You asked: what is the better land bank?
Benjamin Graham Hidden Commodity Land Bank Company
Eagle Plains Resources Ltd. is a mining land bank. In fact, a better name for the company may be "Eagle Mining Land Bank" Eagle is an aggressive junior exploration company operating in Western Canada. Over the past decade, the focus has been to acquire quality exploration projects which have the potential to be economic producers.
Eagle's objective is to increase shareholder value by identifying and securing early-stage mineral exploration opportunities, then attract joint venture interest to finance their development.
The Company controls 38 gold and base metal projects in its mining portfolio, with numerous JV and option partners. The exploration metals include gold, silver, copper, lead, zinc, molybdenum, uranium and industrial minerals. It could easily be classified as Jim Rogers' basket of commodity metals Company. With one stock, Eagle, one can own all these potential exploration metals in the ground in a politically-secure area of the world: Canada. Very unusual and unique.
Here is one of the keys: Starting in early June the Company is spinning off to its shareholders only three (35 left) properties on a one share for share basis. Thus a shareholder in the Company will then own a share in Eagle Plains and a share in new public company Copper Canyon Resources Ltd. This is one of Eagles business strategies. There is a good chance that Copper Canyon Resources Ltd could be acquired in the future by one of the joint venture partners of the properties such as NovaGold (AMEX,TSX:NG). Eagle believes they are very undervalued so the spin off is a move to unlock value of the Company.
Many of the properties are joint-ventured with third parties including NovaGold Inc. (AMEX,TSX:NG), Alexco Resource Corp. (TSX-V:AXR), Blind Creek Resources and Golden Cariboo Resources Inc. These agreements expose Eagle Plains to over $8,000,000 in exploration expenditures over the next five years. In recent years, Eagle Plains has completed option agreements with Billiton Metals, Rio Algom Exploration, Kennecott Exploration, Viceroy Resource Corp. and numerous other junior exploration companies, resulting in over 30,000m (100,000') of drilling and over $9,000,000 in exploration spending on its projects since 1998. During the 2005 season alone, Eagle saw over 11,900m (39,000') of diamond drilling on its properties.
Eagle Plains' business is the acquisition, exploration and development of mineral properties, with a primary focus on exploring precious and base mineral properties located in Canada (see Don Coxe comment below about "politically-secure areas of the world"---these mining properties are thus "premium") through joint venture participations with other resource exploration companies. Bottom line is using other people's money to explore and develop Eagle's properties while retaining an interest and also receiving shares of the joint venture partner. Eagle Plains is able to grow in value without heavy expenditures and share dilution. Eagle also has a large investment portfolio of shares of joint venture partners including Novagold with a billion $ market cap. finance.yahoo.com
For your further due diligence on the Company:
Key 7 minute Interview to listen to understand the hidden value here with Tim Termuende, P.Geo., President of Eagle Plains:
smartstox.com
Company website.
eagleplains.ca
finance.yahoo.com
finance.yahoo.com
Four pages, suitable for sharing, brochure on the company.
eagleplains.ca
Monthly Company Summary:
eagleplains.ca
Shares outstanding 46 million eagleplains.ca
Fully diluted 53 million
Market Cap $ 60 million U.S.
Financial statements: eagleplains.ca
Eagle didn't acquire a Saskatchewan uranium play; they joined one that is fast becoming a cluster frenzy:
investcom.com
smartstox.com
Analyst Reports: Current: eagleplains.ca Other: eagleplains.ca
One of top ten undervalued companies:
eagleplains.ca
April 6, 2006 Stocktalk David Pescod
"We had to corner someone today to make a stock pick, so why not Don McInnes. McInnes is currently the hyper active leader of a group of companies-Blackstone Resources, Western Keltic (which has pulled off a real coup, hiring John McConnell as their President-which could be a key move in getting Kutcho Creek moved into development stage) and Plutonic Power. McInnes today suggests that the markets are attracting lots of new money into the market (that's an obvious) and he suggests that it's not just him and us as players in the market anymore.
He suggests "this move in commodity prices looks very real to him and suggests it's going to last for several years". As far as making an independent stock pick that will make us an honest buck, using the usual rules-you can't pick your own stock or one he is involved in (although he is an investor) he comes up with Eagle Plains. He suggests that the stock is going to be divided up between its different assets here shortly and figures the different assets are probably worth more divided than a single one. He wouldn't be surprised to see majors take out one of those smaller assets."
