Month-end buying opportunity?
PATAGONIA CAPITAL CORP. ANNOUNCES:
Starfield Resources, Inc. ("SRU" on ASE)
Suite 420 - 625 Howe Street
Vancouver, B.C., Canada V6C 2T6
Phone: (604) 608 - 0400 Fax: (604) 608 - 0344
website: starfieldres.com
Recently-announced geophysical results indicate continuous mineralization
over 7 kilometer strike length plus other sizable zones running parallel to
the Main Zone – far bigger than Voisey's Bay !!!
Phase I exploration drilling program at Ferguson Lake is underway; assays
result expected soon!!
The Ferguson Lake project has economic Ni & Cu ore grades, remains open in
all directions, and has the potential to host a 150-million tonne,
world-class deposit
Company Profile
Starfield Resources Inc. (SRU on the Alberta Stock Exchange) is a
Vancouver-based mineral exploration company focused on the acquisition and
development of world-class precious and base metal projects in western
Canada. The company was incorporated in 1994 and taken over in 1997 by
Canadian mining and financial professionals with strong ties to North
American and European capital markets.
Starfield Resources' flagship project is the Ferguson Lake Ni-Cu-Co
property, a deposit previously-owned by Inco that hosts significant ore
reserves and that also has a very high probability of hosting a world-class
platinum-palladium deposit.
On May 21st, SRU reported that geophysical surveys had traced the Main Zone
to depths of between 200 to 300 meters over a strike length of more than 7
kilometers. These results indicate a tremendous extension from the known
deposit explored in the 1950's by Inco, who defined a resource of 6.4
million tonnes grading 0.87% Cu and 0.75% Ni over a strike length of just
730 meters.
SRU's geophysical program also detected sizeable new anomalies running
parallel to the Main Zone. Based on the size and strength of these new
zones, it is entirely likely that the ultimate size of Ferguson Lake could
be larger than Voisey's Bay!
Presently, SRU is in the midst of an initial 1,200 meter drilling program;
the first two holes have been completed, and the cores are on their way to
an independent assay lab in BC for analysis. We understand that additional
news will be released prior to months-end concerning Dr. Nick Carter's
interpretation of the UTEM Electromagnetic and Magnetometer geophysical
surveys
The Property
The Ferguson Lake property, located 160 kilometers southwest of Baker Lake
and 190 km west of the port of Rankin Inlet in the Nunavut Region of the
Northwest Territories of Canada, is comprised of three mineral claims and
one prospecting permit totaling over 23,000 hectares. On-site
infrastructure includes an airstrip and a fully equipped 45-person base
camp. The local and provincial governments are regarded as being strongly
pro-mining.
On February 9th, SRU entered into an agreement to acquire a 100% interest
in the Ferguson Lake project (subject to a 3% NSR) by paying C$75,000 and
issuing a total of 4,250,000 performance shares to be earned out at the
rate of one share for each C$0.40 of expenditures on the property.
The Company is required to expend C$500,000 by December 31, 1999 and a
further C$1,200,000 after it receives an Engineering Report recommending
the completion of a Phase II work commitment. Starfield Resources has the
right to purchase 1% of the 3% NSR for C$1,000,000 following receipt of a
positive feasibility study recommending commercial production.
Prior Work at Ferguson Lake
Ferguson Lake was discovered in the late 1940s by Canico, a subsidiary of
Inco.
During the 1950s, over C$15 million (in current dollars) worth of
exploration work was undertaken, including over 37,500 meters of surface
diamond drilling, reconnaissance geological mapping, airborne and ground
geophysical surveys and two bulk sample tests.
During this period, Inco evaluated Ferguson Lake only for its nickel and
copper potential. More importantly, Inco's drilling was shallow, with only
a few holes penetrating below the 100 meter level.
Following discovery of the Thompson (Manitoba) nickel deposit in the
mid-1950s, work at Ferguson Lake ceased, and the property was kept in
inventory. In 1992, Inco allowed the mining leases to lapse and the
Ferguson Lake Syndicate acquired the property by staking in 1997.
The 1998 work program (principally detailed surface sampling and mapping)
completed by the Ferguson Lake Syndicate resulted in the discovery of
several new zones of mineralization, and was successful in extending the
Main Zone further to the west. The results of the 1998 program not only
demonstrated the exploration potential of the property, but the
significance of the property's PGE potential.
Geology & Ore Reserves
The Ferguson Lake deposit is hosted within an Archean ultramafic complex
with a known strike length of over 9 kilometers that ranges in width from
50 to 200 meters. Mineralization consists of two main types: massive
brecciated sulphides and parallel stringer mineralization. The
mineralology is predominantly chalcopyrite-pyrite and pyrrhotite.
