|
American Consolidated Mining Co. (Public since 1981, stock symbol ACMG on the BB)is well positioned to take advantage of the newest methods of mining copper and gold on its properties in Utah. American's properties which consist of 4,200 acres, have well known copper, gold and tungsten deposits.
The Yellow Hammer part of the Property, consisting of three zones have been estimated to have 3,590,000 pounds of copper and 4,305 ounces of gold. This estimate was as of April of 1995 and made by Sierra Nevada Mining & Engineering Co., a highly regarded firm. However, recent drilling has proven this estimate to be at a minimum. Copper values as high 17.00% and gold values as high as 1.42% ounces per ton have been reported with average value of 3.25% of copper and .111 ozs of gold. Potential copper reserves have been estimated by outside consultants to be as high 100 million pounds.
The Keiwit Zone, revealed highly disseminated gold of .03 and .04 ounces per ton in several drill holes only 5' to 10' from surface and again high values of gold were in the range of .102 ozs/ton. Estimated reserves from past drilling have revealed that the potential for 100,000 ounces of gold on this portion of the property. This is not all though, on going drilling will increase this estimate. The company is highly excited and truly optimistic that a potential reserve of 300,000 to 500,000 ounces will be proved up in the coming year. The upside is 1 million ounces and more. The Keiwit and Yellow Hammer zones are only 1 « miles apart.
As of December 1993 the company owned 67% of Clifton Mining Company. Clifton has recently become a public company trading on the Alberta Exchange under the symbol CFB. As of December 1995 ACMG still owned approximately 600,000 shares of CFB. This is a significant asset to ACMG as CFB is selling for close to $1.00 US. Clifton has a bright future with Bill Moeller the President running the operation. Bill is also the President of ACMG. Clifton's property which is adjacent to ACMG's have a silver resource of what has been estimated to be a minimum of 50mm ounces at the minimum. Some would say that the resource can contain more than a 100 million ounces of silver. Again these are estimates, but silver values as high as 12.5 ozs per ton have been drilled. Overall, a value of 10 ozs per ton would be welcome. With gold and lead credits total values of $145 per ton have been estimated.
CFB is presently ramping up production of a 200 ton per day(tpd) mill, later on they will supplement this with a 750 tpd mill. You can extrapolate this out with 950 tons per day, 10 ozs per day of silver and a 950 tpd to 2.5mm ozs per year. AT $5 per oz, this equates to $12.5 mm per year in revenue. At a profit of $1.25 per oz CFB is in line to make a minimum of $3.0mm per year or $.16 per share on their 19mm shares fully diluted. CFB is closely held. Presently CFB is selling at $1.35 cdn. In future years CFB can be expected to produce 10 mm ounces per year or $50mm. Why is this so important? Because ACMG has a 2.5% net smelter return royalty on CFB's production, just in the immediate future ACMG can expect to receive $300,000 per year in royalties. As CFB ramps up production, ACMG's cash intake can climb to well over a $1 million a year.
This story is just beginning to unfold. Additionally, ACMG has a net profit interest(NPI) on an old mill of 11%, being capped at $1,320,000. Another asset that ACMG has buried in its balance sheet is a significant loss carry forward which can be applied to future earnings.
So all in all ACMG's story is not only exciting but almost unbelievable. However, things are about to change in 1997. ACMG has hired the prestigious consulting firm of Behre Dolbear to guide them on their quest. Results on sever drill house of the Keiwit Zone are pending, but the results are awaited with great optimism as they will be the spring board for 1997 and beyond. But the best is yet to come because ACMG is selling for $.065, that is 6.5 cents per share. They have 70mm shares outstanding with a market cap of $4.55 mm. At this point in time the valuation of ACMB is ridiculous, their NSR of 2.5% alone could be worth $.10 per share, the NOL and NSR on the old mill should be worth another $.04 per share. And what about the gold and copper. Say they have only 300m ozs and produce 30m ozs per year and net $125 per oz, this is $3,750,000 or more than $.05 per share in earnings. We forgot the copper, this could be worth another $.02 per share in earnings. .
To correlate this value take a $50 per oz in the in ground value for their gold and copper at an equivalent 500m ozs or $25mm which equals $.35 per share and their royalty on CFB production which is worth close to $.15 per share, you confirm a value of a substantial multiple of today's stock price. However, drilling might prove up a Million ounces of Gold or more and the copper can just add to the scenario. See Clifton's thread for more information of this unique opportunity which is unfolding before your very eyes. Please note that no public information has been disseminated on ACMG, but I am told a PR campaing is in the offing as soon as their audit for 1996 is completed in three weeks.
.
Call the company in UTAH, ask for Bill Moeller or Keith, phone (801)756-1414, they will be happy to talk to you. |
|
