DRV (Very Strong Buy) - first coverage, NDX, OXIHF, PBT, ALYI
The company of interest I spoke of in my last blog is Duran Ventures (DRV on the TSX-V). As IMHO, I feel it is an absolute screaming buy and this is the first time I’ve blogged about it, it is the main topic of this blog.
DRV
Duran trades in the 10 to 13 cent range with strong volume, has a tiny $10 million market cap and enjoys no debt and top-drawer management. More importantly, Duran has three Peruvian properties that are all absolute company-makers – and is about to drill on two of them. Both are adjacent to properties where majors are absolutely foreseeing building mines.
Note: There is a real opportunity for investors to get a strong position in DRV before it, IMHO, shortly takes off. See: The Exercising of Shares, at the bottom of the DRV section of this blog.
Here is Duran’s website:
duranventuresinc.com
And here are two great Research Reports. Please do your DD and read them thoroughly, as they contain a wealth of information, much of which I don’t address in this blog. And of course, find all the info you can from other sources.
The first Report was done by Howlett Research Corp. in late April:
howlett-research.com
This second report, done by Mining MarketWatch, is very bullish and just came out today:
miningmarketwatch.net
DRV’s flagship copper/moly property, Aguila, in Central Peru is on one side of a valley in which Pinoles, one of Mexico’s biggest miners, aggressively has 4 drills turning. This play is one of Pinoles premier sites (see reports above). Also note that this is elephant country. Properties in this area easily can be bought out in the $200 million to $400 million range - or much, much higher.
Here’s a quote from Market Equities Research Group:
With the latest drilling Duran appears to have now carved out over of a billion pounds of copper at the Aguila central area alone and is targeting several times that plus they appear to have established a new zone they share with Penoles ... Duran has no resource calculation yet but drilling at Duran's Aguila central zone has so far established mineralization over an area ~300m+ x 300m x 400m (depth) -- Market Equities Research Group estimates this to represent in excess of 100,000,000 tonnes averaging ~0.6% Cu ... this (non NI 43-101) in-situ appears over 1.3 Billion pounds of copper and ~100 Million pounds of molybdenum."
Penoles is making moves to build a mine – ie. getting the community used to the idea and talking about building a mine. Definitely DRV will have to be included in any mine plan, be it with Penoles or another major which would buy out both sides.
As Penoles has an an imminent reserve estimate, DRV needs to drill to build up their own estimate – and they are doing so ASAP.
The Double Jack – ie. the Ichuna Copper/silver Southern Peru property, is another winner. This property, optioned to Duran, is less than 3 kilometers from the major new Chucapaca discovery just announced by Goldfields, the South African mining giant, and Buenaventura, the Peruvian giant. DRV are the only publicly traded company with land in the immediate area.
See below:
stockhouse.com
At a press conference on May 11, 2010 Nicholas Holland, Chief Executive for Gold Fields Ltd. described the Chucapaca discovery; "This is probably the most significant discovery in South America over the last few years. Hold on to your hats, we think this could get a lot bigger."
The thought is that there are 5.6 million gold equivalents OZ, as states Goldfields in a NR:
goldfields.co.za
Several months ago, Buenaventura, wanting to stay on the quiet about this, asked Double Jack whether they wanted to sell. Double Jack, though, had to say that they had already optioned the property to Duran. As the property is worth a heck of a lot more now than it was (and Jeff Reeder struck the deal when he became DRV President), you can bet the deal to acquire it will be passed with wide grins at the upcoming Duran AGM.
Surface results on Ichuna look very good, as this week’s NR shows:
stockhouse.com
For both the Aguila and the Ichuna properties, it makes economic sense for the mining major’s mines to encapsulate the Duran properties – hence many majors are signing NDA’s with DRV and quickly putting boots on the ground.
The last of the major three properties is the Minasnioc High Sulphidation Gold Project in Central Peru. In this case, Duran outbid Barrick for a property that has had millions of dollars spent on it.
stockwatch.com
Jeff Reeder, Duran’s President and an ex-Hunter-Dickinson guy, is the reason that DRV has such a strong stable of 100% owned properties in Peru. Jeff has been in Peru for 16 years, married a Peruvian - and speaks Spanish fluently. There is just no substitute for being there.