Drilling conducted by Inco in the early 1950s along a small portion of the
Main Zone (about 730 meters) delineated a drill-inferred resource of 6.4
million tonnes grading 0.87% Cu and 0.75% Ni (exploration records show that
the drill core was only assayed for Ni and Cu - the cobalt, platinum and
palladium content of this zone is presently unknown, although smelter
reports do make reference to a 1.69 gm/MT precious metals content – the
exact composition of which is unknown).
The resource zone - indeed, the entire Ferguson Lake deposit - is open
along strike and at depth.
Nickel and copper grades are significantly higher in the eastern portion of
the deposit. Step-out drilling along strike 4 kilometers to the east of
the indicated resource returned a drill intersection of 23 meters averaging
1.28% Ni and 1.08% Cu. Detailed surface sampling has verified these higher
grades over a sizable area.
Limited exploration work in 1998 identified the South Discovery Zone, which
can be traced on surface for over 1,000 meters; this zone remains open
along strike. Surface sampling returned values of up to 1.68% Cu, 0.91%
Ni, 2.44 g/t Pd and 0.14% Co over widths of 9.5 meters.
What makes Ferguson Lake such an exciting exploration play is the fact that
Inco did not report assays on any of the 37,500 meters of core for
platinum, palladium or cobalt - if indeed they assayed for it at all.
Platinum / Palladium Potential
Part of the excitement surrounding Ferguson Lake is the possibility that
the project may host mineable platinum and palladium reserves.
Most nickel deposits have some associated platinum / palladium found in the
same system of mineralization. However, when Inco drilled Ferguson Lake in
the early 1950s, there wasn't much interest in PGE's, and the core assays
were not reported for Pt or Pd.
During 1986 and 1987, Inco granted Homestake Mineral Development Co.
permission to conduct a rock sampling program along the 5½ mile strike
length of the Main Zone. Homestake reported assay results of up to 2800
ppb Pt and 5600 ppb Pd from rock samples taken from the hornblendite hosted
gossans.
Limited follow-up work last year by the Ferguson Lake Syndicate, confirmed
the Homestake results, returning values as high as 4.55 g/t palladium. The
Syndicate's work also resulted in the discovery of a new sulfide-bearing
hornblendite unit, the South Discovery Zone, located five kilometers to the
south of (and running parallel to) the Main Zone.
The South Discovery Zone, which has been traced on surface for over 1,000
meters, remains open along strike. Surface sampling returned values up to
1.68% Cu, 2.91% Ni, 2.44 g/t Pd and 0.155% Co. Mineralization appears to
be identical to that of the Main Zone, with massive sulfides on surface up
to ten meters thick.
Subsequent to the discovery of the South Zone, Starfield Resources expanded
its presence in the area to over 23,000 hectares of mineral claims.
Capital Structure & Trading Range (as of May 25, 1999)
Issued & Outstanding: ~ 10.2 million shares
Fully-Diluted: ~ 14.6 million shares (excluding property acquisition)
Float: ~ 4 million shares
Current Bid & Ask: C$1.20 by C$1.23
Last trade (05/25/99): C$1.23
Strong Financial Position – A Recent Financing Has Cashed-Up The Company
On May 5th, Starfield Resources announced that it had completed a C$750,000
Special Warrant financing. Of the proceeds, a minimum of C$500,000 has
been allocated to the Phase I exploration work program now underway at
Ferguson Lake, with the balance applied to working capital.
SRU is now in a position to quickly raise an additional C$1.35 million
based on in-the-money warrants and options currently outstanding. This sum
would be more than sufficient to cover the C$1.2 million cost of the Phase
II exploration program and allow SRU to complete the Ferguson Lake earn-in
agreement. More importantly, this means that work can continue
uninterrupted throughout 1999, without the delays most companies face each
time that they have to go to market for additional funding.
Why You Should Consider Adding SRU To Your Investment Portfolio Right Now
!!
Ferguson Lake is not a grass roots play where several years of exploration
are required to begin outlining a resource, but rather, a situation where
prior work (by Inco) has established a 9 kilometer long contiguous
mineralized structure that is open along strike and at depth.
Over the next year, SRU intends to drill off and establish the ultimate
tonnages and grades of the deposit. The geology and structure of Ferguson
Lake are such that the ultimate size of the deposit might prove to be on
the order of 150 to 200 million tonnes – truly world-class potential.
Above and beyond the bulk tonnage potential is the allure of the as-yet
unknown platinum, palladium and cobalt content of the Ferguson Lake
deposit. Surface sampling has returned impressive grades, and should this
summer's drilling return similar (or better) grades be shown over mineable
widths, SRU might quickly become a prime takeover target.