Investor Relations: Mike Labach Toll Free: 1-866-Hunt Ore (486-8673) email: mgl@eagleplains.ca
Copper Canyon joint venture with Novagold eagleplains.ca
In January 2005, joint venture partner NovaGold Resources Inc (NG: AMEX, TSX) announced results on Eagle's Copper Canyon property, outlining an Inferred Resource of 165 million tonnes grading 0.54 g/t gold, 7.15 g/t silver and 0.35% copper containing 2.86 million ounces of gold, 37.9 million ounces of silver and 1.16 billion pounds of copper. The Inferred Category resource estimate was completed by independent engineering firm Hatch Ltd. of Vancouver, B.C., Canada. . novagold.net
The Copper Canyon deposit is open in 3 directions. NovaGold anticipates commencement of construction in 2007 and commercial production 2010-2011 on their adjacent Galore Creek project. Novagold is earning a 80% interest in Copper Canyon with the remaining 20% is Eagles to be spun off into new public company Copper Canyon Resources Ltd. NovaGold may earn a 60% interest in the Copper Canyon project from EPL by completing C$3 million in exploration expenditures, issuing a total of 296,000 shares of NovaGold and making property payments totaling C$250,000. NovaGold may earn an additional 20% interest in the project for a total of 80% by paying Eagle Plains C$1 million and completing a feasibility study by September 2011.
Eagle Plains has announced a proposed plan of arrangement (commonly referred to as a "spin-off" or "split") whereby the Copper Canyon, Abo and Severance properties will be transferred into a new company, incorporated under the name Copper Canyon Resources Ltd. ("Copper Canyon").
Eagle Plains shareholders on record as of the Effective Date (anticipated being the beginning of June, 2006), will receive one share of Copper Canyon for every one Eagle Plains share held. Concurrently, Eagle Plains will transfer $400,000 cash to Copper Canyon to provide working capital and exploration funding. Copper Canyon will apply to have its shares listed on the TSX Venture Exchange.
The reorganization is designed to improve the identification and valuation of the three properties, enhance Eagle Plains's ability to divest them through simpler corporate ownership and to separately finance and develop its other projects, selectively reducing stock dilution.
The proposed reorganization is subject to approval by shareholders on record as of late April 2006 by not less than 66 2/3% of the votes. The votes are to be cast at the Annual & Special General Meeting projected for late May 2006. Final Court and Exchange approval is anticipated shortly after the meeting.
The Share Distribution Effective Date, will determine those Eagle Plains shareholders who are to receive corresponding shares in the new Copper Canyon Resources. This date is now projected for the beginning of June, 2006. The exact dates will be confirmed as soon as available.
The January 2006 metal resource table for Novagold which contains the Copper Canyon Resource. Novagold shows their 80% interest in Copper Canyon which they could earn by 2010 - 2011 after funding the full feasibility study and a production decision. EPL is not required to contribute any capital during this stage. Table: novagold.net
Copper Canyon is a good investment for both Novagold and Eagle Plains shareholders. Some figures estimate a net present value of $1.50 per EPL share for the Copper Canyon Property alone. Using a +-25% accuracy, this gives us a value range of $1.12 to $1.87 for each new Copper Canyon share. EPL shares last traded at $ 1.60 CDN or $ 1.40 U.S..
Some math:
Currently Eagle has 3 resources identified on 3 of it's 38 properties, the majority of the resources are in the inferred category of confidence and are as follows:
Copper Canyon - 1.16 billion lbs Copper, 38 million Ozs Silver and 2.86 million Ozs Gold
Blende - 1.3 billion lbs Zinc, 1.2 billion lbs Lead and 38 million Ozs Silver
Abo - 220,000 Ozs Gold
Total - 3.08 million Ozs Gold, 1.16 billion Lbs Copper, 76 million Ozs Silver, 1.3 billion Lbs Zinc and 1.2 billion Lbs Lead
Metals per share for the known resources currently held by Eagle for each share issued (46 million) is as follows: 0.067 Oz Gold, 25.21 Lbs Copper, 1.65 Oz Silver, 28 Lbs Zinc and 26 Lbs Lead.
Market prices of commodities are: Gold $ 595.30 Oz. Silver $ 12.15 Oz. Copper $ 2.61 Lb Zinc $ 1.29 Lead .535 Lb. Inferred resources such as Eagles go for a small fraction of the market price until such metals are in the proven category.
Proven reserves at valued in the ground (the above have yet to be classified as reserves: Gold $ 250 ounce Silver $ 5 ounce Copper $ 1.25 pound Zinc $ 1.00
Finally a summary from:
Don G. M. Coxe
Global Portfolio Strategist, BMO Financial Group
Global Portfolio Strategist, Harris
Chairman, Harris Investment Management, Inc.
Chairman, Jones Heward Investments Inc.
corporate.bmo.com
February 23, 2006
We repeat the approach to investing in commodity stocks that we presented to the CFA Institute in December:
Buy oil, gas and mining companies on the basis of the lifespan of unhedged reserves in the ground in politically-secure areas of the world.
The longer-lived the reserves, the more a company is worth. A deep value investor should not price these stocks primarily on their current p/e ratios, but on the values deep in the ground that will be realized over coming years-and coming generations.
IMHO Eagle as a mining land bank qualifies with flying colors for the future.
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