SPEC BUY Pacific Northwest Capital Corp. (PFN : CDNX : Halted :
Issued 13.9M) Currie
* Announces encouraging PGM drill hole assays from River Valley
project in Ontario
* Rated a SPECULATIVE BUY for short-term, high-risk trading accounts
only
Goldcorp Inc. (G.A : TSE : $6.75) Brian Christie (416) 869-7918
Johann Aler, Associate (416) 869-3650
Recommendation: BUY
12-month target price: C$11.00
Web site address: www.goldcorp.com
52-week price range: C$12.50-6.05
Shares O/S: basic 72.6M
fully diluted 77.5M
Major shareholder: CSA Mgmt., 13.5%
Weekly trading volume: 1.34 M shares
Working capital: US$55.8M
Long-term debt: US$0.0M
Market capitalization: US$336.1M
Adjusted enterprise value: US$280.3M
A development drift has been driven 170 ft. along one of the
high-grade structures in the Main zone at the Red Lake mine. Channel
sampling along the 170 ft. section yielded an average grade of 6.95
ounces per tonne (ozs./t) gold (uncut) over a true width of 8.0 ft.
This compares well with assay values from seven holes in the same area
that yielded an average grade of 5.83 ozs./t gold (uncut) over 8.5 ft.
Although the company did not release muck sample results, samples
analyzed to date are reported to be of similar grade to the channel
samples.
We find the sample results highly encouraging, and it would appear
that the mineralized zone will likely be a higher grade than indicated
by drilling. However, it should be pointed out that the average drift
sample values are somewhat misleading. The northwestern half of the
drift was considerable lower grade than the southeastern half. This
serves to highlight the variability of the mineralization along strike.
We believe that this variability will also be encountered in the
vertical plane of the deposit.
The development mining was done using a resuing technique when
necessary. Resuing consists of mining the ore and the waste
separately to provide the minimum mining width for the equipment and
to reduce the dilution of the ore. The ground conditions have been
good and the only support required is conventional rock bolts and wire
mesh.
The construction of the mine is on schedule and on budget. The
project is now 66% complete (mill 74%, underground 60%, and surface
67%). Of the US$56.2 million CAPEX, US$35.9 million has been spent to
date. The company hopes to begin commissioning the mill with
development ore in July, with full production expected in November.
We estimate that the Red Lake mine will produce between 40,000-60,000
ounces in 2000 at a cash cost of US$100/oz.
On the labour front, a mediator has been appointed through the
assistance of the Ontario Ministry of Labour. Meetings to settle the
strike are in progress, but Goldcorp Chairman Robert McEwen indicated
that "the odds of a settlement are no better than a coin toss." In
order to meet the scheduled start date, a contractor will be chosen
within the next two weeks. McEwen also said that even with a
settlement, the company might still opt to use a mining contractor.
Goldcorp appears well on its way to bringing the Red Lake mine into
production later this year and we expect that the mill grade will
exceed the reserve grade. However, a non-strike settlement could
prove problematic to the operation of the mine over the longer term.
Nonetheless, we are maintaining our BUY rating on Goldcorp's shares
with a C$11.00 price target
Global Investment.com (GIV : CDNX : $1.72) David Wong (604) 643-7739
Recommendation: SPECULATIVE BUY
12-month target price: $4.00
Web site address: www.investment.com
52-week price range: $2.74-0.40
Shares O/S: basic 21.7M
fully diluted 30.5M
Major shareholders: Mgmt. & Directors, 12.1%, Stockhouse.com, 13.1%
Weekly trading volume: 2.0M
Burnrate: $100,000/month
Cash position: $3.0M
Market capitalization: $52.5M (f.d.)