We expect positive results from Ferguson Lake will come quickly - SRU has
already completed their first two core holes, with assay results from an
independent lab expected in early June.
As an investment, we expect SRU shares to perform in a similar manner to
Argentina Gold. As was the case with ARP's Veladero project in Argentina,
Starfield Resources' shares should rapidly increase in value as the
reserves are expanded - in particular, as the platinum and palladium grades
are established.
How high might SRU's share price go?
Let's take Voisey's Bay as an example.
Going back a few years to the last big nickel rush, Diamond Fields ran to
C$170 per share on the strength of it's Voisey's Bay discovery (and no
PGE's !). If SRU shares perform only one-tenth as well as Diamond Fields
(a very conservative estimate, given the great number of similarities
between Ferguson Lake and Voisey's Bay), then we are still looking at
potentially C$17 / share!
Starfield Resources' management has spent the last few months presenting
the deal to mining analysts, retail brokers and institutional fund managers
throughout Canada and Europe, building an incredible base of support.
Given the high levels of interest among the major Canadian brokerage firms,
everyone expects that SRU will trade at considerably higher levels as
further exploration results are announced.
With cash in the till and geophysical results indicating a truly
world-class deposit at Ferguson Lake, we view SRU as a STRONG BUY at
current prices; SRU offers investors exceptional short and long term upside
potential . As retail and institutional investor awareness of Starfield
Resources increases (particularly as David Williamson & Associates gets
involved), and further drilling results from the Ferguson Lake property are
released, SRU's shares should move much, much higher.
For more information, please contact:
Investor Relations
Toll-Free: (877) 233 – 2244
E-mail: info@starfieldres.com
Disclaimer
Patagonia Capital Corp. ("Patagonia Capital") is not a Registered
Investment Advisor or a Broker / Dealer.
Patagonia Capital has independently prepared this report, drawing upon a
range of public news and information sources. Subsequently, Patagonia
Capital has contracted with reputable, independent, third party
distribution services to disseminate this report by e-mail to the
international investment community.
This electronic communication reflects opinions from Starfield Resources,
Inc. (the "Company"). Readers are advised that this publication is issued
solely for information purposes and is not to be construed as an offer to
sell or the solicitation of an offer to buy. The opinions and analysis
included herein are based on sources believed to be reliable and in good
faith but no representation or warranty, expressed or implied, is made as
to their accuracy, completeness or correctness. This information is not
intended to be used as the sole basis of any investment decisions, nor
should it be construed as advice designed to meet the investment needs of
any particular investor. The foregoing discussion contains forward-looking
statements that are based on current expectations and differences can be
expected.
The information contained herein has been provided by the Company to
Patagonia Capital Corp. for information purposes only; in addition, the
information contained in this report is not intended to be a complete
discussion of information regarding some of the current and/or intended
business activities of the Company. Readers are urged to consult with
independent financial advisors with respect to an investment in the shares
mentioned herein. Investors should review a complete information package
on the Company which should include, but not be limited to, the Company's
annual report, quarterly report, press releases, as well as all regulatory
filings. All information contained in this report should be independently
verified with the Company mentioned herein. Any opinions expressed in this
report are statements of judgment as of the date of publication and are
subject to change without further notice, and may not necessarily be
reprinted in future publications or elsewhere. Neither Patagonia Capital
nor its officers, directors, partners or employees / consultants accept no
liability whatsoever for any direct or consequential loss arising from any
use of this report or its contents.
Patagonia Capital advises the readers of this document that it has not
received any fees or other compensation from Starfield Resources for its
efforts in researching, writing, presenting and disseminating the
information contained herein. Prior to Patagonia Capital disseminating
this information, the Company reviewed and approved the contents hereof.
Patagonia Capital, its officers, directors, partners and employees /
consultants may profit in the event the shares of the Company increase in
value. These positions may be liquidated from time to time even after
Patagonia Capital, its officers, directors, partners and employees /
consultants have made positive comments on the Company.
THE READER SHOULD VERIFY ALL CLAIMS AND DO THEIR OWN DUE DILIGENCE BEFORE
INVESTING IN ANY SECURITIES MENTIONED. INVESTING IN SECURITIES IS
SPECULATIVE AND CARRIES A HIGH DEGREE OF RISK.
We encourage readers in the USA to review the investing information
available with the Securities and Exchange Commission ("SEC") at
sec.gov. and or the National Association of Securities Dealers
("NASD") at nasdr.com The NASD has published information on how
to invest carefully at its website. A complete listing of the Company's
public filing's with the Alberta Stock Exchange (including news releases
and financial statements) can be viewed at the SEDAR web site, located at
sedar.com
|
