₪ David Pescod's Late Edition November 30, 2006
RED DRAGON RESOURCES (V-DRA) $1.50 +0.10
Another pretty decent day on the junior mining market as
suddenly we are having more days with green on the screen.
Meanwhile, there are some commodities definitely going the
right way again, such as gold, silver, oil and even natural
gas has had a few decent days, but if there’s one commodity
that seems to be flying like the eagle these days, it’s zinc.
While most people have a rough idea of the price of oil,
gold and silver might be at, at any given time, the average
punter is absolutely lost as to where zinc might be. Look at
chart to the left and you’ll know it’s been flying. If you want
to talk to someone who’s about as bullish on zinc as you can
get, we present Alvin Jackson.
He is predicting by the first quarter of next year, $2.50 a
pound for zinc—a commodity that he suggests can’t be replaced
for its use, which is galvanizing steel. He points to
the big demand world-wide and in particular, China and with
no potential replacements…The chart shows you just how
far zinc has gone.
He also points to inventory levels which continue to drop
ever lower and as we’ve noted in past issues, even some
producers in Australia may (in a few years) be running low
on supplies. We caught up with Alvin Jackson today for
other reasons, as we continue our ongoing search for stories
that need to be followed.
Jackson was the President and COO for many years of
EuroZinc (EZM), which has been one of the most successful
mining companies over the last couple of years. “It took us
ten years to get it going” he suggests “and then we are an
overnight success!” Needless to say, those ten years included
many years that were pretty lean.
He left EuroZinc just over a year ago to do a little more
concentration on his first love, which is exploration, but in
the meantime, he has also been on board of another success
story in a big way. We’ve mentioned Aquila Resources
(AQA) a couple of times over the last while and we profited
nicely from that exposure, as the stock doubled quickly.
Guess who is a director of that company? You got it! Alvin
Jackson…“Mr. Zinc!”
What we find interesting about Jackson now is his latest
company Red Dragon Resources and what they are working
on. It’s major assets are in China. A gold project, the Lianoning,
and a project he maintains is currently in a relatively
raw stage, but the project he has the most hope for is
the Yunnan Weixi lead/zinc project.
Our concern is China, as we ask him, “Can you please
give us the names of a company that has gone over there,
has been able to get the paperwork done, find something
and actually benefit from it?”
He admits that “Yes, over the past 10 years, China is
pretty new to the mining in the Capitalist game and there
have been troubles.” He suggests “there were several
companies that were burned 5 and 10 years ago, but now
things are much better and most of the big mining companies
are back in China”.
A look at their three major projects. They’ve been drilling
their Liaoning gold project for the last couple of
months and currently have about 20 to 22 holes in the lab,
and like mining companies world-wide these days, you
are facing long delays in the lab. So far they have results
like one hole of 30 meters of 3 g/t gold and 60 grams silver,
but until they have more results under their belt and
know what they’ve found and where, drilling on this project
stops shortly.
Then things get exciting for his baby, the Yunnan
Weixi zinc project, which he figures could be a company
maker. “It’s very raw, counting on a lot of surface sampling,
but there is lots of exposure and the grab samples
of 9% to 10% zinc and 5% lead and one ounce silver,
whets one’s appetite.
Where it is exposed, Jackson suggests it goes for over
700 meters and then goes under the overburden and then
extends again for a significant period. There are considerable
widths on this as well—50 to 100 meters. So if the
grades are there, he suggests, “there could be substantial
tonnage quickly.”
“The drills will be turning in a couple of weeks” he
suggests and I suspect at that time, there will be more
than a few who follow zinc, tapping into this story.
There is a third story that Red Dragon is involved in
back in North American in probably the hottest game of
the day, if not the over-heated game of the day...uranium
exploration. They have about 450,000 acres on the Alberta
side of the Athabasca basin called the Rea Uranium
Project and the drills turn starting February.
One million dollars has already been spent by their
partner on airborne and geophysics, but once again,
when the drills turn, is when things get interesting.
Meanwhile, we ask Jackson the question we ask of all
mining companies, if he could only buy one junior story
these days and it can’t be one you are a director of or
have any conflicts with and of course we prefer a double,
and we are fearless of risk…...what would it be?
Gemcom (GCM) is his answer and it’s not a mining
company but actually a software company. With their
need to computerize information, data, structure of mines
and all related information, Jackson suggests that they
are becoming one of the major suppliers of software to
mines and the mining community around the world.
SOUTHWESTERN RES. (T-SWG) $8.47 +0.86
And speaking of China….Southwestern Resources has seen
its stock clobbered like that of many of the other gold explorers
since gold peaked way back in the good old days of
May. But now that gold seems to be lifting off again, this
sector is again attracting interest and big volume.
Southwestern Resources was one of those explorers in
China that was having trouble coming up with drilling results
on a regular basis and some of their more recent results
were more than a little disappointing. But today, they
come up with some numbers that aren’t confusing the market
at all—they are pretty darn good!
How about 13.4 meters of 7.3 grams per tonne gold, 22
meters of 3.1 grams per tonne gold and 14 meters of 4.9
grams per tonne gold. Not a bad way to start the day.
To create more attention in the market today, market
mining money-manager John Embry on ROB-TV picks it as
his number one pick. Yes, that does give the stock a bit of
a boost.
To see Embry on ROB-TV, go to www.robtv.com and
click on “watch past videos—Thursday at 12:00 PM ET.
Meanwhile, Southwestern has five...count ‘em, five drills
turning on their Boka Project.
If you would like to receive the Late Edition, email Debbie at debbie_lewis@canaccord.com |
