Hello Valuepro
From today's CC Morning Coffee.
* SouthernEra Resources (SUF : TSE : $7.35 : Issued 30.4M f.d.) /
New Indigo Resources (NDR : ASE : $0.85 : Issued 14.9M)
On Friday, SouthernEra and New Indigo announced that discussions of an
amalgamation of the two companies were underway. SouthernEra's
fully-diluted market capitalization is approximately $225M, and New
Indigo's is approximately $12.7M.
New Indigo's assets (held through Snowpipe Resources Inc.) include a
50% interest in approximately 2.4M acres in the NWT (50% Lytton
Minerals) with the principal property being the Jericho Project.
There are three diamond-bearing kimberlite pipes known as the Jericho
1-3 pipes: Jericho 1 and 3 contain an estimated 17M tonnes averaging
0.7-1.0 carat/tonne. The Jericho pipes are located 28 km north of the
Lupin gold mine. Recently, a new discovery was announced known as the
Contwoyto-1, with initial results pending. In northern Alberta, New
Indigo and Lytton can earn up to a 75% interest in claims belonging to
Birch Mountain Minerals. The two companies have joint-ventured the
Rockinghorse and Hood River projects (NDR 25%) out to Kennecott
Canada, an RTZ Limited subsidiary. H.A. Simons has completed a
scoping study suggesting a 2,400-3,600 tonne per day operation which
could produce over 700,000 carats annually for the Jericho Project,
which is clearly New Indigo's principal asset.
Further exploration is planned; however funding has been exacerbated
by poor markets, a reversal of management of Lytton, and litigation
initiated in late June against Lytton, New Indigo, Glenmore Highlands,
Klondike Gold, Finngold Resources and various individuals, by First
Island Trustees as the trustees of The Fern Trust and Howard B. Miller.
Mr. Miller is a London-based lawyer and deputy chairman of Nelson Gold
Corp. We would refer you to a lengthy article in the Sept. 8/98 Globe
and Mail for some of the background.
We would not like to see SouthernEra inherit this litigation (one
battle a year is enough), and could only hope that New Indigo could
extricate itself from being included as a defendant. We do like the
potential of the Jericho Project, and had been optimistic that with
the (former) new management at Lytton and then-planned merger with New
Indigo (aborted at the end of June), that the project would move ahead
in a refreshing manner. At the end of March, New Indigo had about
3.6M in cash and short-term deposits, and some $49.1M in exploration
and development costs booked.
David James (204) 988-9602
*******
Regards
P.S. Thanks Frank |