Global Investment.com (GIV) signed a co-marketing and reseller
agreement with Sierra Wireless (SW : TSE) to sell its award winning
wireless AirCard 300 to subscribers of Investment.com Anywhere. GIV
will also be selling Sierra's wireless products through the
Investment.com website, in addition to other sales and marketing
strategies. To attract more users to Investment.com Anywhere, during
the trial phase GIV will offer this service free to users who purchase
the AirCard 300, which retails for about C$800. Investment.com
Anywhere, which is currently undergoing beta testing, offers secure
and fast wireless access to the Internet via laptops and Windows CE
hand-held devices. The company signed a license agreement in early
March with Infowave Software (IW : TSE) to offer its client/server
software solution. GIV expects to have Investment.com Anywhere
available for commercialization by Q2/00.
Target Market
Due to the high start up costs of wireless connectivity, early
adopters who can afford the service will be commercial users versus
mass consumers. The company is initially targeting Investment.com
Anywhere and Sierra's products to its recently acquired magazine
customer base. Over the past three months GIV acquired Planning for
Profits magazine (now called Investment.com Magazine), Mutual Fund
Review Inc., and Financial Player Inc. (now Investment.com Mutual Fund
Review). The company believes that the magazine's client base, who
are financial planners and investment advisors, will be prime
candidates for wireless Internet access to financial information and
email.
The Wireless Internet
With market leaders such as AOL, Yahoo, and Amazon offering wireless
access to their portals via Palm and other wireless devices, GIV is
following suit to become a reliable source of financial content over
the wireless Internet. As the demand and growth towards wireless
access continues, early entry will be a competitive advantage to help
increase and maintain "eyeballs".
We are encouraged by the developments moving forward with GIV and
maintain our SPECULATIVE BUY recommendation with a 12-month target
price of $4.00.
Cumberland Resources Ltd. (CBD : TSE : $1.70) Graeme Currie (604)
643-7405
Recommendation: SPECULATIVE BUY
Web site address: www.goldmin.com
52-week price range: $3.10-1.18
Shares O/S: basic 26.3M
fully diluted 29.8M
Major shareholder: A. Aronowicz, 13%
Weekly trading vol.: 116,400
Working capital: $6.0M
Long-term debt: nil
Market capitalization: $44.7M
Increases Meadowbank's Resources by over 340,000 ounces to 2.07
million ounces in situ
As part of the company's pre-feasibility work, which is being lead by
MRDI Canada, Cumberland has completed a re-evaluation of the various
resource categories for its 100%-held Meadowbank project. The review
incorporates all of the 1999 drilling as well as the surface
trenching, which further exposed a high-grade portion of the deposit
lying just below surface. This part of the Third Portage deposit is
best described as a nose-fold where the deposit rolls back onto itself.
The fold is within several metres from surface and grades in the 7-9
grams/tonne (g/t) Au range and may represent up to a year and a half
of production feed for any proposed operation.
The resource evaluation has resulted in a 340,000 ounce increase to
2.07 million ounces at a cut grade. The cut-off grade that was
employed varies from zone to zone. An un-cut resource of 2.26 million
ounces was calculated but we do not view this as a supportable
resource for pre-feasibility work. The upgraded calculation for each
of the zones is duplicated below (available only on the
website,http://www.canaccord.com/r_nul_00.html , in the PDF file
version).
The bulk of the resource is outlined with a high degree of confidence.
These figures are now to be incorporated into the pre-feasibility
study that, we understand, is due out shortly. Our expectations are
that base case studies incorporating a 2,000 tonnes per day (t/d)
facility with recoveries presently defined at 92% will be used with
all-in CAPEX at just below US$100 million. Previous scoping studies
indicated cash costs in the range of US$160-180/oz. and we maintain
that such numbers are attainable. The majority of all mining will be
by open pit. Conversations with the company confirm that a review of
all operating parameters is ongoing with emphasis on pit optimization.
Part of this exercise is focused on defining an economic cut-off grade
upon which pit design would be constructed.
Does exploration Leverage Exist with Meadowbank and Meliadine West (20%
carried interest)?
