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Posts Tagged ‘Mining+Shares’

Hawthorne Gold Corp.: Proven Management, Proven Gold Camps, Gold Production in 2009

Posted by jojo at 2:29 PM on Tuesday, February 17th, 2009

I am pleased to welcome Hawthorne Gold back as a client after a brief hiatus in 2008. As many of you know I hold a lot of respect for the management team of Michael Beley and Richard Barclay who, aside from being the founders of Hawthorne they were also the founders of both Bema Gold and Eldorado Gold. They have been together for nearly 40 years and are considered by many as true patriarchs to the Canadian Mining scene. Knowing that they have done it all before and have done it successfully speaks volumes in terms of building a new gold company.

Gold in Quartz Vein from Cassiar Gold Property

Hawthorne Gold Corp. is a Canadian-based gold exploration and development company with key properties located in British Columbia, Canada. Hawthorne’s goal is to become a gold producer in late 2009 and to continue resource development at the nearby Taurus deposit, as well as the Frasergold deposit in the Cariboo region of south central British Columbia.

Exploring and Developing in Proven Gold Camps

Cassiar Gold Camp

The Cassiar Gold Camp hosts the permitted Table Mountain gold mine, consisting of a 300 ton-per-day gravity flotation mill, power plant and tailings pond. Historical gold production from the camp amounted to just under 500,000 ounces at a gold grade of roughly 15 g/t Au (0.5 oz/ton Au). Gold mineralization at Table Mountain is primarily hosted in extensive quartz-carbonate-gold vein systems strongly associated with thrust faulting within altered greenstone and/or altered carbonatized ultramafic volcanic assemblages that are typical of some of Canada’s largest gold camps, including Timmins, Kirkland Lake and Val d’Or.

The Cassiar property also hosts the Taurus project, consisting of bulk-tonnage, low-grade gold deposits located on strike and approximately five kilometres north of the Table Mountain mine. The Taurus deposits host an NI 43-101 compliant inferred gold resource estimate of 1.04 million ounces consisting of 32.4 million tonnes at a gold grade of 1.0 g/t.

Table Mountain Mine and Taurus Deposit

Table Mountain Mine

Hawthorne took control of the Cassiar Gold Camp in April 2008, through a merger with Cusac Gold Mines Ltd. and got to work right away. Over the ensuing year the Company reached many goals by:

Completing a camp consolidation, by staking an area totaling 56,300 hectares surrounding the existing Table Mountain Gold Mine
Commenced the compilation of a geological digital model of all available data from the past 40 years of the previous mining operations and exploration projects within the camp
Completed a detailed property-wide geophysical survey
Completed a reconnaissance exploration exercise to quickly “ground truth” priority areas in preparation for 2009
Completed a 15-hole (2,536 metres) diamond drill program on the East Bain Zone where drilling has returned promising results including 2.45 meters grading 38.17g/t Au, 6.32 metres grading 13.50 g/t Au, and 2.21 metres grading 17.92 g/t Au.

The Table Mountain mine site consists of a permitted and operating mill and tailings facility, 13 adits/portals and over 25 km (15 miles) of underground infrastructure. Highway #37 runs directly through the property and the Cassiar airstrip is also accessible about 10 km (6 miles) from the mine site.

Taurus Deposit

The Taurus project is a large-tonnage, low-grade gold deposit. It is a former producer and has been explored for approximately 25 years. It is an advanced-stage exploration target, a former high-grade small underground gold mine, which was operated in the early 1950s and again in the early 1980s.

Attention then turned to a large low-grade mineralized zone, where approximately 370 holes have been drilled. Company research indicates there may be strategic higher grade zones that can be stockpiled as supplemental mill feed as the Table Mountain Mine prepares to go into production in late 2009.

