Kaip on ADM; Haywood on PM prices [via Pescod]
e-mail: debbie_lewis@canaccord.com e-mail: david_pescod@canaccord.com January 16, 2007
ANDINA MINERALS (V-ADM) $3.00 +0.10
GBS GOLD (T-GBS) $3.46 -0.14
Andrew Kaip, the Haywood mining analyst from Toronto is back and suggests that he’s “functioning normally now”.
He spent most of last week hiking to areas of the Andes at 14,000 feet and at that kind of height, you just don’t function
normally. He suggests you get a little light-headed and if you don’t watch yourself...well, it’s not just men that have difficulty at that height, he says it is equipment too. If you are hoping to see a mine built at that kind of elevation, Kaip says you “have to adjust to it.”
He points out that there are two mines at that height, one right in the area being Bema Gold’s Refugio Mine, but also the La Coipa Mine owned by Kinross and Goldcorp is also at that kind of height.
We are glad Kaip is back from checking out this project because Andina Minerals and their Volcan project in Chile that is at 14,000 feet is his pick in answering, “if I could only buy one stock for the coming year, this would be it”. Kaip tells us that there is an experienced management team (ex-TVX personnel) running this project that has so far come up with about 2.6 million ounces of gold that’s considered a “resource” at this time and they hope the current drilling program is able to push it up closer to 5 million ounces, which might support 4 million ounces in a more solid reserve calculation.
It is a lower grade project, but with pretty good intercepts.
So far these rather large numbers Kaip suggests, are supported
by one zone. On their $10 million exploration program they are currently working on, they will shortly be starting to drill a second zone and Kaip suggests that if the other zone hits, you just might be looking at “an elephant type discovery.”
As it sits now, he has a published target of $4.30 for Andina, but he suggests “based on ongoing drilling, that target is going to have to be flexible” and once again, if he could only buy one story, this would be it for the year.
Now if you are betting on a precious metal stock, it would help to have an idea what next for precious metal prices. Kaip and the team at Haywood have definitely entered the bullish camp. A recent report they put out suggests that they believe gold will average $700 an ounce this year which makes them amongst the more bullish on the street. They believe it is based upon the American dollar sooner or later doing a swan dive.
Andina Minerals
www.andinaminerals.com
www.gbsgold.com
As far as silver, they expect it to track gold for the first half of the year, but as significant silver production comes on stream in the second half of the year, silver could easily weaken in comparison to gold.
It’s funny when we ask the question, “if you could only buy one stock for the coming year” no one ever stops at just one...and Kaip joins the crowd as he suggests another great story is GBS Gold. It’s one to watch and he has a published target on that story of $5.45.
Meanwhile, one look at the Andina chart tells you that this has been one of the better stories to have participated in the past year and now that we are a shareholder, we hope Kaip is right and is one of the better stories for the coming year.
One thing interesting about the Andina story is that most of the retail investors have simply not heard of it. It is dominated by institutional investors that are quite aware of the past efforts of the TVX crowd. I suspect this will change over time and other analysts will sooner or later discover it.
One thing Kaip suggests is that if they are able to get close to the 5 million ounce category, this story becomes (to him) an obvious potential take-over story. |
