LATEST FROM SPECULATIVESTOCKS.(NOT THE EASTER BUNNY)WOW!!
"COMDuring our last sojourn, we saw that IWA had drifted down to $1.65 and things
were looking a little undecided. Then the stock rapidly rebounded back to the
current $2.35 - $2.50.
There were a number of reasons for the drop and just as many for the rebound.
First, the drop. There was some suggestion from some of the great numbers of
instant experts that have just started to follow this stock that the security
of the core was questionable. This is not to say that it could possibly be
secured
better, however, when every senior geologist from the many senior companies that
are reviewing the core, companies such as Homestake, Teck, Rio Algom, Placer,
Kinross, Newmont, Hunter Dickinson, along with some of the companies that have
property immediately surrounding such as Gold City and Mosquito, along with the
various analysts, we would consider the concerns unfounded.Then there were
undoubtedly
the shorters, as we have commented on before.
After all, this property has not been developed away from prying eyes. It is
in fact one of the most overtly judicious companies in allowing access which
ensures there can be no question as to the validity of the discovery. This is
also enhanced by the nature of the two on site geologists, Ned Read and Richard
Hall. They are only too happy to have a better understanding of the significance
of this discovery by entertaining all views to ensure they take the path of
least
resistance to determining the best way to extend the drilling to ensure the best
results.
Lastly there are supporting views from other geologists close to the picture
such as Shaun Dykes who is also attempting to understand the geology and who
has been providing supporting material to the on site team as well as input from
the senior geologists of Gold City, who have entered into agreements with
Wayside
of their surrounding properties.
What has become very clear is that the Seniors see a possibly very large
deposit,
in the order, possibly of multi-million ounces, in the new discovery, that will
make this a very significant deposit. We expect the many very competent analysts
out there who are now recommending the stock to be a little touched with envy
that they did not follow this story a little more closely as we did during the
past eighteen months. There were some brokers who were steadfast in their belief
this property would amount to more than a hill of beans and they have been
vindicated.
Now we have taken care of concerns about the security of the core, let us
comment
on the possible size. We will not say that this is a certainty, however there
has been controversy for a period of time ( sixty years ) over the differences
between the lode gold on the Wells side and the Placer gold on the Barkerville
side and it would seem that this new discovery could possibly be one source of
the Barkervile deposits.
the new zone is very rich and very wide and in prior commentary we ave suggested
it could extend along the BC vein to the BC shaft. It appears there was a hole
drilled in 1943 that encountered the formation currently being explored and was
never assayed as it was not 'quartz' where the old timers always found gold.
this hole was 1000ft deep and given that the new zone dips approximately 20dg
along strike, it would make sense that it did in fact intercept it. This is of
course over 2000ft from the initial discovery hole.
If this is the case, and there is every reason to believe it is, then the
deposit
size will increase by a factor of at least five, with possibly 4 - 6 million
ounces, in the event this deposit carries on down to the bottom of the BC shaft
at the 1500level, almost 900 feet from the surface. There will have to be a new
hole drilled at this location as we do not believe there is any core from this
old hole available, but there are at least records showing the type of formation
encountered.
This poses an interesting conundrum. Where else would this style of
mineralization
show up? Has it been faulted off? The type of deposits to the north, on the
Mosquito
side, show replacement ore followed by quartz vein type lode at the open pit
location, followed by this new mineralization and then possibly the same
sequence
showing up in a reverse fashion. This would then extend to the south, but it
has never been discovered. There is some suggestion that Williams creek shows
placer and some pyritic material across the other side of the creek, but they
will have to wait till the snow disappears before any further information can
be arrived at. We understand this area has been staked by Mosquito.
In a developing area play such as this there are no bets, as in Hemlo, there
were richer deposits found. Pogo, found by Teck in Alaska, has a flat lying
series
of lenses that could be a similar type deposit and so far no one has found
anything
else in the area, although there are lots of sniffs. This could be similar in
style, just faulted and folded.
There is much work to be done to understand the chemistry and geology and this
will only come about through a very systematic exploration of the property. This
is also something that is not normally carried out by a junior. On the other
hand, the number of seniors that are on site give a very good guide to the
possibilities
and these are the companies who do very serious preparatory work. There have
been many scenarios where a minor discovery has not been recognized as the
forerunner
of further major discoveries because this detective work has not been done. We
believe in this case this detective work will occur and the size of the deposit
will increase exponentially because of it.
What about value? We had originally suggested a value of $3.00 a share could
be made based upon an open pit operation of 3,000 tonnes a day at a little over
100,000oz/yr. This now becomes a figure that we cannot stand by. The ultimate
value will now be determined by the actual size of this deposit and could be
in the vicinity of $10.00share. An unreasonable figure? No, but then it also
could be any where between $3.00 and $10 and if there is 3-5 million ounces it
could be higher.
What about mining methods? all indications would seem to show this could be
mined
by open pit and long hole. Long hole is a very efficient and inexpensive form
of mining and with 3-4 million ounces makes for a very profitable operation.
We have not come to any determination as to whether there will be a fight over
who gets to mine this, however there are more than likely a few plans being
considered
by the seniors as to what value they are placing on this and if the rumors of
Homestake ready to do a PP at $5.00/shr is true, then watch out for fireworks
and a large momentum play on the price. eventually of course it will find its
own level.
Lastly, we have followed this stock very carefuly for 18 months, long before
the Johnny come lately's and once again are pleased to have provided our members
with a profitable situation.
BJ
Speculative Stocks.
As always, while the information provided is considered reliable, there are no
guarantees as to the accuracy and Speculative Stocks takes no responsibility
for any investment decisions made, These being at the sole risk of the reader." |