Cariboo Gold Camp – Frasergold Project

The Frasergold Property is located in the historic Quesnel Trough of central British Columbia, approximately 60 miles east of Williams Lake, BC. The property is road accessible by a series of paved and gravel surfaced roads and recent logging activities have provided a series of tracks that provide good access to most of the exploration areas on the property. The Frasergold mineralization appears to fit the orogenic lode-gold deposit type. Higher-grade gold tends to occur in quartz veins with coarse particulate gold occurring in quartz-rich segregations of stringers, veins, boudins and mullions. Pervasive low grade gold mineralization is also found within the host knotted phyllite strata where quartz is absent.

History

Initial exploration in the early 1980’s revealed a 10 kilometer long zone containing anomalous gold values from soil and rock geochemical surveys. Between 1980 and 1994 it is estimated that $7.76 million has been expended on the exploration of the Frasergold Property. A total of 35,967 metres of drilling in 328 holes has been completed on the property, along with 298 meters of underground drifts to provide access for bulk sampling and metallurgical testing. Most of the holes were shallow and concentrated on defining the known mineralized areas. There has been minimal exploration work completed between 1994 and 2007, when Hawthorne commenced its work program.

During 2007 and 2008, the Company completed two diamond drill programs, consisting of 16 holes (3,617 metres) and 58 holes (10,405 metres), respectively. Results to date continue to return positive assays, both in low grade and high grade intervals. Of note, 54% of all holes encountered visible gold in the core and within the northwest zone 83% of the holes encountered visible gold.

The Company is compiling the remainder of the assays, and has commenced a NI 43-101 Resource Esitmate Technical Report in the area of 2007/08 drilling. This report will serve as the starting point to determine the next steps in the continued exploration of the project. Diamond drilling, to date, has returned promising results including 48.77 meters grading 5.84 g/t Au, 41.93 metres grading 1.50 g/t Au, and 85.34 metres grading 1.56 g/t Au.

Pursuant to an option agreement dated October 31, 2006 between Hawthorne and Eureka, Hawthorne can earn a 51% interest in the Frasergold property by completing sufficient exploration expenditures totaling $3.5 million (expended), completing a feasibility study by April 30, 2010 and making cash payments totaling $175,000 ($125,000 paid to date) before October 31, 2009. Hawthorne can earn a further 9% (for a total of 60%) by arranging financing for 70% of the estimated capital costs for production.

Positive Outlook for Hawthorne in 2009

Hawthorne’s experienced operations team intends to focus on expanding the gold resources within the Table Mountain Camp through a systematic approach of prioritizing exploration targets and evaluating opportunities for defining additional ounces of gold. The goal is to initially firm up resources that would provide for two years of production at the Table Mountain Mine, which is estimated to commence at an annualized production rate of approximately 20-25,000 ounces. The geological and technical team would then focus on identifying additional new ounces to ensure the mine remains in operation. As indicated above, the Taurus Deposit could potentially offer additional mill feed from near surface high grade zones, if necessary.

The Company is also focusing on the expansion of existing resources on its Taurus and Frasergold projects, and to fully examine the potential of the Cassiar Gold Camp including the Bain, Taurus II, Pete, Vollaug, Bear, Main Mine, Rory, The Gap, Sky, Cusac and new gold zones that may be discovered.

Hawthorne has continued to evaluate potential opportunities to acquire additional undervalued attractive gold projects in or close to production that could add to shareholder value.

With the combination of a favourable location in a prolific mining camp, a broad portfolio of exploration targets, and completion of a fully digital geological model, Hawthorne is confident that Table Mountain can be advanced to pre-production mine development in the latter part of 2009 and subsequently move into production.

: VG through lens, Frasergold Property

For more information on Hawthorne Gold please visit www.hawthornegold.com or contact

Todd Hanas at 1-866-869-8072 or Robert Ferguson 1-604-629-1505

Tags: A Grandich Company, Hawthorne, Mining+Shares
Posted in A Grandich Company, Base Metals, Exploration Shares, Hawthorne Gold, Mining Shares, US Dollar | 5 Comments »

Update – Time for Reflection

Posted by jojo at 6:43 PM on Thursday, February 12th, 2009

One of the biggest complaints from investors over the years is “financial advisers always tell us when to buy but not when to sell.” My answer is always the same and in two parts:

Part one – They will tell you when to sell if they have something else for you to buy.

