being prepared and will be used by Micon International to complete a prefeasibility study.
7) In the March 23, 2006 Press Release Dave Webb, Tyhee’s president and CEO stated “Tyhee plans an expanded exploration effort, to follow up on the exceptional results released earlier this week. We reported that every one of our step-out drillholes on the Ormsby Zone intersected significant gold mineralization, over a 300 metre strike length, a very enviable success rate in any exploration program.” Note that all present Tyhee drill holes have stopped drilling in gold mineralized rock.
8)Permits have been submitted to get mine back into production.
9) In the Febuary 9, 2006 Press Release Tyhee Development Corp. (TSX Venture: TDC) met with Micon for an update in the progress of a revised resource estimate for the Ormsby Zone of the Yellowknife Gold Project. Micon has informed Tyhee that they have produced draft resource models for the entire Ormsby Zone and for portions of the Ormsby Zone based on the all the diamond drillhole assays. None of these models adequately identify the mineralized zones as exposed in the underground workings. Tyhee defined several zones in detail and subdrifted on two of them, extracting a 6,800 tonne bulk sample in 2005. The bulk sample was found, based on 816 fire assays collected during mining, to average two times the grade estimated in the resource model. Additional work, recommended by Micon, currently in progress by Tyhee will further refine the resource estimate. The prefeasibility study will continue once this resource estimate is completed. (Note: TWO TIMES THE GRADE ESTIMATE)
How undervalued is Tyhee Development Corporation?
On pages 15-16 of the Canaccord Junior Mining Weekly dated April 3, 2006 forty-four junior gold companies are compared.
The average Market Cap divided by total gold ounces in resource for the 44 companies is $ 63.62 per ounce.
Tyhee Market Cap dividend by total gold ounces in resource is only $ 7.78, the lowest of all 44 companies!!
Tyhee would have to appreciate 8 times its current market price to be valued as the other 44 companies.
Company website:
tyhee.com
Extremely strong management team:
tyhee.com
Financial Information:
tyhee.com
Resource Defined:
tyhee.com
Technical Reports:
tyhee.com
Recent share capital: Shares outstanding-- 57,718,552 Fully Diluted 82,546,454
tyhee.com
Canadian Quote:
stockhouse.ca
U.S. Quote:
stockhouse.ca
Discussed:
stockhouse.com
TYHEE DEVELOPMENT CORP
Suite 401, 675 West Hastings Street
Vancouver BC Canada V6B 1N2
Phone:604 681-2877
Toll Free:1-866-681-2877
Fax:604 681-2879
About Tyhee Development Corp.
Tyhee Development Corp. is a gold exploration and development company. Its primary asset is the advanced-stage Yellowknife Gold Project, which consists of 6,625 hectares (15,481 acres) of mining leases located 90 km (56 miles) north of Yellowknife, NT, Canada. The property hosts several areas of gold mineralization, including the partially developed Nicholas Lake Gold Deposit, the Ormsby Zone and the West Zone. Resources total 1,049,000 ounces of Measured and Indicated gold grading 9.01 grams per tonne and 426,000 ounces of Inferred gold grading 8.01 grams gold per tonne as disclosed on SEDAR (February 21, 2005) and on our website. As previously reported on SEDAR, (March 22, 2005) permit applications have been submitted and the project is currently under review by the Mackenzie Valley Environmental Impact Review Board.
Posts in stockhouse:
stockhouse.ca
"There is lots of gold there. The previous mine high graded the property. Then the mill burned down in the forties, and the property sat dormant. If there was a mill there they would have kept mining and today it would be very profitable to re-process the leftover tailings. And the drill results all come back looking feasible. I think there is going to be a mine."
He figured David and the gang want to make a mine of it, and that is why they are not pushing/pumping the story or selling out. My impression was that David Webb and the gang have worked for mines for their whole lives, and this is there chance to have one of their own...and it could be a good one IMHO.
Another Stockhouse post:
stockhouse.ca
Yellowknife Gold Project contains a MINIMUM of 4 million ounces with the likelyhood of expanding this number higher still” END
My note: if valued today at $ 250 ounce that is $ 1 billion of market cap if get to reserve status !!!
Another Stockhouse post:
stockhouse.ca
It is hard to imagine a real company with less than 100m OS approaching the commencement of mining a potential $2 billion deposit trading at .20 for very long - ridiculous really. Just my opinion. Good luck longs. D
Another Stockhouse post-“Rodger” is Roger R. Sylvestre, director and vice president of Tyhee:
stockhouse.ca
Hard not to like this play. I met up with Rodger at PDAC. I think it was Rodger anyways... French accent. Reminded me of one of those ol' time prospectors. Full of exuberance and excitement over TDC. Of all the companies I looked at, at pdac, this was the one that excited me the most.
I am impressed with the management. David Webb is perhaps the formost expert on the geology of the YK area. Looks very good and I have to feel the risk/reward very favorable. Still the ground floor, in my opinion.
Another Stockhouse post--David is CEO:
stockhouse.ca
Hi Kitty. I spoke with David today. There is much excitement building now from various sources. Puplava group is behind us now 100%. Lots of buzz surrounding other investment groups coming in.
Latest round of drilling hit significant mineralization in every hole. more drill results expected by end of next week.
Open pit model for initial mining of near surface deposits is being looked at and frankly I am very happy about that. Grades with a cut-off of 1.5g/t are being considered as viable.
Ormsby extension is proving to be saturated with mineralization and it looks like our resource estimate will be considerably larger as this recent drilling campaign will be included.
2 drills are turning and they are drilling at an incredible rate - 400 plus metres per/day!
The Discovery volcanic member is next to be probed and it is expected to add at least another 200,000 ounces to the Pre-Fease resource estimate. Pre-feasibility is coming. Many delays with resource modeling but we are nearly there. We should see the first resource figures as early as 2nd or 3rd week in April with Pre fease to follow shortly thereafter.
Another Stockhouse post:
stockhouse.ca
I talk to David Webb frequently, have met with him and his colleagues at their offices and seen the body of work they have done. It is immense and very impressive. These guys are very serious about their work. They are thoroughly professional and highly esteemed in the mining industry. We are talking REAL miners and geologists here NOT just promoters. In my opinion the Yellowknife gold project will certainly become a producing mine.
Jim Puplava
When he says "We found our next 2 Kimbers" he is referring to the fact that he owns 5.5 million shares of Kimber Resources: stockhouse.com Now traded on American Stock Exchange.
One of the two he found like "Kimber" is TDC !!!
TRANSCRIPT FROM JIM PUPLAVA FINANCIAL SENSE NEWSHOUR THE BIG PICTURE
MARCH 25, 2006
“We’re involved with a couple of companies right now that have made 2 or 3 major discoveries, they’re heading towards pre-feasibility but they’re in a position now because of these new gold discoveries that they’re going to double and triple their resources.”
“Two of the companies that we’re buying lately, we started buying them at $6 gold in the ground, we’re still buying it today at $9 and $10 in the ground, and in just a short while one company’s going to go into reserves where they’ll be worth over $100.”
Thyee Development Corporation is one the above.
financialsense.com
Growing Ounces: A Closer Look at Junior Gold/Silver Stocks
Above is to assist your due diligence. Call the Company and do your homework !
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