Yorkton says buy:
Montello Resources Ltdÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ MEO
Shares issued 35,719,337ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Feb 16 close $0.56
Tue 17 Feb 98ÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿÿ Research
Art Ettlinger and Douglas Leishman say why
By staking lands immediately after Ashton announced a $5.5ÿ millionÿ option
agreement with "a large Alberta energy company" Montello has acquired a key
prospect southeast of Ashton's kimberliteÿ discoveries.ÿ Theÿ 600,000ÿ acre
Jazzÿ prospectÿ isÿ currentlyÿ beingÿ drilled,ÿ with 18 geophysical targets
initially being tested. Montello is usingÿ anÿ interestingÿ andÿ innovative
geologic model to develop its drill targets. A potential hurdle the company
faces however lies in the actual thickness of glacial till underlyingÿ this
partÿ ofÿ Alberta.ÿ Till deposits are characteristically highly variable in
thickness and extreme local variations from non-existentÿ toÿ greaterÿ than
150m in thickness are not uncommon.
Montello geologistsÿ haveÿ identifiedÿ aÿ west-northwesterlyÿ structureÿ of
regionalÿ extentÿ cuttingÿ through the east half of the Jazz property. This
structure roughly coincidesÿ withÿ aÿ subtleÿ magneticÿ linearÿ presentÿ on
compositeÿ aeromagneticÿ maps of the province and with a channel of thicker
glacial till, lines of evidence that a major structure is present.ÿ Cutting
thisÿ structureÿ onÿ Montello'sÿ propertyÿ is a series of northwesterly and
northeasterlyÿ strikingÿ features,ÿ similarÿ toÿ faultÿÿ structuresÿÿ found
elsewhereÿ withinÿ theÿ Peaceÿ Riverÿ Arch.ÿ Theseÿ fault intersections are
correlative with airborne magnetic anomalies and with the margins ofÿ broad
topographicÿ highs identified using digital topography. This combination of
geologic elements presents a reasonablyÿ convincingÿ argumentÿ thatÿ buried
intrusiveÿ rocks,ÿ potentiallyÿ ofÿ kimberliticÿ composition, underlie this
property.
Ground geophysical surveys to refine additionalÿ airborneÿ targetsÿ onÿ the
Jazz prospect are continuing. Elsewhere in northern Alberta, Montello has a
continuing program of airborne magnetic surveys to cover over three million
acresÿ ofÿ landÿ within and surrounding the BHT. The company is in a better
position than most to evaluate this data because ofÿ itsÿ previousÿ diamond
explorationÿ experienceÿ in the Hinton area, where it is in a joint venture
with New Claymore and Troymin.
Montello has financed its current work programÿ throughÿ anÿ allianceÿ with
Redwood Resources Ltd (RDW ASK). To date, Redwood has paid to Montello $2.5
million by acquiring 2,000,000 common shares throughÿ aÿ privateÿ placement
andÿ anÿ optionÿ onÿ Montello'sÿ BHTÿ properties.ÿ This gives Redwood a 30%
interest in allÿ ofÿ Montello'sÿ landsÿ withinÿ theÿ Buffaloÿ Headÿ Terrane
(approximatelyÿ 4,000,000ÿ acres),ÿ withÿ further payments to increase this
interest to 50%.
We recommend Montello asÿ aÿ speculativeÿ investmentÿ leasedÿ onÿ itsÿ land
position,ÿÿ management'sÿÿ previousÿ Albertaÿ diamondÿ experienceÿ andÿ its
geological abilities in generating kimberlite drill targets.
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