Part two – There’s one way to know when to sell each and every time. Forget what you paid for what you’re thinking about selling and the reasons you first bought it. Just ask yourself this question, “Knowing what I know today, would I first buy it with the capital it’s currently worth?” If the answer is not a firm yes, then selling is definitely the answer. (more…)

Tags: Gold, Grandich, Mining+Shares, US Stocks, US+Dollar, US+economy
Posted in A Grandich Company, All Posts, Base Metals, Exploration Shares, Gold, Mining Shares, Oil, Precious Metals, U.S. Economy, US Dollar, US Stocks, world economy | 41 Comments »

APELLA RESOURCES INC. – Has It’s Time Come?

Posted by jojo at 1:01 PM on Wednesday, February 4th, 2009

Apella Resources, a junior resource firm specializing in vanadium exploration, is well-positioned to be at the forefront of this revitalization. With three vanadium properties held in the province of Quebec, Apella rightfully lays claim to possessing the largest array of potentially viable vanadium deposits in North America. The company is also invested in exploration for uranium, gold, and copper in both Quebec and Ontario. However, Apella’s primary focus moving forward is exploring and developing its vast vanadium holdings.

WHAT IS VANADIUM?

Vanadium is an element with dozens of applications. Best-known as a mineral used in high-strength steel alloys, it imparts strength and hardness while resisting corrosion. Vehicle axles, crankshafts, gears, surgical instruments, oil pipelines and high-speed tools are all real-world examples of applications utilizing steel tempered with Vanadium.

Vanadium is also a catalyst for sulfuric acid, plastic dyes, pigments, and glass; is used in superconducting magnets; and is utilized in next-generation high-capacity batteries that can be charged and recharged indefinitely while remaining environmentally friendly. Hybrid automobiles and wind/solar/nuclear energy sources will all benefit from vanadium batteries, as they are brought into the marketplace in the near future.

In addition, the resource is employed in the manufacture of high quality metal alloys that are used in everything from aerospace engines, airframes, rockets, and nuclear power plants to golf clubs.

Currently, South Africa, China, and Russia are the world’s primary producers of vanadium.

APELLA’S VANADIUM HOLDINGS
Apella has three vanadium properties, all located in the province of Quebec. The potential of these properties to move into full production can’t be underestimated.

Iron-T Vanadium-Titanium-Iron Project
The Iron-T Vanadium-Titanium-Iron property is located in the Bell River Complex near the town of Matagami, in the west-central region of Quebec. The property currently consists of 27 designated claim cells totaling 1,485 hectares, and covering one block of contiguous claims among Lozeau and Comporté townships. An additional 94 staked claims were also applied for in 2008 and remain subject to a processing period before approval.

Channel sampling on Iron-T Vanadium project

A recent examination of vanadium grade assays obtained from channel sampling on mineralized oxide zones shows that magnetite-bearing horizons with at least 33.6% Fe2O3 could return an average economical grade of 0.50% V2O5, which represents the typical grade of vanadium deposit. Excitingly, geological setting and mineralization encountered on the property indicates many similarities with typical world-class magmatic Fe-Ti-V oxide deposits associated with a layered intrusive complex. Most of these deposits are associated with mafic-ultramafic layered complexes such as the Lake Doré Complex in Chibougamau, Quebec; the Windimurra Complex in Australia; the Panzhihua layered intrusion in China; and the Bushveld Complex in South Africa.

The similarities between the Iron-T-Vanadium-Titanium-Iron property and typical world-class vanadium deposits justify an exploration program. Apella is planning to push ahead with a two-stage exploration program, budgeted at $1,250,590. The proposed program is oriented toward geological, geophysical and geochemical data acquisition which can lead to the discovery of an economic vanadium, titanium and iron deposit.

The nearby town of Matagami can provide housing, servicing, supplies, and consumable and transport facilities, including railway access, for an efficient mining operation.

