Conversely if those folks are HOLDING - THEN, everyone should buy more!
VBG.
Chuca-not selling if those folks were selling then we would see some action the last few days. Not seen...thus a keeper position. Right. Correct. Of Course. Now, many of you know that I wrote in Bios and such befor...there are reason to fear some 500,000 share blocks...not this time. WE ARE NOT IN SOME FOREIGN BIO that is playing with this and that. Arizona in the US of A. Non of that CN stuff.
stockhouse.com
So, if it is a thingy we don't have to worry...they have no reason to view anything but appreciation of stock price from 18 cents and up- Tim- a nickle for your thoughts. A pennywise and pound ( 6 Tons ) foolish! JMHO. Watch us find out that T Hoare took a Position, history repeats itseld ala IPM? As Cannacord is OWNED BY T Hoare of the UK. They see us flying IF THIS RESEARCH THAT I SPECULATE UPON IS TRUE!!! ! Anyone remember The T H Report? This is the Martin Hay ( OF T Hoare Report Fame as this is the 2 part report)The .08 OPT must be raise and we all see that MAXAM, MGAU, and GLOBAL will be such Leaders( !
International Precious Metals
A Technical Assessment
Recommendation: Speculative Buy
Share Price................US$ 6.25
Issued shares...........17.5 m
Market capital...........US $109m
12 month high/low....US $14.50/1.90
Net current assets...US$5.2m
Long term debt.........US$0.5m
o We believe Platinum Group Metals and Gold exist in unusual mineral associations in Arizona's Desert Sands.
o IPM claims to have achieved yields of .08oz/ton gold, platinum and palladium. Behre Dolbear will be conducting tests to investigate this. A result is expected in August.
o If a grade of 0.80z/ton can be confirmed IPM's unproved resource is likely to be in excess of 43 million oz of gold, platinum and palladium.
o Recovery an assaying of this material is extremely difficult. IPM is in an early phase of development requiring funds of US $5-6 million per annum.
o Success depends upon the generation of a viable metallurgical process and even allowing for a 1 in 4 chance of an economic operation being developed within 3 years, the risk/reward profile of these shares looks attractive.
July 1997
Analyst: Martyn Hay
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Introduction
The aim of this report is to present the current state of development of International Precious Metal¹s (IPM) Black Rock property and to determine the risk and rewards associated with developing the property to the point where it could host an economic and viable mining operation. Information from Global Platinum and Gold Incorporated's (GPGI) small scale production plant which is being run as a 10 ton/day pilot operation on its Hasssayampa property, also in Arizona has been used to aid this analysis.
The views that have been expressed are based on information obtained from both companies during a recent three day visit.
Risk and Reward
There is a sufficient body of evidence to show that International Precious Metal's and Global Platinum's "desert sand" properties, west of Phoeniz, host platinum group metals and gold in measurable quantities.
There has been much debate for some time as to the existence of gold and platinum group metals in the Arizona desert. Both the Arizona Department of Mines and Mineral Resources and the Toronto Stock Exchange are not convinced because the material cannot be reliably assayed by conventional methods. Against this is a plethora of assay data from many assay laboratories around the United States on head samples and plant products, including returns from Union Miniere, Belgium, which show precious metals values. Assay values from repeat tests on the same samples often show wide variations. The data may not indicate how much is there, but it does provide a strong indication of the presence of gold and platinum group metals which may or may not be present in economic quantities.
Further, a geological report conducted by Inco in 1991 on GPGI's properties concludes that "... there exists a wealth of anomalous high grade PGM analyses which are extremely unlikely to be produced by salting and therefore should be taken seriously. Although the scatter of PGM values is extreme and in some cases even the order of magnitude is in question, certain metal ratios are impossible to be manufactured and therefore are considered to reflect natural samples. Inhomogeneity of PGM distribution is considered as one of the major reasons for the wide scatter of values."
