₪ David Pescod's Late Edition January 29, 2008
ANDINA MINERALS (V-ADM) $4.76 -0.14
When you go to a big mining show like Joe Martin’s Cambridge House show in Vancouver, there is lots of information there and like the women’s knitting club, there is also lots of gossip.
One story starting to get attention in the mining community is Andina Minerals, and has it hit that spot in its history where some major decisions will be made/have to be made—and maybe by others.
Over the last two years, Carl Hansen and crew have developed the Volcan project high in the Chilean mountains. At 13,000 to 14,000 feet there is special needs for the employees and it’s also a low grade discovery, but there are other big mines just like it, not too far away.
Kinross has their Refugio mine and Yamana has the La Pepa and El Penon mines in the area. Andina is expected to report additional drilling results (they currently have close to seven drills turning) and also a new resource calculation within the month. The latest resource calculation suggested they are now close to 7 million ounces of gold in the area on what would be an absolutely enormous earth moving operation.
You would need to be an experienced operator to make good money in an operation like that. And while Andina might be good explorationists, building and operating a mine involve different skills, so who are the obvious takeover buyers and what kind of a price in this market would you be looking at?
When we gossip with several mining people, analysts and the like, most suggest the obvious buyers are Kinross or Yamana—looking to add to their inventory of significant gold plays, plus possibly even Teck, who is in the neighborhood (Lobo-Marte) and maybe even an Anglo Minerals, whose decision to concentrate on South Africa with its current shortage of electricity looking to suddenly be an embarrassing mistake and maybe this could provide them an opportunity for diversification.
As to price, we notice analysts have targets anywhere from as low as $5.75 and as high as $9.00, so maybe something in the middle might make sense. With lots of news and a major mining conference coming up in the next four to six weeks, we suspect this story is going to attract a lot more gossip and possibly something very real.
INTL. FRONTIER RES. (V-IFR) $0.75 +0.02
Well now I know who to blame for all this cold weather we’ve been having in Alberta the last few days, that has seen Calgary hit with a wind-chill of minus 50 and Edmonton close-by at minus 47. Blame it on Pat Boswell.
They’ve actually had some relatively warm weather up in the Northwest Territories so people like Boswell were hoping for cold, cold weather to make sure the ice roads they needed to build, plus the MacKenzie itself froze to move their drilling equipment so they can get to their Dahadinni and Keele River plays, both of which are going to be drilled this month. I’m glad this cold weather was good for some one.
The other tidbit of news for IFR is they along with partners Gulf Shores and Petro-Canada, after waiting more than two weeks, finally have some good weather and no 50-foot waves to contend with in the North Sea and have spudded their Maria play in the North Sea. For those who would like to see the IFR presentation, just e-mail Debbie at Debbie_lewis@canaccord.com.
AURELIAN RESOURCES (T-ARU) $7.99 -0.11
Aurelian reports some infill drilling results on its Fruta del Norte deposit which has about 13 million ounces of gold plus. Some pretty decent holes, such as 149 metres of 12.5 g/t gold; 119 metres of 8 g/t gold; 75 metres of 11 g/t gold and 51 metres of 10 g/t gold. You’d love to find that in your backyard and Michael Gray of Genuity Capital likes the results and suggests the drilling is overall positive with high-grade long intersections and calls Aurelian a speculative buy, suitable for risk-tolerant investors only, but gives it a $17.00 target which might appeal to your sense of greed.
Haywood’s Eric Zaunscherb has a different look at the same company and reports “Media outlets are reporting the seizure of hundreds of mining concessions owned by foreign and local companies alike. As ominous as it sounds, we believe that the seized concessions were those owned by parties that are delinquent in paying fees to the Government; this is understandable. An Aurelian representative is adamant that that Company’s concessions are intact and that negotiations on royalty and taxation rates are preceding well. A release clarifying their situation is expected.”
Zaunscherb has Aurelian as a speculative buy with a more modest target of $11.00.
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