Apella has optioned 100-percent of the Iron-T Vanadium-Titanium-Iron Project, under the terms of which the Company will pay $250,000 and issue 900,000 shares to the vendors, who retain a 3-percent Net Smelter Return (NSR) that can be purchased for additional consideration. The Company also agreed to spend at least $500,000 on exploration within the first two years. The Company and the vendors have since entered into an Area of Influence Agreement and have acquired or applied for additional nearby claims in order to expand the Iron-T Vanadium-Titanium-Iron Project.

Lac Dore North Vanadium-Titanium-Iron Project
The Lac Dore North Vanadium-Titanium-Iron Project is 100-percent owned by Apella and encompasses 18 claims covering an area of approximately 300 hectares (741 acres), covering the Northeast extension of the renowned Lac Dore Vanadium-Titanium-Iron Deposit, over a strike length of 2.6 kilometers (1.6 miles).

Historic stripping and channeling on the Lac Dore deposit

Recently a channel sampling program was completed with a total of 60 samples taken, representing a total length of sampling of approximately 90 meters. The results are as follows:

• Vanadium values from 0.05% to 0.610%, which after conversion to V205, returned values from 0.089% to 1.089%; the average grade of Vanadium Pentoxide (V205) is 0.55%.
• Titanium (Ti02) values range from 1.33% to 12.30%; The average grade of Titanium (Ti02) is 6.40%.
• Iron (Fe) values range from 13.23% to 56.50%. The average grade of Iron (Fe) is 32.81%.

This mineralization exposed appears to have striking similarities to that which surfaces at the adjoining 102-million-tonne/5.5-billion-pound Lac Dore Vanadium-Titanium-Iron deposit that Apella staked in August, 2007.

Lac Dore Vanadium-Titanium-Iron Project
In the summer of 2007 Apella staked 57 claims covering a large portion of the Lac Dore Deposit, the largest vanadium deposit in North America and the second-largest in the world. The company staked the claims after discovering they had become open. A competing staker launched a challenge for 21 of the claims, which remains unresolved. However, Apella is confident that its staking was of the highest standard and has presented eyewitness, video, and audio evidence to the Mining Recorder, who has since recommended that 10 of the competitor’s claims be rejected at the outset for non-compliance of the Mining Act.

Channel sampling on Lac Dore North Vanadium-Titanium-Iron Project

Accessible by both road and rail, and close to power lines, the Lac Dore Deposit has been extensively explored and developed since its Vanadium content was recognized in the mid-1960s. It is believed to hold 5.5 billion pounds, or 2.27 billion kilograms, of Vanadium Pentoxide. In 2002 a feasibility study recommended development of a mine and processing facilities, with capital costs estimated at $364-million, including equipment and infrastructure.

Once the staking issue is resolved, Apella plans to move forward in bringing the Lac Dore Vanadium-Titanium-Iron Project up to current NI 43-101 standards, and moving the project toward the next stage of development.

LOOKING AHEAD

Apella’s vanadium properties hold tremendous promise. Despite the current economic crunch, the potential for vanadium to pick up steam in a hurry should not be discounted. There are several possible scenarios that could see vanadium demand spike, thereby propelling Apella’s stock price into the stratosphere:

The Coming Automobile Revolution
With nearly all major auto manufacturers set to unveil hybrid and/or fully electric vehicles by 2012, the demand for durable batteries is increasing. Vanadium has been proven to double the energy density of conventional lithium ion batteries (the type of batteries used in most electric vehicles currently under development). Suburu has already decided to choose vanadium lithium ion batteries for their concept electric vehicle, the G4e. As vanadium becomes a key ingredient in the process of manufacturing electric vehicles, demand for the resource should increase dramatically.

The Advent of Green Energy
U.S. President Barack Obama has pledged to double the production of alternative energy in the next three years. Wind, solar, and nuclear energy sources require batteries that can retain large amounts of energy, while being capable of being recharged thousands and thousands of times. High capacity industrial Vanadium Redox Flow batteries are eco-friendly, can be charged and recharged more than 10,000 times, and are capable of maintaining their charge almost indefinitely.

