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Bought this 4 or 5 years ago by a private placement. It didn’t do well. They’ve restructured the company and kind of firmed it up. The geologist running it is good and smart. Has a joint venture with B2Gold (BTO-T) looking at a very prospective ground in Finland, probably one of the top places to be exploring. Just recently released some results of some surface sampling and found large boulders with visible gold in it. If subsequent drilling can confirm that there is some continuity to that, it is an interesting speculation. He would watch this.
They’ve been in Ecuador quite a while. Formed a joint venture, and made a very impressive copper/gold discovery. There are a lot of other periphery copper/gold systems around there. This is looking pretty good. He missed it, and it is looking more expensive than what he would want to pay for it.
Has a lot of respect for the president. Bought this in December, and just sold it a few weeks ago. The stock has come off since then. An interesting play, and something certainly worth holding in terms of gold. They are producing gold out of Arturo, and it looks like the grade is higher than expected. The Cove deposit they are drilling out seems to be hanging together now. He sees no fatal flaws here. He would like to see this under $2, and if he saw it at $1.50, he would buy a lot.
A very large, low grade deposit. It has a little over 1 million ounces M&I, and probably 3 in inferred resources. A real, sketchy sort of deposit in that the mineralization is spotty. If you were to try to mine this as an open pit, your waste to ore ratio would be extremely high, especially given that it is such a low-grade deposit.
A high-grade deposit in Papua New Guinea. The land package is great and the exploration potential is really good, but what they are doing is mining narrow high grade veins. The previous company was not able to do this. Until they can show they can make money mining those veins, it’s not something he would be interested in. There are a lot of promoters pushing things, and you want to be careful.
Mining. Most of the big companies are setting their gold reserve prices at $1250. A lot of the financings is happening for a lot of companies, but some of them have very marginal projects. Those kinds of projects don’t work in this environment, because a lot of big companies have been writing down their reserves to $1250. If gold goes up to $1500 for example, they could already add maybe 10 million ounces from their own assets, rather than go out and acquire them. They need to replace assets of quality, that work at the gold price that the reserves are set at, and generate some kind of double digit return. It’s also about the team. There are not very many teams with the relevant experience, not only in the jurisdiction, but also in the deposit type that they are looking for that can marry all that. Lately there have been a lot of private placements by majors in these kinds of companies with those kinds of assets and those kinds of management teams. That is basically what he is looking for.
Had owned this last year. He liked the resource, the jurisdiction and the team. The issue was that the grade they were thinking they would get, based on the throughput in terms of how much they got, would get underground matched, because they wanted to do about 1700 tons per day and get a head grade of well over 10. He thought dilution would be too high. He is not looking at development plays, so hasn’t come back to this.
Sold his uranium stock last year. It looks like the market is fairly well balanced, such that he doesn’t see a turn around anytime soon, because there is still such a big overhang in the inventory. The way to play this would not be with production, and potentially not with near-term development, but more with exploration. He is not playing anything in uranium right now.
A very large, but low grade deposit. If you like to play the leverage game, this is a play that people would make. It would be a decent capital project, but would take a while to permit. They would need to produce their own power. It doesn’t make much economic sense. It would need much higher copper and gold prices to be economic.
(A Top Pick March 8/16. Up 42.86%.) This company and its team are amongst the best explorers in the industry. A solid company doing solid, generative, conceptual exploration.