At the Annual General Meeting held on Friday, 20th June, 1997, IPM presented evidence to show that its Black Rock property hosts platinum group metals and gold in measurable and recoverable quantities. IPM announced that three bulk samples taken from the original 1 square kilometer grid yielded 0.82 oz/ton of refined metal which consisted of 0.32 oz/ton gold, 0.29oz/ton platinum and 0.21 oz/ton palladium. Rhodium assays were not available at the time of the AGM. These values are unsubstantiated and independent verification by Behre Dolbear and Auric Metallurgical Laboratories is expected by August, but these results are a considerable improvement on IPM's previous announced yield of +0.25 oz/ton gold only. To date the only value Behre Dolbear has verified is 0.04 oz/ton gold from IPM's property.
Both IPM and Global have established a workable but inconsistent assay method and laboratory scale recovery process. An initial review shows both are costly for an operating environment. It is early days and significant technical development is required to improve recovery and reliability.
Both companies have proposed that some of the precious metals hosted in the Arizona desert sands exist in unusual chemical and mineralogical associations and therefore respond abnormally to conventional assay and recovery methods. It is believed that this is because some classical analytic methods in standard use, such as fire assay, are not capable of providing an easy solution to the determination of all naturally occurring ores. Ores displaying this characteristic are referred to as refractory or non-assayable. An example of this is the Emperor gold mine in Fiji which began operations in 1935 and is still in production but has great difficulty in structuring an accurate metallurgical balance because of assaying difficulties.
To successfully treat desert sands material it is deemed necessary for any assay or recovery process to stabilize the precious metals into a state which increases their amenability to normal recovery practices. From current indications of yield this appears to be case, and this in particular is one of the core issues which should be validated.
The assay method used by both companies is a variation of the standard fire assay procedure for refractory ores. In each case the procedure has been customized to suit the idiosyncrasies of the ore. Auric has recently developed a standard fire assay for IPM which gives significantly more consistent results than any previous method on head samples.
Both company's recovery processes are in an early stage of development and are more accurately described as a "laboratory scale recovery method" rather than an extraction process. Indications are that recovery is low and a significant amount of technical development is required before these methods can be scaled up to an economic level.
IPM has considerable, although speculative, upside potential.
IPM's recent announcement shows the likelihood of an ore body which we believe can be properly assayed. The extent of the deposit has yet to be properly defined but it is known that the deposit remains open in all directions, including depth. Sufficient drilling has been done but the grades of the samples remain unproved until Auric's new assay method is substantiated by Behre Dolbear.
If current indications of a yield of .82oz/ton prove correct, the feed value at current metal prices is US$256/ton. This is very high compared to any other world precious metal mines which generally run at US$15-60/ton. Although US$256/ton is a high feed value, operating costs will also be higher than normal because of the complex nature of the ore.
If an economic extraction method can be found IPM will own a very profitable mine. If the assay and drilling data available can be confirmed, IPM's resource base is estimated at 54 million tons at 0.8 oz/ton of gold, platinum and palladium giving 43 million oz of precious metals. This assumption is based on a 1 square kilometer grid and there is likely to be further reserves in the area outside this grid.
Considering the uncertainties, it is obviously difficult to value IPM. The company could well be worth many multiples of the current market capitalization. One of the simple routes to valuation is the price paid per ounce in the ground. In North America this is normally around US$50/oz gold; if one was to halve this to US$25/oz and apply a 1 in 4 risk factor this would still produce a value per IPM share of US$15. If the project does prove to be viable, US$25/oz would be a low valuation for platinum in the USA.
IPM's annual expenditure is about US$5-6 million per annum and it is anticipated that US$15-20 million will need to be spent over the next three years in bringing the project to a viable state.
It must be remembered that all valuations depend of the credibility on the economic exploitation of the available reserves. In essence, success depends on the generation of a viable metallurgical process. This will most probably take 2-3 years with a 1 in 4 chance of success and investors must be prepared to provide up to US$20 million in development costs bearing this in mind.
History
International Precious Metals (IPM)
IPM's roots go back to 1987 when it enjoyed a joint venture with Degussa AG and Hong Kong based Jenkins Holdings which lasted until 1991. Up to 1993 several prospects in the United States, Canada and South Africa were investigated including the evaluation of a UG2 platinum deposit close to Rustenburg. IPM first became aware of a number of precious metal prospects in Arizona in 1993 at a Gold Investment conference. All the prospects were known not to respond well to fire assay. Six of the prospects were investigated and the samples sent to a local laboratory recommended by the vendor who used a fusion assay technique partially developed by the laboratories of Stillwater Mining. The Black Rock area returned the highest precious metals values (0.16oz/t gold) and at the end of 1993 the company entered into a joint venture with the vendor to develop the property. Recently IPM has taken 100% control of the venture.