The move towards electric transportation should also enhance the appeal of Vanadium Redox Flow batteries, as power providers rush to find feasible and cost-effective ways to store vast quantities of electricity required for application overnight to charge thousands of parked electric vehicles.

Political Instability
The world’s current primary vanadium sources are South Africa, China, and Russia. All three have the potential to be viewed as unreliable suppliers of the resource:
• South Africa is currently embroiled in a massive political crisis involving the ruling ANC and a new breakaway party, COPE. With presidential elections around the corner, the potential for violence cannot be ruled out.
• Russia’s recent dispute with the Ukraine over natural gas revenues resulted in a major gas shortage in Europe. Russia’s willingness to use resources as instruments of foreign policy is calling into serious question the country’s reliability as a trading partner.
• Although a rising giant, China still has huge social and political challenges ahead.
With all of Apella’s vanadium properties located in Canada, the question of reliability of supply is non-existent. Canada is one of the most politically stable and thoroughly industrialized nations on earth, with a qualified and productive workforce.

BOTTOMLINE

Apella has a very bright future as vanadium becomes a resource of choice for the “green” revolution set to occur all around us. When the economy picks up, other uses for vanadium, primarily involving steel, should also help propel the value of the mineral forward.

Apella has an experienced management team led by Patrick O’Brien, President/CEO; Adrian O’Brien, Vice President; and Dr. Christian Derosier, Vice-President of Exploration. Their expertise is supplemented by an Advisory Board composed primarily of geologists and mining engineers with extensive industry experience in eastern Canada. The newest addition to the Advisory Board is Dr. Mehmet Taner, a world renowned Vanadium expert credited with the discovery of the Bell River Vanadium Deposit which is part of the Company’s Iron-T project in Matagami, Quebec.

Despite the current economic crisis, Apella has potentially secured the largest combined source of vanadium in the world. This is a company poised to make a serious and dramatic push forward in the weeks and months ahead.

Tags: Apella Resources, Grandich, Mining+Shares, Vanadium
Posted in A Grandich Company, All Posts, Apella Resources, Exploration Shares, Mining Shares, Precious Metals, Uranium, Vanadium | 1 Comment »

Geologix Explorations – One More Hurdle to the Promised Land?

Posted by jojo at 1:27 PM on Friday, November 14th, 2008

Last week, Geologix delivered what the market and investors had been anticipating for several weeks, and though some onlookers grew anxious with the slight delay, it appears it was well worth the wait. On November 6th, the Company released the results of a much anticipated new NI 43-101 compliant resource estimate from its San Agustin project in Durango, Mexico. The new estimate brings the project’s resource up to over 210 million tonnes with 2.7 million ounces gold, 85.6 million ounces silver, 304 million pounds lead, and 2.3 billion pounds of zinc (Indicated and Inferred) in contained metals. These numbers certainly elevate the San Agustin project into the top tier of advanced-stage exploration projects in Mexico.

A Growing Resource:

Delineating a resource of this scale is impressive for any junior company, but perhaps more remarkable is how quickly and systematically the Geologix team expanded this project. Two years ago when Geologix first optioned the San Agustin from Silver Standard Resources, the project hosted an admirable but unimpressive resource of just over 400,000 ounces gold equivalent, and prior operators seemed to have exhausted the project’s potential. The technical-savvy minds at Geologix, however, saw the potential for something more and in just over 20 months as operator brought about a tenfold increase in the project’s resource – from the 400k to over 5.0 million ounces gold equivalent announced in June 2008. Less than five months later, management has done it again, doubling the Indicated tonnage and bringing the total gold equivalent resource up to today’s 8.7 million ounces.

Furthermore, a mere 20% of the project area has been drill tested to date, so there are multiple key target areas yet to be tested for additional mineralization. It’s easy to see why management believes there’s significantly more to this deposit than the current estimate reports, and that ongoing exploration and drilling could lead to yet another resource expansion.

