ANOTHER RECENT BUY RECOMMENDATION !!!
FROM “Resource Opportunity” October 1998 Edition
Emgold Mining Corp
Reprinted from the October 1998 issue
Emgold has a gold resource of 3 million oz, with excellent potential to expand on that. Emgold's current market cap values that gold at only US$0.75 per oz.
Emgold's Idaho-Maryland mine was shut in 1956 after nearly 100 years of production. A study by a highly respected mining engineering firm concluded that the remaining gold, in the area accessible by current workings, is 3 million oz. Even at the current gold price, this project looks very attractive, especially since the underground workings are already in place to re-start production.
When gold prices were dropping, this project was ignored by investors. Now with the price beginning to rise, Emgold's project promises to attract a lot of attention.
Frank Lang, the president, is a well regarded and extremely successful mining executive with the ability to move Emgold's project forward.
Shares o/s: 11.6 million
Fully diluted: 16.1 million
Warrants and options exercisable at: $.22 to $3.45
Price Sep 30: $.32 52 weeks: $.60 / $.13
Market cap: $3.7 million
Working capital: -$.6 million
Trades: EMR – VSE
SEC: 12g3-2(b) #82-3003
While Emgold's project has been almost totally ignored in the market, it is one of the best advanced-stage gold projects in North America, and gives investors a chance to buy gold at US$0.75/oz. It is located in the heart of California's mother-lode country, an historic mining area.
Resource estimates based on 71 miles of workings and 220,000 feet of drilling
Prior to its closing in 1956, the operators were searching for more high grade veins that would keep the mine going in the face of mounting costs and with the gold price at $35/oz. Since 1862, the mine recovered 2.4 million oz from 5.5 million tons.
With modern computer based mine modeling it is now possible to properly assess the mountain of data generated on this project.
A comprehensive study was completed by highly respected mining engineering firm James Askew Associates Inc. in 1994. The firm determined that the remaining resource is 9.1 million tons, containing 3.0 million oz at an average grade of .33 oz/ton. With
the gold price beginning its upward move, this resource now looks very attractive.
Emgold has a 100% interest in the project, subject to a royalty of 4% to 8%, depending on grade, until payment of the full purchase price. It can purchase the property outright for US$8 million.
Underground workings in place:
With a shaft in place, and 6 underground levels already developed, the capital required to place the mine back in production is fairly modest. The development program to prepare the mine for production, including dewatering, shaft rehabilitation, headframe and hoist construction and underground drilling, is estimated at US$11 million. Based on the existing infra-structure, planned production is 140,000 oz of gold per year. Metallurgy is simple, and good recoveries can be expected from conventional milling. The full processing facilities are expected to cost less than US$35 million.
Substantial upside potential:
The resource calculation only considers the known blocks within the area of the existing workings. The deposit is wide open at depth, and along strike. For example, the adjoining Empire mine produced 6 million oz to a depth of 5,200 feet. The Emgold calculations consider nothing below 3,200 feet.
Permits in place:
Emgold already has all the permits it needs to re-open the shaft. Additional permits will be required to mine and process the ore, but those are not expected to be difficult to obtain in this area that has a long mining history and needs jobs.
Development program:
Once financing is in hand, Emgold plans to proceed quickly to dewater the mine and begin underground drilling. A full feasibility study will get underway shortly.
Management:
Frank Lang, president and chairman, has a has a long and successful record in discovering economic mineral deposits and managing resource companies. The most notable of his many successes is Hemlo Gold Mines, which now produces 310,000 ounces of gold annually. This company grew out of two Frank Lang juniors.
Ross Guenther, director, is also project manager of the Idaho-Maryland Mine. Mr. Guenther is a geologist with more than 30 years experience, including management of underground exploration and mining.
Sargent H. Berner, director, is a partner with a major law firm and director of several other companies. He was a professor of law at the University of British Columbia and a member of a predecessor to the British Columbia Securities Commission.
Ronald M. Lang, director, is a self-employed businessman who received a business-of-the-year award in recognition of his success.
Steven W. Banning , director, is president of Golden Queen Mining Co. since 1995 and was previously, vp operations of Pegasus Gold Inc.
Financial:
As noted above, Emgold needs to raise significant financing to re-open the mine. It is planned to raise that money in stages, with each stage generating progress and news that should result in progressive gains in the share price, thus minimizing dilution.
The opportunity:
Emgold's California project sat in the shadows as the gold price drifted down. Management has now decided that it is time to move ahead with the project. With many investors now anticipating a rise in gold prices, Emgold will attract a lot of attention, especially with management determined to raise its profile.
Emgold offers investors a chance to buy a very real and substantial gold asset for the unbelievable price of US$0.75 per ounce.
Progress toward re-starting the mine and investor awareness of this exceptional opportunity should add substantially to the value of the company.
Contact:
Frank Lang, president, or Andrew Hunter, investor relations, at (604) 687-4622 or 888-267-1400.
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Resource Opportunities is written, edited and published by Lawrence Roulston, 3389 Radcliffe Ave., West Vancouver, BC, V7V 1G7, Canada, Tel: (604) 618-4756, fax (604) 688-3392, e-mail lroulsto@uniserve.com
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Resource Opportunities October 1998
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