Nolan
Neil Maedel who writes the Mini-Cap Analyst (formerly the pro trader) is also recommending LMX as is J. Taylor. The pro Trader has had some spectacular winners over the last year such as Arequipa @ $1.50 and Corriente @ $4.00 to name a few.
Here are Neil's comments on LMX
This one looks higher
Maedel's MINI-CAP ANALYST
June 28, 1996
On June 10, when we issued a fax bulletin regarding the recent metals' decline, we also added LMX Resources (Vancouver Stock Exchange LMX 2.80) to our recommended buy list. Since then its shares have traded as high as $3.50. We still expect its shares to do very well over the near term and consider it a buy at its current $2.80 price.
On the heels of Valerie Gold Resources' share price sprint from $3.80 last March to a recent high of $29, and Farallon Resources' blast-off from $3 to $20, Don Farrell's LMX Resources came to life a few weeks ago when its shares jumped from $1.50 to $3.50 before consolidating in the $2.50 to $3.00 area.
The excitement was based on the performance of several small companies in the area and the results of their exploration and development of small gold, silver, polymetallic and rare earth metal mines within a narrow 300 mile long trend in Guerro State, Mexico.
One of the most noteworthy is Valerie Gold (market cap high: $450 million), which recently reported a 28.7 metre (94 feet) drill intersection (hole #2) averaging 0.81 and 494 grams per tonne gold and silver respectively, with 2% copper, 0.85% lead, and 2.08% zinc at its nearby Mamatla mineral reserve. The intersection was into a 30 metre bed of laminated sulphides (30%) with 100 million tonne potential.
Teck Corp. also cintributed to the area's positive press when it increased its interest in its Nukay East Gold Project. The Nukay is only a few hundred kilometres to the south of LMX's Vianey mine Project and the industry sources say the results to date have been very favourable. Teck's Nukay Mine on its own has a potential resource of around 500,000 ounces of gold, while the surrounding gold targets are given a much higher upside.
Farallon Resources is just beginning drilling on its Campo morado project just north of LMX's Vianey Mine. Since the company began exploring the property (which contains 20 massive sulphide prospects and several small mines) last February, its market cap ballooned from $35 million to a high of $450 million.
Not to be lost on Maedel's trioof analysts is that at LMX's current $2.80 per share, its market cap is only half of what its two neighbours' market caps were before the area heated up, their targets were outlined and discoveries were made. For LMX's market cap to reach the same levels that both Valerie and Farallon were before their share price moves (roughly $30 million and $35 million respectively) its shares would have to rise to around $7.00.
By our calculation LMX in cheap. But more important, it is unlikely to stay that way. One drill program has just been completed and we expect that the results will be good. Drilling is scheduled to resume in two weeks. Here are the details:
LMX's Vianey mine is a small high grade polymetallic deposit which has been producing approximately 300 tonnes per month of ore for the past 20 years, mainly from the Vianey vein, one of three principal veins in the mine. The records from the government-run mill show a low average of 65.34% ore recovery over the last nine months. Average per tonne grades reported by the mill were a stratospheric 370 kilograms silver, 19.6 kilograms lead, 0.56 kilograms copper, and 25.45 kilos zinc worth a profitable $400 to $500 per tonne. Channel samples (70 in total) taken from within mine workings ranged from an eyebrow-raising 36 kilos per tonne silver over 0.4 of a metre and 26% zinc over 0.3 of a metre to a more subdued 1.61 opt silver, 0.007% copper, 0.84% zinc and .774% lead. A small channel sampling program over 150 metres of the vein's one kilometre strike length established probable reserves of about 20,000 tonnes 0.007 opt gold, 7.8 opt silver, 0.112% copper, 2.34% zinc and 1.03% lead calculated over a mining width of 9.8 metres. Mining costs averaged US $23 per tonne.
The other two veins, the Tepe Mesquite, and the Number One branch off the Vianey, are approximately 1.5 metres wide and have the same minimum strike length. Three channel samples on the Tepe Mesquite averaged .3 opt gold over 1.5 metres, 107.34 opt silver, 0.8% copper, 4.8% zinc and 2.7% lead. Two channel samples from the number one vein averaged .005 opt gold, 3.6 opt silver, .03% copper, 0.3% zinc and 3.2% lead.
These values, while making dandy cocktail party conversation, are not terribly meaninful to investors looking for large exploration plays with high probability of sending a junior exporation company's shares into orbit. It is the surrounding rock which starts to make this play look very interesting. As for the veins, they are both the proverbial smoke that says these explorationists could be on the trail of a profitable and big deposit and the plumbing which may have helped get it there.
