₪ David Pescod's Late Edition January 8, 2008
Latin American Minerals (SGX) 0.920¢ -0.030¢
Pele Island (GEM) 0.500¢ -0.020¢
StrataGold (SGV) 0.1850¢ -0.0100¢
Falling out of bed like so many other junior stocks in the correction of the last quarter of this past year Latin America has popped back dramatically particularly with the shows on its webpage of the visible gold they have discovered on their Yobai gold project in Paraguay. Just a few days ago they announced some drilling results but David Wahl the president of Latin America tells us that the market has not yet caught on to the fact that those results came from an area that did not contain the visible gold. He points out that the visible gold came over a narrow range and Wahl did remind us that sometimes visible gold can be quite misleading but the average guy looking at those pictures can probably be excused for getting a little bit excited.
What they have now though is very much open to debate as one source we talked to suggests that with the project that looks like it is 5000 meters long and if it’s 5 meters wide and if it’s 200 meters deep (but all quite possible) he suggests they could already have big tonnage but what is the grade? To come up with numbers like that at this stage in their exploration program is way ahead and in reality could be nothing more than dreaming in Technicolor but Wahl suggests they should start getting results back from the drilling that came up with the sweet looking stuff within two weeks.
Six holes are currently in for assays and he would hope to have two holes announced every two weeks over the next while. (Ironically – most people were previously watching LAT for their zinc play not their gold play and were disappointed that drilling on that project scheduled for September didn’t happen). The zinc project is expected to be drilled sometime in the coming weeks.
David Wahl does advise a couple of funds as to junior companies that they should be investing in so we asked Wahl to pick some stories that our followers should be aware of and he was most obliging. He says he’s good at it, we’ll see ... Needless to say he is a big believer in management teams as the place to start and all three of his picks Sage Gold, Pele Island, and StrataGold he feels have topnotch management. StrataGold is involved in the Dublin Gulch projects in the Yukon which has already got about 66 million tons but the grade is relatively low. Pele Island is a uranium play and Wahl is a big believer that uranium prices are going to remain high and he points to things as the greening of France, his belief that Cameco will be many many years before their water problems are taken care of and places as diverse as Ontario and China becoming ever bigger users of uranium. With that in mind, Pele is his pick for uranium as he points to the immense landholdings in the Elliot lake area and their recent scoping study.
If he could only buy one it would be Sage Gold for their copper, nickel and gold assets in the Geraldton area of Ontario. Pretend you are an analyst and what would be your target on Sage we asked him, he responded “A dollar is the number we came up with” and we responded “well that’s not going to change a person’s lifestyle…” he simply answered “well if you own enough of it, it might.” He also reminds us of the old game if you’re looking at Canadian mining exploration plays in the winter when there is little work going on and prices are low, the expectations that with the coming exploration season in the summer things will have heated up by then. We’ll see and just in case he’s right we picked up a few Sage.
Andina (ADM) $4.700 +0.150¢
Nord Resources (NRDS) $1.25
It’s so unsophisticated to whine or have one of those tones in your voice that gives you away that you are complaining about the state of the market. It’s just plain showing a lack of maturity.
Sure the big guys, the Goldcorps, the Kinross’s, the Barricks are hitting new highs…but the little guys! But with gold hitting all-time highs and so many junior golds doing sweet tweet and many having lost 50% in the last quarter we figure that just a tad of whining would be justified.
So we go to someone for a little hand-holding on all of this, looking for a little explanation and he says quite simply “the key is volume...it’s just a matter of time this person believes but volume is key, after all there are many junior mining stocks out there and there’s a huge float so to take it a level higher you are going to need a lot of buying.” He figures that when we see volume on Vancouver backed up to the 250-270 million a day level that will float the general sector of the market higher again in a sign that people still do care, which of course gets us to Carl Hansen, president of Andina minerals.
If there isn’t a better example of hey, how come the Volcan Project in Chile getting ever closer to their 5 million ounces of gold, how come this stock isn’t doing much better?
We catch up with Hansen who still thinks he can play hockey but learned recently what happens when you play a young man’s game. A full break on his leg means that one leg which had to be operated is now full of metal, not gold mind you but pretty strong stuff anyway.
Andina was in the news last week because they have done something pretty significant if you ever want to become a gold producer in Chile. High in the Atacama desert water is one of the most precious components you can find and as you can figure rare in the desert but absolutely necessary if you want to do some gold production.
Andina announced an agreement to purchase 340 m/l of water near it’s Volcan project for the issuance of 6.7 million shares. Hansen tells us that the price of the water in Chile has been rising with some recent transactions in the order of $125,000 per liter per second, Andina he says paid somewhere between $90,000-$95,000 per liter per second. Once again they have now locked up another key component to bring them closer to production. Hansen mentions that they currently have 6 rigs drilling on their property to ever increase reserves.
He responds to our questions about the rumors that Andina down the road expects to see a takeover offer he says “We continue to build a company and if we do receive offers, needless to say we will examine them.” In the meantime he suggests there will be drilling results out later today.
Now getting to the stock picking for this time of the year when we ask some of our favorite folks their picks for the coming year we remind folks that Hansen’s ability as a mine finder is excellent but his track record as a stock picker is ... well ... He says it’s excellent...as long as you’ve sold on your own at the right time, if you get the drift.
Anyways at this time his pick for the coming year is Nord Resources which he describes as an up and comer copper producer with 100% interest in the Johnson Camp SX-EX copper project in Arizona. They have begun residual leaching in some old pads and expects to produce 12 million pounds of copper during ‘08 from residual leaching and annualized production should be increased to 25 million pounds of copper in ‘09. At $2.45 copper he suggests the project has nearly an 80% rate of return with a payback of less than 2 years. Currently the stock trades on the pink sheets he says but is in the process of listing in Canada. With only 35 million shares outstanding he suggests it’s his pick for the coming year. Meanwhile back to Andina, Steve Butler of Canaccord has updated his look at Andina and he has a target of $9.00 which admittedly is one of the most aggressive amongst the other analysts. In the meantime we will start watching those volume levels again on the resource exchanges. And if you would like a copy of the report please e-mail Debbie.
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