In January, the company announced the acquisition of some 30,000
hectares of land due north of Meadowbank. This ground extends the
Meadowbank trend and initial surface exploration yielded very
encouraging results. For example, sampling of the Vault prospect
resulted in 46 grab samples yielding values from 1-45 g/t Au in a 400
by 200 metres area. For 2000, exploration is set to resume on this
extension by April and will include an initial drill program in the
spring quarter. We view this as positive given that, in general,
market interest in junior mining stories appears to be concentrated on
early stage exploration of prospective large targets. The Vault zone,
and others within the Meadowbank North property, could fill this
requirement.
Exclusive of the Meadowbank North property, Cumberland's shares remain
inexpensive and we continue to view this Canadian-focused junior as
representing one of the best value plays in the junior exploration
theatre. For further background we reference the reader to our
November 17, 1999 Junior Mining Millennium Report.
Pacific Northwest Capital Corp. (PFN : CDNX : Halted) Graeme Currie
604) 643-7405
Recommendation: SPECULATIVE BUY**
Web site address www.pfncapital.com
52-week price range: $2.15-0.30
Shares O/S: basic 13.9M
fully diluted 18.8M
Major shareholder: Harry Barr, 30%
Weekly trading vol.: 340,000
Working capital: $2.0M
Long-term debt: nil
Market capitalization: $27.2M (at last trade)
Drilling at Dana Lake Yields positive PGM Values over material widths
Pacific Northwest Capital (PFN) holds a 100% interest in the River
Valley property located 70 km. east of Sudbury. Exploration over the
past year focused on the Dana Lake area where the company has defined
a geologically prospective intrusive complex. In 1999, induced
polarization (IP) geophysics outlined a number of targets. This was
followed by surface sampling, which yielded PGM values in the 1.0-3.0
grams/tonne (g/t) range. The company has just completed 13 holes in a
2,000 metre budget and yesterday reported the assays from holes RV-01
to 03 inclusive. These assays are as follows:
(table not available in email version. Please consult the PDF file
version, available at canaccord.com for the
complete report)
All holes were drilled at 45 degrees and estimated true widths were
not reported. The holes are 50 metre step-outs running from north to
south and indicate that the body is plunging in a southerly direction.
The vertical depth to upper contact of the zone is 22, 66, and 66
metres on holes 01 through 03, respectively.
PFN is the project operator. The property is optioned to Anglo
American Platinum (Amplats), which may earn up to a 65% interest in
the property by funding $4.0 million in exploration, completing a
feasibility study, and by financing the project through to production.
Initial Results Confirm Target Potential
The Dana Lake area is targeted as having the potential to host a
multi-million tonne PGM deposit and initial results are favourable.
The assays did not break out the palladium (Pd) content, but it was
indicated that Pd grades ranged roughly 2:1 to 3:1 over platinum (Pt).
The Au content was also not broken out. Because of the early stage of
exploration it is impossible to define this prospect past that of a
promising early stage drill success. The zone thickness and grade
confirm bulk-tonnage potential. The assays from holes 04-13 are due
over the next two weeks. Holes 01 to 10 cover a potential 400 metre
strike on the northern IP target while 11-13 cover a 100 metre strike
of the southern target. The two IP anomalies are separated by 600
metres. The next phase of drilling is not scheduled to begin until all
assays are in and correlated, which will likely be late April.
With a market cap of $27.2 million at its last traded price of $1.96,
the speculative price premium for this very early stage prospect is
not too high when calculated on a 100% basis, assuming Anglo American
were to earn its full interest. That figure would equate to $77
million. Such a premium is not unusual though, given the exploration
leverage. For high-risk, speculative trading accounts only, we would
anticipate the market interest to remain active over the next several
weeks. Expect substantial price volatility as there are numerous
questions that remain unanswered. It is impossible to define target
price levels at present because of the limited drill data, but it is
very likely that PFN will become a key focus for a resource market
that has been searching for a new, potentially large discovery. The
Canadian address also enhances area play potential. Two juniors in the
immediate area of this property are Aquiline Resources Inc. (AQI :
CDNX) and Mustang Minerals Corp. (MMIN : OTC).
On the following page we provide a list of the juniors that we
monitor, all of which are actively exploring PGM prospects.
Junior Mining Companies Exploring PGM Prospects |