Almost from the start the company fought to maintain credibility. At the heart of the debacle is the fact that the ore does not consistently respond to standard assay methods acceptable to the Investor and Stock Exchange community. Both the Arizona Department of Mines and Mineral resources (ADMMR) and the Toronto Stock Exchange (TSE) have consistently doubted the existence of a deposit containing platinum group metals and gold. Disbelief is centered around the use of a non-standard assay technique and the fact that a large scale deposit of precious metals has gone undetected in a highly accessible area for so long. In May 1994 the company¹s shares were delisted on the TSE due to failure to lodge annual accounts. The shares were relisted when the accounts were lodged. Also, in that year a complete absence of precious metals was found in the deposit when evaluated by Kilborn Engineers at the request of the TSE. IPM strongly refutes this, pointing out that sampling was only conducted down to a depth of 3 feet even though it was made known that mineralization begins at about 4 feet. In response to this international mining consultants Behre Dolbear were contracted in May 1994 to assist with process development and to authenticate both assay and recovery processes.
Present Status
For three years the company has been grappling with an ore where the precious metals are housed with in a complex mineral matrix which makes measuring and recovering the contained values extremely difficult. Ores of this types are fairly common such as the Emperor gold mine in Fiji which has been in operation since 1935. These are commonly referred to as refractory or sometimes non-assayable ores. At this juncture a workable assay method and recovery process has been developed using a combination of well known extraction techniques. The problem is that the assay method is non standard under Stock Exchange regulations as it involves leaching, precipitation and electrowinning. Using a number of methods assay results from some 5000-6000 samples have consistently shown a wide scatter of values which is typical of a non-assayable ore.
A point of immense conjecture remains as to whether the deposit hosts precious metals or is it a scam on Bre-X proportions. In this regard we have the advantage of hindsight in considering this possibility. Bre-X highlighted a number of characteristics;
o Average assays for six zones making up the 56 million oz of gold resource were remarkably consistent, averaging 2.3 g/t with a range of 2.16-2.85 g/t.
o No half cores or duplicate samples were kept for future reference.
o Only two assay laboratories were ever used to process the bulk of the samples throughout the duration of the project.
o Reproducibility in fire assaying was a major constraint.
o Free gold particles were particularly coarse at 400 microns.
o Independent metallurgical test work gave a remarkable result of 91% recovery of the gold in a gravity concentrate which was less than 1% by mass of the feed.
An appraisal of the information available shows little similarity to these characteristics except for the difficulty in reproducibility in fire assaying. Recently IPM announced that AurIC, an independent laboratory, has succeeded in developing a more conventional and reproducible fire assay method. Although an improvement, some elements of the method still require optimizing and we look forward to Behre Dolbear verifying the procedure in the near future. We therefore believe precious metals do exist on the property as there is a plethora of assay data from many assay laboratories around the United States on head samples and plant products, including returns from Union Miniere, Belgium and Eastern Smelting and Refining in Massachusetts.
To progress IPM must now have its assay and recovery processes independently verified and the properly determine its resource base.
The company employs some 20 people and runs a Head Office and a testing/storage facility in Phoenix. The latter is a warehouse which contains all bulk samples, a mobile pilot plant, accessory test equipment and an assay/microscope facility sufficient for the needs of the pilot plant. Shares are traded on NASDAQ and also quoted on the Canadian Dealer Board.
Global Platinum and Gold Incorporated (GPGI)
The company was formed in 1978 and spent its time pursuing uranium, tungsten and base metal prospects. About 15 years ago a routine survey of state archives in Arizona unearthed old documents detailing agreements between the miners of the Oro Grande and other areas around Phoenix and the San Francisco mint in California. These stated that the miners must waive all rights to any revenue from platinum group metals contained in the dore bars dispatched for refining. Based on this evidence the company conducted some preliminary tests on a 9 ton sample which yielded much the same result as IPM's initial investigation of Black Rock. Following this the company acquired the Weaver Creek property, west of Phoenix with MacFarland and Hullinger (a local trucking and mining company) as partners. In 1994 GPGI bought out its partners and took outright ownership of the property.
