I strongly suggest you read that article!
But the town isn't named Cobalt for nothing. Historic production of Cobalt for the mining camp of Cobalt was about 25 million pounds. And Cobalt prices have risen from under $9/pound to up to $33/pound recently, in less than a year! What a bonus!
Cobalt is used to make metal alloys. Cobalt is also used in cell phones, and many other very specific industrial and strategic applications.
But the story gets much, much better. The president of Cabo Mining, John Versfelt has for years, been keenly aware of, and anticipated, the turn around in the market for precious metals. I feel it is very important for a company president to be able to correctly anticipate market conditions, and to have a plan to take advantage of that. John does. Cabo Mining has options to buy two drilling companies.
One of the truisms (or jokes) about commodity trading is that sometimes the longs make money and sometimes the shorts make money, but the broker always makes money. (Perhaps that's why brokerage houses have market caps in the tens of billions of dollars.) Well, exploration companies may go boom or bust depending on drilling results, but the drilling companies always make money, just like the brokers... as long as they are kept busy with drilling work.
Well, by now, mining companies across Canada are filled with capital from recent private placements all due to the recent rise in the price of precious metals, and now they are anxious to drill. And on Jan 5th, John Versfelt announced that Cabo Mining secured an option to buy two drilling companies that, when acquired, should make Cabo Mining the fourth or fifth largest drilling company in Canada, and should be a very profitable business going forward, given market conditions.
These drilling companies should provide the cash flow that is rare for explorers to have. It may mean less dilution in the long run, as Cabo might be able to fund a significant amount of exploration work by themselves! How fortuitious for Cabo shareholders that John Versfelt had a vision and a plan, and had done a significant amount of his own market research! After all, knowledge is money!
As if all that is not enough, Cabo Mining just announced on February 4th, a major high-grade discovery as one geologist said, it's the first time in 40 years that such values have been found in the Cobalt, Ontario mining district. How did they make such a discovery? Seems simple, really. They looked where a very large "silver boulder" was found on their property back in the early 1900's. This boulder is 1,640 pounds, and contained 9,715 troy ounces of silver!
So basically, Cabo Mining went to the area, removed some overburden, found some veins, took soe samples, had them assayed, and discovered a new Cobalt-type silver zone! Their samples were very high-grade Cobalt and Nickel, and are the type that should lead to the silver.
The assay results ranged from trace to 2.6 ounces silver ... trace to .15 ounces gold ... (which is not very significant for the precious metals) but it also contained trace to 4.03% cobalt ... trace to 28.9% nickel ... and trace to 1.05% copper.
Although there are no estimates for tonnage, John Versfelt says, If you average these values out on a per ton basis, the results are actually quite amazing. So, at his suggestion, I did some 7th grade math to take an average of the Cobalt and Nickel values across the samples (which were each about the same size), and discovered the following:
Cobalt average 1.87625% x 2,000 lbs. x $26.00/lb. for Cobalt = $975.65 per ton. Nickel average 9.42875% x 2,000 lbs. x $7.00/lb. for Nickel = $1,320.03 per ton.
Based on today?s prices, the value of precious metals, strategic metals, and base metals is US $2,307.52 per ton. Although, again, there are no estimates for how many tons of ore might be there, it's still high-grade ore!
For comparison's sake, if the samples contained gold only, at $400/oz., the equivalent grade would be like ore that had over 5.5 ounces of gold per ton! If the samples contained silver only, at $6.50/oz., the equivalent grade would be like ore that had over 355 ounces of silver per ton!
A further drilling program is already scheduled for late February in that area, as well as two other known silver occurrences in similar geological settings.
Share Structure and Market Cap: Fully diluted subtotal, including shares needed to acquire two drilling companies, which is contingent upon which is contingent upon raising money when issuing shares= 18,880,436 as of February 9th, 2004 (Post-Consolidated) Plus a proposed $5 million financing to finance capital expenditures and working capital for the two drilling companies. @ share price $.57 Cdn x .76 US/Cdn = US $.43 (as of Monday, Feb, 9th) = $8.2 million Market Cap, U.S.
I believe it is important to diversify, and to not invest all your money into one stock. The dollar, and stocks, can go to zero value.
Companies can go bankrupt, or quit. Silver cannot go to zero value. I believe a prudent investor should invest in silver first, and junior silver exploration companies second, and only with money that you can afford to lose. Cabo Mining is not making any money right now, and their future success is contingent upon issuing more shares to raise money to fund operations and development. I have not invested in Cabo Mining for their balance sheet, but for their assets and options to acquire assets. This article contains forward-looking statements that are uncertain. There are no guarantees, and there is risk involved in investing in junior exploration companies.
There is also significant risk in investing in one company based solely on reading an article on the internet, because widespread public exposure can cause a specific stock to move up in value inordinately.
A recent example is Silverado Gold, ticker symbol SLGLF.OB at Yahoo! Finance. If you are not familiar with what happened to Silverado Gold, take a look at the two year chart. It went from ten cents/share to seventy cents, and down back to ten cents again. You should do your own research and due diligence, as the SEC warns investors in an article here:
Internet Fraud: How to Avoid Internet Investment Scams