Jeff Reeder has the strong backing of some of very successful mining players on Bay Street, a fact I know first hand. It bodes very well that Todd Bruce, ex-CEO and President of Crystallex, Ex-President of IAM Gold and a senior management person at Anglo Platinum, took up a Duran Directorship just last week. This man has a very impressive CV, huge Street respect and has raised hundreds of millions of dollars. So… just why is he becoming a Director of a tiny junior?
The Exercising of Shares – ie. a great chance to get a good position at cheap prices.
DRV has exercised its right to have 15 million warrants at 10 cents exercised by June 16. After that date, they will expire.
DRV trades above 10 cents and as such, 3 million plus warrants have so far been exercised. My best (very educated) guess is that the (quite small) group of warrant holders will hold on to as many shares as they can pay for – say 4 million of the 15 million– meaning another 7 or 8 million shares will potentially hit the market for sale by the 16th.
I and friends have been collecting our positions for awhile now and plan to buy much more. The exercising of warrants means that there is a great opportunity for other investors to get a strong position before the stock starts moving up. For warrant-holders who need to sell, they must get over 10 cents to make exercising worthwhile. As quite a few are being exercised, for investors to get what they need in the 11 to 12 cent range is quite doable.
With monies in the treasury, one can absolutely count on drilling being announced within days. And make no mistake - Jeff Reeder has a very good idea of where to drill to get the most bangs for his buck. And he’s very promotional, in the best sense of the word - so the drums will be banging.
In a nutshell: I can’t say enough about this company and IMHO see it as an absolute lay-down winner in the short-term and a potential 20 plus-bagger in the future.
NDX
With Novadx, the acquisitions are definitely close, so definitely it is a good buy. Operationally, everything is golden, but it’s the financings, Board of Directors and company thinking that has kept the SP way below where it should be. It has also killed the volume. If you haven’t already, please read my last blog/s to get my thoughts on the above subject matter in an in-depth manner.
To make matter worse re the SP, the BOD (which have done nothing but sell a great many of their shares and vote themselves a boatload of options) has let go the IR team at Ocean Point Advisors that has been responsible for the majority of stock buying in the market – ie. when all the financings were done in-the-market (as Neil and the BOD badly placed every one), these guys bailed them out time and again.
IMHO, the huge loss in market cap (and volume) which shareholders have suffered lately is in large part (sure, a little is market-related) a direct result of this decision by the BOD.
I’ve spoken to Ocean Point and they are honourable guys who believe in the company. They are bullish on it – but really, I can’t see them going to the wall as they’ve done in the past (to make up for Neil M.’s dodgy financings) when treated this way.
So, IMHO, the NDX SP will go up – but nowhere near where it should. Change is needed. Please let me know your thoughts re this.
OXIHF
Oxford continues to plug away at money processing deals. Another leg up is definitely coming….IMHO.
PBT
I am more encouraged now than I was during my last blog where I called for a hold – but don’t yet see it as a buy. Clearly I need to do more DD. I will say that I feel they may get more land shortly and that I feel better re the Clinch deal and the monies raised.
All told, I’ll probably sort it out when I hit Vancouver/Alberta in a few weeks.
ALYI
A (very!) misguided debt conversion and the sale of millions of shares, many of them short, have caused a huge supply of stock to hit the bid. This over-selling should end soon, as the debt conversion is over and market makers will need to cover – ie. don’t be surprised if ALYI runs up quite quickly.
The joke of it is that the stock is trading at shell value – ie. a $650k market cap. Seeing that they will have $3 million in sales this year and $6 million in 2011 (when it will be profitable) – this is sad. Or rather…it’s not sad if you are buying shares at these prices.
Look for Utiba Americas to close a few more deals in the near future and for the fundamentals to continue to grow. Yes, the difference between this company’s fundamentals and its SP is a dichotomy. If the President hadn’t done the bad financing, it would be many multiples higher.
Cheers.
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