Dead money? I don't think so. DLJ just upgraded copper stocks.
Third quarter results
Western Copper Holdings Limited
WTC
Shares issued 13,970,000
1998-09-09 close $2.26
Thursday Sep 10 1998
Mr. F. Dale Corman reviews the company
The following is a review of the company's activities during the third quarter ended
June 30, 1998.
San Nicolas Deposit
Teck Corp., at its AGM held on June 3, 1998, announced preliminary mineable
open pit reserves for the main zone of 72,000,000 tonnes grading 1.35 per cent
copper, 2.27 per cent zinc, 30.0 grams of silver per tonne and 0.53 grams of gold
per tonne. This reserve includes an upper zone of 19,146,000 tonnes having an
average grade of 0.79 per cent copper, 6.15 per cent zinc, 73 grams of silver per
tonne and 1.32 grams of gold per tonne, a middle zone of 14,964,000 tonnes
having an average grade of 0.72 per cent copper, 1.90 per cent zinc, 24 grams of
silver per tonne and 0.57 grams of gold per tonne and a lower zone containing
37,893,000 tonnes having an average grade of 1.89 per cent copper, 0.46 per
cent zinc, 11 grams of silver per tonne and 0.11 grams of gold per tonne.
Preliminary metal distribution indicates that the upper zone contains 72 per cent of
the zinc, 16 per cent of the copper, 64 per cent of the silver and 67 per cent of the
gold and that preliminary metal recoveries for this zone are 86 per cent for zinc,
63 per cent for copper and less than 20 per cent for silver and gold. The middle
zone is estimated to contain 17 per cent of the zinc, 11 per cent of the copper, 17
per cent of the silver and 23 per cent of the gold. Preliminary metal recoveries for
this zone have been estimated at 73 per cent for zinc, 60 per cent for copper and
less than 20 per cent for silver and gold. The lower zone, which is primarily
copper, contains 73 per cent of the copper having an estimated preliminary
copper recovery of 84 per cent. A lower zone of 11,450,000 tonnes, which has
yet to be defined, grading 1.62 per cent copper, 0.48 per cent zinc, 8.0 grams of
silver per tonne and 0.06 grams of gold per tonne is not included, at this time, in
the mineable reserves. In-fill drilling, for engineering purposes has confirmed the
continuity of the deposit both as to metal content and tonnage. Teck is currently
completing a four hole directional drill program to more precisely define ore
deposit boundaries and provide needed information on pit wall stability.
Based on preliminary recovery figures and the 27 per cent interest of Western in
the San Nicolas deposit, each of the 14.3 million shares of Western outstanding
represent 57 pounds of zinc, 34 pounds of copper, 6.7 grams of silver and 0.13
grams of gold.
Penasquito Project
Next to its San Nicolas interest, management considers the Penasquito property
to be the best undeveloped silver property in Mexico and the company's second
most important asset. Diamond drilling to date at Chile Colorado has defined an
elliptical mineralized zone with minimum dimensions of 400m length, 250m width
and 150m thickness with the potential to expand this by several hundred metres
based on limited diamond drilling and a CSMAT geophysical survey.
Management has estimated, based on this limited information, that a potential
resource of 35 to 200 million metric tonnes, averaging 70-90 grams of silver per
tonne, 0.3-0.5 grams of gold per tonne and 2.0-3.0 per cent combined lead-zinc,
is possible. Diamond drilling is scheduled to resume on completion of the
geophysical survey.
Faja de Plata Properties
Western has the option to earn a 100 per cent interest in the Faja de Plata
properties, containing in excess of 1.2 million acres, subject to a 51 per cent
back-in right held by Kennecott Exploration Co. Limited geophysics on two of
these properties, Villa de Ramos and San Jeronimo, suggests that these properties
have considerable potential for the discovery of massive sulphide deposits similar
to San Nicolas. Diamond drilling at San Jeronimo has identified high grade silver,
lead and zinc mineralization over narrow intervals in two diamond drill holes and is
thought to represent both massive sulphide and epithermal vein style
mineralization. The San Jeronimo property, in excess of 27,500 hectares (67,900
acres) in size, is considered an excellent exploration target and will be subjected to
further geophysics and drilling once the current information has been analyzed. The
Faja de Plata properties as a whole represent one of the largest and best land
packages in the State of Zacatecas, and will be the primary focus of Western's
exploration outside of San Nicolas and Penasquito.
Financing
On June 5, 1998, Western announced the closing of a 200,000 unit private
placement, at $7.20 per unit, by the issuance of 200,000 shares and 200,000
warrants to Queenston Mining Inc. Each warrant entitles the holder to acquire an
additional share of the company at $9.20 per share until June 5, 2000.
Operations
There was a loss of $564,633 for the nine months ended June 30, 1998, an
increase of $214,768 over the loss for the nine month period ended June 30,
1997. The increase arose from a much increased level of investor relations
activity, a general increase in office and service requirements and a greater need
for legal and accounting services as a result of Western's participation in the San
Nicolas discovery.
(c) Copyright 1998 Canjex Publishing Ltd. canada-stockwatch.com |
