₪ David Pescod's Late Edition March 27, 2008
SERENGETI RESOURCES (V-SIR) $1.50 +0.12
HATHOR EXPLORATIONS (V-HAT) $2.51 -0.10
ANDINA MINERALS (V-ADM) $3.70 n/c
While commodity prices for most metals remain robust, the junior mining sector has been affected by the shenanigans on Wall Street. Most juniors have seen their share prices hit by the general world sell off in just about everything — whether they deserve it or not.
One big concern for the juniors is their ability to raise money in this environment and under what terms as one thing the juniors always need is capital, to find out what’s over the next hill and I suspect that access is a lot tougher now. Also standing out in the field of thousands of juniors is just going to get tougher and tougher. They are going to have to have a great story these days to raise more money in this environment.
Having said that, yesterday a few companies announced results that showed people still care about this sector, big time. The two year chart on Serengeti Resources shows that it has had its ups and downs in the past few years and part of its problem/opportunity now might be where it is. While miners are searching the world for ore deposits, one thing we’ve learned through the NovaGold experience and others is that in northeastern British Columbia costs to do just about anything are high. Maybe exorbitant is the correct word.
On the other hand, the drilling results on their winter drilling program are super. How about a supergene-enriched copper/gold mineralization grading 1.06% copper and 1.09 g/t gold over a massive 383 metres? The company says, “This has significant implications for the tonnage potential of this high grade zone.” That might be an understatement. The company yesterday traded an amazing 8,918,992 shares.
Also lighting up the boards yesterday was Hathor Explorations, a junior uranium explorer (and let’s face it folks, if it weren’t for Hathor, the uranium sector has got to be considered near-death). They announced gamma ray scintillometer results on their tiny, but strategically located Midwest Northeast Property in Saskatchewan. The company has decided to rename the zone they are working on, the Roughriders zone, obviously pandering to a local and poor-quality football team.
Scintillometer results shouldn’t be confused with actual results, but previously we have seen an interesting correlation and if they do have six more good holes, this gets interesting. Yesterday, they trade 5,552,710 shares, showing that there is interest.
Andina Minerals on the other hand, trades almost nothing and is almost unchanged as they announce results on their Volcan gold project in gold-rich Chile in an area prime for consolidation. Forty eight metres of 2.54 g/t gold doesn’t always move the earth for speculators, particularly at that height in Chile, but with a massive 40,000 metre drilling program ongoing and nearly completed, the important coming events of new resource and reserve calculations could be large enough (at least we hope so) to make Andina prime for a takeover/consolidation or whatever. The stock does almost no volume, trading a mere 118,700 shares yesterday.
Today there is some profit taking on the story, but we should mention some of the comments made by the Hard Rock Analyst boys—David and Eric Coffin on a story they have followed closely, that being Hathor.
Yesterday on a Special Delivery of the Hard Rock Analyst regarding both the market and Hathor, they write, “If anyone is busy with this market it will be the doctors and medical techs who deal with whiplash. The greatest surprise to us over the past week has been the number of resource sector analysts who have assumed the seemingly cathartic move by US financials a week ago would mean resource prices should move lower. Without question there is a large tie between US Dollar valuations and commodity prices, but only a small one between the US marketplace and commodity prices. Our cautions are out on various metal markets, but our biggest concern about the chaotic nature of change continues to also be the most difficult one to read as the rules continue changing on who has the biggest say in the pricing of goods and ideas. Caution about the resource sector is still warranted, but so too is optimism.”
On Hathor they write, “Hathor Exploration (HAT-V; closing at $2.25, up 19 cents on 880k shares) put out further results from its Midwest Northeast discovery after the close, which will now be called the Roughrider zone (the name of the private company vended into HAT, but also of the local pro football team that won its first national championship in some decades last autumn) after the close today. The company does not yet have more chemical assays to report, but does have a further six drill holes into the find that have high counts. The drilling has been focused on determining the orientation of the newly discovered deposit, which has resulted in locating the body in six of seven new holes drilled there and an improving degree confidence in the mineralized material as this process moved along.
Five of the six new holes cutting the zone had one or more sections of +9999 counts in the scintillometer gamma radiation readings, while the sixth had a high of 6000 cps (counts per second) that would itself be a win for most exploration companies.
This release confirms that Hathor has made a significant discovery, and that the company continues to have considerable upside potential just for the Roughrider discovery and before considering the dozen or so other targets it still has to test in this area. It is still very cold in the Athabasca district (down to -30O at last report) and drilling through ice on the lake continues.
While it is not possible to try and put a valuation on the discovery until there are chemical assays to work with, the market can be comfortable that this is not going to be a one-hole wonder, and while the ice holds drilling can continue to define and expand it. The colours of the Roughrider football team are green, and we expect to see that reflected in the Hathor market. Guessing how traders will act can be tricky but with these results we think HAT could and should trade significantly higher in coming sessions.
We reiterate the Speculative Buy outlook for Hathor.”
MARCH RESOURCES (V-MCF) $1.12 +0.12
One thing you eventually learn about the big high risk/high reward exploration plays is that nothing seems to happen on time. It looks like an executive decision was made and March Resources decided to go as deep as 3100 metres, which they are probably at today.
Give another length of time to test whatever they might have found and we are probably looking at late next week before we know if they’ve got something to get excited about.
Meanwhile, at Energulf Resources there seems to be no update at all about when they are going to get to use the rig offshore Namibia and we start to seriously wonder, about what other problems might happen if they ever do discover oil in Namibia.
Meanwhile, Corridor Resources, any hour, any day they should be mentioning whether there is any gas at what is the deep Dawson Settlement and just how excited a person could be/should be about that. Any hour, any day. |