Understanding the Resource:

The experienced Geologix team is made up of individuals who have not only made previous discoveries and advanced projects, but have successfully taken projects through to profitable production. This is not an overly promotional “pump and dump” group. They know the appropriate “acid tests” necessary to determine the project’s realistic potential before expending excessive capital. To date, even under the conservative parameters, the Company is optimistic about the potential for an eventual profitable large-scale mining operation at the San Agustin. I’m told based on the level of interest being expressed (on a possible deal at San Agustin), it appears the majors agree.

Following the latest resource announcement, some onlookers questioned the metal prices used in the estimate, which were four year averages (this is the criteria imposed by regulators for all NI 43-101 reporting). It’s worth noting that the Company conducted internal studies aimed at assessing the Project’s sensitivity to metal prices. In the internal studies, the Company used 7 year trend prices, increasing the price of gold and silver and reducing the price of zinc. The results clearly indicated that the Project’s viability is not significantly impacted by fluctuations in metal prices.

A rough estimate based on the numbers given in the latest resource report indicates the Project’s NPV (Net Present Value) could be upwards of $1.6 billion (before capital cost and expected discounts). The Company has a high degree of confidence it can expand this significantly.

The Final Hurdle:

With this latest resource estimate now completed, the next hurdle for Geologix is the outstanding option payment due to Silver Standard in the coming months. Though the actual dollar amount remains unknown, it’s widely believed to be in the tens of millions of dollars. I am, of course, very confident in the competence of this experienced management team and board of directors, and believe that the question is not “if” a deal will be completed, but “how. ”

The Company’s leverage lies in the underlying value of the San Agustin project. The appetite for large-scale gold and silver projects like the San Agustin, with economically viable ounces in the ground, should provide leverage in structuring a deal. To put the “price tag” in perspective, it’s worth noting that Geologix only pays for a portion of the overall gold and silver, and pays nothing for lead and zinc. So, even if the purchase price is as high as $50 million, this equates to a mere $5.81 per ounce of gold equivalent. For most companies, the cost to find a deposit is somewhere between $35 and $100 per ounce.

Goldcorp, for instance, paid top dollar for reserves during the merger with Glamis. The payback for Goldcorp, however, came from doubling the reserves at Penasquito which in the end made the original cost seem like a bargain. Geologix’s San Agustin project which is untapped at depth and open in three directions certainly appears to have the necessary upside potential.

Getting Across the Finish Line:

So, how will Geologix get over the hurdle of the final option payment and guide the Company across the finish line in a manner that best serves the company and its shareholders?

With the latest resource estimate now completed and the internal sub-set resource related to Silver Standard’s gold and silver resource expected soon, the Company is becoming better equipped to engage in more detailed negotiations with interested parties. In these volatile and uncertain markets, the Company is looking to explore a number of scenarios and position itself to strike with the best deal at the appropriate time. Current options being explored include, but are not limited to, equity financing under favorable terms, possible private equity stake in the project, merger with a cash rich junior, or a joint venture/earn in arrangement with a major mining company.

In today’s uncertain markets, I believe all of the above noted options have merit, and I anticipate management to successfully secure the deal that gives Geologix and its shareholders the greatest value and leverage from this significant property asset.

To view compensation disclosure, please click here.

Tags: Geologix+Explorations, GIX, Grandich, Mining+Shares
Posted in A Grandich Company, All Posts, Base Metals, Exploration Shares, Gold, Mining Shares, Precious Metals, Silver, Zinc | 11 Comments »

Sunridge Gold (TSX-V:SGC): All About the Numbers

Posted by jojo at 1:28 PM on Wednesday, November 5th, 2008

_______________________________________

Share Structure as of November 4, 2008

Share price – CDN$ 0.175
Shares Outstanding – 62,183,013
Fully Diluted – 73,605,513

_______________________________________

All mining companies out there, both juniors and majors and all sizes in between, have been hit hard in the recent mass sell-off in the markets. This has indeed created a great opportunity to take advantage of key companies that have been greatly oversold.