Up until the end of 1991 the company enjoyed a relationship with Inco Ltd. which ceased when Inco downsized and liquidated numerous non nickel operations. The company is not as well known as IPM because it is privately funded and therefore has not been metallurgically scrutinized according to Stock Exchange rules. It has been developing a suitable assay and processing method for about 15 years. A large scale pilot plant capable of treating 100 tons per day was erected on the Hassayampa in 1994. This same year also saw a claimed technical breakthrough in both assaying and processing methods by the use of two types of custom made catalysts which have enabled the process to be further refined over the intervening 3 years. Late in 1996 the company extended its plant to include a refinery to selectively precipitate gold, platinum, palladium and rhodium in the form of their specific chloride salts.
Both the assay and recovery methods are highly innovative and are reported to yield precious metals in excess of 7 oz/ton of combined platinum, palladium, rhodium and gold. Returns from local refiners confirm the production of precious metals but not the yield. The company¹s situation in terms of ore type and difficulty in assaying and recovery is similar to IPM. Again, sufficient evidence exists to show that GPGI's properties host platinum group metals and gold, but independent verification is required to ascertain the grade and whether the recovery process is viable.
A geological report was conducted by Inco in 1991 on GPGI's properties and a portion of the conclusion is quoted in full: "... there exists a wealth of anomalous high grade PGM analyses which are extremely unlikely to be produced by salting and therefore should be taken seriously. Although the scatter of PGM values is extreme and in some cases even the order of magnitude is in question, certain metal ratios are impossible to be manufactured and therefore are considered to reflect natural samples. Inhomogeneity of PGM distribution is considered as one of the major reasons for the wide scatter of values."
Similar to IPM, Global should have its assay and recovery processes independently verified to obtain the necessary degree of credibility.
GPGI employs a small number of people in its Head Office in Salt Lake City and in its processing plant situated on the Hassayampa property, Arizona. A research and development facility is located in Phoenix. The company has been involved in developing an accurate assaying method and process route for the past 15 years. Shares are quoted on the US Bulletin Board, and are extremely difficult to acquire.
LOCAL MINING HISTORY, GEOLOGY AND ORE CHARACTERISTICS
Local Mining History
The Arizona Department of Mines and Mineral Resources in Phoenix in the state of Arizona maintains all current and historical records and operates a mineral museum. In a telephone conversation with the author, the Director of the Department, Mason Coggin, confirmed that the local area around Phoenix had been a rich gold mining region from the early 1880s. The most famous small mines in the hills and at the foot of the Little Harquahala Mountains were Bonanza and Golden Eagle. Records show past production from this area between 1891 and 1980 was approximately 143,000 oz gold, 90,000 oz silver, 50,000 pounds of copper and 156,000 pounds of lead from 159,000 tons of ore. Gold yield from these deposits amounts to .9 oz per ton. It is worth noting that most of this production occurred between 1888, when the Bonanza mine was discovered, and about 1900. The Bonanza mine is situated in the northern part of IPM's Black Rock North area.
The Department also confirmed the presence of gold in other areas of the state. In the northwest one operating mine, Gold Road, near the town of Oatman, produced 6,000 oz of gold last year, but Mr. Coggin stresses no copper or PGMs. In the southwest a number of gold deposits exist which are in feasibility stage. All of the gold in these deposits has been analyzed by fire assay using a standard flux and recipe of chemicals. Both Mr. Coggin and the Department¹s Mining Engineer, Nyal Neimuth, are adamant that the IPM desert sand property will not produce gold or PGMs as it is unlikely a large deposit of precious metals could go undetected in such an easily accessible area.
Platinum group metals do exist in areas of the United States other than at the Stillwater Mine which is located in Billings, Montana. North of Arizona in the state of Utah, the Bingham Canyon operation is known to produce not only gold, copper and molybdenum, but also platinum, uranium selenium and tellurium as a by-product. This has been noted in "Gold in Porphyry Copper Systems" by Edwin Tooker written in August 1989 which reviews, among other plants, Bingham¹s production between 1982 and 1984.
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