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Here's a great opportunity in Stewart, B.C. that I suggest you might want to investigate and, ideally, pounce on. (Sorry if this is a little long winded.) It involves two low profile VSE stocks, Minvita Enterprises (MVE.V) and partner Teuton Resources (TUO.V), who jointly (50% each) own some extremely prospective property in the famed Stewart area of B.C. Last week they released results of this year's phase II drilling, which included: 8.9 ft grading 1.293 opt Au 27.5 ft @ 0.380 opt Au 19.9 ft @ 0.317 opt Au 11.5 ft @ 0.901 opt Au, 0.053% Co 50.9 ft @ 0.223 opt Au (incl 14.8 ft @ 0.538 opt Au) 40.0 ft @ 0.237 opt Au (incl 7.5 ft @ 0.923 opt Au) So the stocks have probably sky-rocketed out of reach, right? Wrong! Despite showing some of the most impressive numbers from any-camp all- year, unbelievably, the two companies are both trading at or near heir respective 52 week lows: MVE at $.75 and TUO $.70. MVE has only 5,398,993 shares outstanding, 6,951,993 fully diluted; TUO 9,371,050 S/O or 10,931,050 F/D. This gives them mini market caps of $4.0 million and $6.5 million respectively. Starting to sound interesting? Read on, it gets even better... The property is located less than 20 miles from the Red Mountain gold deposit at which Royal Oak Mines is spending $8 million in 1996 to push reserves over the one million ounce mark from the present level of 800,000 ounces gold. Furthermore, it is less than 100 miles from the Eskay Creek Mine, which has one of the highest grade gold mines in Canada: 1.18 million tons grading an incredible 3 ounces gold per ton equivalent. Prime Resources, a subsidiary of mining giant Homestake Canada Inc., is the operator of the Eskay Creek Mine--remember those names, they will come-up again later. First, a little background. Last year, a very late season discovery of parallel shear zones was made on the property. Minvita and Teuton immediately commenced a trenching program with stunning results: assays ran to 18.0 ft grading 3.59 opt gold and 24.0 ft @ 1.50 opt. Squeezing the most out of the season, the trenches were quickly followed by a 13 hole diamond drilling program totaling 3,500 ft. Results include: 9.90 ft @ 1.67 opt and 26.3 ft @ 1.85 opt. This sent the shares of both stocks soaring, Minvita hitting $3.15 and Teuton $2.90. In December the companies raised $1.3 million each at prices above market! Teuton raised 500,000 shares at $2.64/sh and Minvita--believe it or not--350,000 shares at $3.79/sh (remember, the high was only $3.15). Who would subscribe to shares at such lofty heights you ask? None other than Prime Resources and Homestake Mining. They also received the right of first refusal on any future financings or disposition of the property. In addition, they agreed to provide technical support for the 1996 program. In 1996, the property has seen drilling in three phases: 33 holes totaling 12,700 ft in Phase I, 49 holes in phase II, and 30 holes in Phase III (just completed: assays not yet released). Despite some very impressive results in both Phase I (e.g. 14.4 ft of .45 opt Au, 0.08% Co) and Phase II (see above), the stock has steadily fallen. The problem seems to be a combination of factors. 1) market expectations that drilling would match the highest grade trench assays (i.e. grades similar to Eskay Creek); 2) widths and grades that are not consistent; 3) general market malaise; 4) Minvita and Teuton are absolutely non-promo companies; 5) an exploration season that is winding down. However, I feel all the above makes this a tremendous opportunity with a very limited downside. The company has the technical and financial backing of Prime and Homestake, arguably they know more about mining in the Stewart area than anyone. Plus, MVE and TUO have an additional 30 holes to release in two to three weeks time. These holes have targeted the areas with the highest trench results--some exceptional holes are said to be on the way. In addition, a reserve calculation is likely to be included with the Phase III results. At current prices, speculators could pick-up shares and hold for Phase III results. Or, more patient investors could go bargain hunting and hold for next year's program. The H1 zone has a drill defined strike length of 1,080 ft and vertical extension of 774 ft--it remains open in three directions. Trenching and sampling has shown mineralization that indicates the strike may extend over 3 miles. The companies hold other properties in the area and retain joint management. They can be reached at 682-3680 (Vancouver, B.C.) or 1-800-879-2333. I suggest calling them directly. Regards and good-luck, DK | ||||||||||||||
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