What caught Maedel's attention was when the company began to outline a 100 metre diametre breccia/coglomerate pipe which appears to run parrallel to the vein systems. If this is the case the potential minable tonnenage moves up to the 4-5 million tonne range with targetted per tonne values of a highly profitable 175 grams silver, 2.5% zinc, 1.5% lead and 0.5 grams gold. LMX recently drilled 5 holes into a portion of the breccia pipe at the lowest -75 metre level. These five holes passed through the zone, as do a drfit (horizontal tunnel created from mining) 50 metres above, a stope (a vertical tunnel created as ore is removed) 750 metres from the drilling and secondary access tunnel a further 250 metres away.
An intriguing and potentially highly profitable aspect to the Vianey play is found in a Mexican bureau of Mineral Resources study released last February. The study concludes that the Vianey area, which consists of the Morelos Guerrero limestone basin, covering an area 10 kilometres by 5 kilometres and up to 2.5 kilometres thich, is extensively folded, faulted and domes and that the mineralisation is related to the emplacement of intrusive bodies similar to the Vianey's. in the model proposed by the bureau ther are three types of mineralized bodies. The first is iron, gold and coppers skarn (i.e. Teck Corp's Nukay Deposit). The second consists of high grade pods or lenses of gold, copper and iron; the thrid consists of high grade ore shoots of massive silver, lead, zinc, vopper and rare earth metals. This third type, according to the bureau, is actually an extension of the second type, the high grade pods.
The implecation is that according to this model the Vianey's veins and the breccia pipe (both which act as a conduits for the metals) should lead downward to a lens or pod with a high grade gold and copper content in the several million tonne range. With this in mind LMX surveyed where they estimated that the distal end of the breccia was located using induced polarization to pinpoint the location of any metallic or sulphide bodies underground. The IP indicates that a highly metallic body occurs approximately 500 metres down dip from where the recent drilling took place and in line with the newly outlined pipe.
Knowing that the Vianey mine consists of high grade silver, lead, zinc and copper ore shoots, the company tested the underground workings for the rare earth metals that the study indicated should occur. The assays were from a suite of rocks taken from earlier channel samples from the yet-to-be mined vein material and surrounding rock within the mine. They returned values of 0.3 opt iridium, 45.9 opt cadium, 103.5 opt antimony, 25.5 opt selenium and 3.3 opt cerium right in line with the bureau's model.
In sumamry, LMX has plenty to go on in its search for larger highgrade copper gold reserves around its Vianey mine. The company has already received highly encouraging results from the work underground at the mine indicating both a large breccia type polymetallic zone and an excellant, deeper copper-gold target. Above ground IP work also correlates well with underground work which indicates the presence of a copper-gold target. The project is alos in a wellknown and closely-watched area, meaning the share-price-enhancing recognition should come quickly. The company also also has very few shares outstanding, making the actual market cap quite small (around $14 million). LMX shares are a buy at their current $2.80 price.
Quick Facts
LMX Resources Corporate office: #1106 W Fender Street, Vancouver
BC V6C1C8
Telephone: (888)662-8955 Fax: (604)685-9141
President: Mr. Don Farrell
Listed: Vancouver Stock Exchange: LMX
Share price two year high/low: Cdn $3.50/0.30
Shares outstanding: 3.7 million, 5.5 million fully diluted
Shares owned by insiders approximately 30%
Here are J. Taylor's comments about LMX
LMX Resources Ltd - In the News
Jay Taylor knows and trusts Don Farrell
LMX Resources Ltd LMX
Shares issued 6,004,902 Dec 19 close $1.50
Fri 20 Dec 96 In the News
Jay Taylor says in the December 6 issue of Gold & Gold Stocks, that LMX's
Don Farrell was one of the first venture capitalists he knew back in 1981,
and he has learned to know and trust him. Since then Mr Farrell has become
one of Vancouver's most successful venture capitalists outside the mining
industry, with a great demand for his services, so Mr Taylor is reassured
when he allocates his time and money to a new venture. LMX has the entire
interest in the producing Vianey mine in Guerro state, Mexico, a small but
high grade silver, copper, lead and zinc operation, and several properties
highly prospective for precious, base and rare earth metals. With a
relatively low number of shares outstanding (6.5 million), a producing mine
with ore worth between US$400 and US$500 per ton, other prospects and a
quality management team, the stock is very attractive for diversified gold
portfolios if bought below US$2.
(c) Copyright 1996 Canjex Publishing Ltd. canada-stockwatch.com
Tony |
