₪ David Pescod's Late Edition Tuesday August 22, 2006
AURELIAN RESOURCES (V-ARU) $22.76 +0.86
The run we had in the junior mining sector for 12 to 18 months, up to March of this year, was simply spectacular and it seemed like everyone with a hope, participated. Then of course, reality hit and the correction was more than a lot of us expected. It was an owie!
What has followed since has best been described as the “summer doldrums” and one person who has been able to take advantage of that has been Canaccord mining analyst Graeme Currie, who is often accused by wife and family of never being able to leave the market, so he took a month off, which is a first for him taking advantage of this quiet time, but now he is back at work. When we ask him what looks great, he has eyes for one girl and that girl is called Aurelian Resources.
He points to the size, “it’s 800 meters by 100 meters and the tonnage is building quickly” he suggests and as far as thickness on some of the drilling results, if you are used to seeing five meters of 1/2 ounce here, or ten meters of a nice intercept there, the drilling that Aurelian is coming up with on their Condor Project in Ecuador is simply amazing. “One hundred, 200 meter intercepts builds tonnage quickly”, he suggests and with an 800 meter by 100 meter body being defined, tonnage is building quickly.
Currie was one of the first analysts to cover this story and he has certainly been rewarded and now he has had to do that awful thing of raising his target once again to $40.00, and he suspects there’s going to be lots more to come as so far only 20 to 25 holes have been drilled into the project. He expects four rigs to be working on the project starting in September and there will be a whole bunch more information coming out after that happens.
One date coming up though that he suggests we should be aware of is on Monday of next week. Seven million shares from the recent private placement become free trading and I suspect more than a few of those good folks are going to want to take advantage of these lofty prices.
So what next for the market? Currie suggests that he is looking forward to a better market for the junior mining sector for this coming fall and winter. Not a repeat of the boom times of 2005/2006 though, and a person is going to have to be more selective.
He says, “this is the time to start looking for charts to find those good exploration shots where the charts are bottoming or base-building and with some good news or some item out of the company that could catch the markets fancy, one could benefit from it”.
He hopes to have a couple more ideas for us in the coming week on junior mining stocks that have stock prices more suited to a “working man’s portfolio”, so we look forward to that. In the meantime, it will be interesting to see Aurelian’s action with seven million shares coming out.
GABRIEL RESOURCES (T-GBU) $3.65 +0.35
In a story today reported by Agence France-Presse, the headline read “Angry villagers protest Canadian company’s plan for gold mine in Romania”.
In the article, it made such comments as, “Hundreds of experts and local residents clashed in a debate yesterday over a Canadian project to open a gold mine in the Rosia Montana region of central Romania.
The public debate, a first in Romania, was organized by Gabriel Resources”.
According to the story, residents of the village shouted such slogans as “Cyanide water is not good” and “Shame on you” during the debate, while representatives of the firm listed the advantages of using cyanide in extracting metals.
The article ends with “the project would require the destruction of half the village and force the relocation of about 2000 people”. Well yes, some of that is true, but we’ve learned over the years never to take anything you read in the public press as gospel. While we have never been to this area of Romania, we’ve been told by enough people that what you see in the area, is an example of what mining shouldn’t be and one best remember that this area has a mining history of almost 2000 years, going back to Roman times and it is an example to many, what uncontrolled mining can do to the environment.
Obviously these days, mining companies look to set a stellar example to maintain good reputations if they ever hope to do additional projects elsewhere in the world.
When we talk to Gabriel P.R. director, Kathy Sipos, she tells us that this is the 12th of 14 public meetings the company has organized and that yes, there was about 500 people at the meeting, but 200 people from the town were at the meeting in support of the project—seven were against it.
One can understand why there is support in the project, as this area with its mining history, now faces unemployment of 70% and it’s a very poor area of the country. Sipos tells us that most of the homes in the area still use wood stoves that have to heat houses in 40 below weather and most houses still use outside toilet facilities. And some kids actually have to share their shoes.
As we’ve mentioned, this is not one of the richest areas of the world. Jobs would be incredibly welcome. It is true, to build a mine, there would be definite changes to the village, as the potential mine is under a good chunk of the village. We suspect with so many safeguards built into mining these days, people of the area could probably benefit from the project. |