Many companies will tell you that they are now way under-valued, however the road to recovery will not be the same for all companies. The fundamentals for recovery in the junior mining sector will be three-fold;

1) cash
2) defined economic deposits, and
3) strong management.

Sunridge Gold has all these fundamentals and is positioned for a strong recovery:

• Well financed – almost $CDN 8 million in cash
• Strong Established assets – Total Indicated 43-101 Resources to date from 4 deposits on the Asmara Project in Eritrea contains combined metals of:
-1.28 billions lbs copper,
- 2.5 billion lbs zinc,
- 0.955 million oz gold,
- 31.2 million oz silver.
• Strong management – experience at all levels of exploration, development, and mining with a long history of success.

In addition to the above, there are a couple of key events to keep your eye on which could have a significant positive effect on the share price of Sunridge Gold:

• Nevsun Resources announced last week that they have a a $89 million commitment in the form of debt financing from a major South African bank for the development of the Bisha Project in Western Eritrea. This is great news for the Eritrean mining industry (and Sunridge) as it demonstrates that companies are able to raise debt for development capital of Eritrean projects.
• Sunridge’s “world class-sized” Emba Derho Copper-Gold-Zinc deposit is currently the subject of a Preliminary Assessment Study (scoping study). This study should be complete by the end of the year and will provide a framework of the economics of the project.

Emba Derho

The largest of the deposits on the Asmara project is Emba Derho. The Emba Derho deposit is a very large copper-zinc-gold VMS deposit and a preliminary assessment study (scoping study) will soon be completed on the deposit. This will provide an outline of the economic framework for the deposit. The deposit would be mined by open pit and it is located on excellent infrastructure, as it is located approximately 15 km by paved road from the capital city of Asmara.

Also, as part of the upcoming Scoping Study, Sunridge recently issued an updated resource estimate on their Emba Derho deposit in Eritrea. The resource numbers were already very impressive when I first covered Sunridge Gold back in February, however as I said then, there was much room for expansion.

The new resource estimate reports at Emba Derho reports a “world class-sized” indicated resource of 59 million tonnes, containing:
• 990 million pounds of copper (35% increase since my first coverage in February 2008)
• 1,900 million pounds of zinc (11% increase)
• 485 thousand ounces of gold (20% increase)
• 19.5 million ounces of silver (31% increase)

The resource update was announced on September 18 – Smack in the middle of the world wide market meltdown – and the market has yet to take advantage of these impressive numbers.

Emba Derho – Photo of surface

Debarwa VMS Deposit

Work also is continuing at the Debarwa VMS deposit which has an indicated resource of 4.4 m/tones, including a rich copper zone with 1.3 m/tonnes 5.36% Cu, 1.54 g/t Au, 33.87 g/t Ag. Sunridge is conducting metallurgical testing on the high grade copper zone. The company is examining the possibilities of a low capital cost mine that will pull out the high grade copper zone and this is likely the next of the deposits to undergo a scoping study.

Adi Nefas VMS and Gupo Gold Deposit

Both, the Adi Nefas VMS Deposit and the Gupo deposit are in close proximity to the Emba Derho deposit (both with 6 km). When feasibilities studies are conducted at Emba Derho both will be considered as part of the mining plan as ore could be shipped the short distance to a common concentrator located at Emba Derho. The indicated resource at Adi Nefas is 2.7 m/tonnes grading 2.85 g/t Au,99.30 g/t Ag, 1.39 % Cu, & 8.38% Zn and the Gupo Gold deposit contains an inferred resource containing 189,000 ounces of gold averaging 2.99 g/t.

Red boxes indicate 43-101 Resources
Blue boxes indicate High Priority Drill Targets

Future Exploration Potential

Sunridge has only been exploring the 825 square kilometer Asmara property for less than 5 years and have had great success. With the current situation in the markets, Sunridge is focusing on advancing it’s key projects towards production and has slowed down exploration work to conserve capital.

When market conditions do change however – and they will -they will continue to explore the numerous other high priority targets in the same systematic process that so far discovered Emba Derho and Adi Nefas deposits.

Sunridge has so far 9 high priority new drill targets along proven VMS trends containing numerous strong gossans with geochemical and geophysical anomalies. These include: Adi Musa, Dairo Paulus, Shooting Star, Kodadu, Adi, Lamza, Shiketi, Adi Rassi, and several yet to be named targets (see map).

Bottom Line

Many companies will tell you that they are undervalued. The key difference is that I believe Sunridge’s deposits will prove to be deemed economical. With the impressive amount of contained metals in “Indicated” category (see table below) and a beaten up current market cap of approximately only $10 million, I see a tremendous opportunity right now in Sunridge Gold.

Sunridge Gold is committed to conservation of capital while focusing on moving their resources towards feasibility for when markets do rebound – which of course they will. Management understands the need to do this balancing act of watching their finances closely while forwarding their projects towards production.

Property	Million lbs Cu	Million lbs Zn	K oz Au	M oz Ag
Emba Derho	990	1.900	485	19.5
Debarwa	203.6	57	220	3
Adi Nefas	83.7	503.6	250	8.7
Totals	1,280	2,466	955	26.6

Click here for comensation disclosure

Tags: Grandich, Mining Shares, Mining+Shares, Sunridge Gold, Sunridge+Gold
Posted in A Grandich Company, All Posts, Mining Shares, Sunridge Gold | 8 Comments »

General Quarters Still In Effect

Posted by pgrandich at 10:30 AM on Monday, September 15th, 2008

About a year ago, I sounded the alarm just days after the Dow Jones Industrial Average made a new all-time high. I entitled the newsletter “Man Your Battle Stations.” In that newsletter, I envisioned (actually, all anyone can do is make an educated guess at best) a very sharp sell-off and suggested holding no equities except those related to precious metals. (Since then, mining shares have been killed, proving I put my pants on one leg at a time, too, and those speculators who only buy those stocks are likely not sending me anything for Christmas). But, if you followed my advice back then, the lion’s share of your capital would have been in cash, so the metals hit should not have been as devastating (unless you’re a gold bug, hello).

Widespread losses of anywhere from 25 to 50% or more are not uncommon. Certain sectors like the financials, housing and the like have been hammered and have even seen the wipe out of a company’s entire equity. While that is not likely to continue at the same pace, it is still far too early to go back into the water. Investors should remain on the sidelines for the most part and only peek out of their fox holes as we get closer to 10,000 on the DJIA.

Calling All Buyers

There are enough fundamental problems in the stock market to last for quite a while, but one that hardly gets any play these days is the great wealth transfer. Nearly 80 million Baby Boomers have begun reaching retirement age and these folks were going to sell their equities and move into fixed income or the like creating a bonanza of business opportunities (at least that’s what was hailed within the financial services industry). Also, these folks had financial plans (my readers already know why I don’t believe traditional financial planning doesn’t work, and this is living proof) that had assumed rates of returns in the 8 to 10% range. Not only have these Baby Boomers not seen such a return in years, but they are now facing a two-headed monster: falling equity prices and far lower fixed income rates of return. In addition, those in the work force under age 65 are in it up to their necks, trying hard to stay afloat, and are in no position (don’t have the disposable income) to take these shares off the Boomers’ hands even at today’s prices. This will be another weight on the stock market for a considerable period ahead.

Points of Interest

• The FDIC problem list of banks spiked 30% in the past quarter. Banks remain off limits still in my book (but can become buying targets down the road). Unless many white knights come riding to the rescue, banks in general will likely have to dump assets to maintain satisfactory capital levels for regulators and creditors. Commercial banks are likely reluctant players as this unfolds. Keep in mind that on average, commercial banks attempt to hold about $1 of capital for every $10 of assets they own (investment banks are about $20). Another big loss this quarter or next could see large scale fire sales once again.

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Tags: Base+Metals, Exploration+Shares, Mining+Shares, Oil, Precious+Metals, small+cap+stocks, US+Dollar, US+economy
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