-- Posted 26 April, 2006 | |
Pennaluna Prospector: Northwest Mining Stock News -- Coeur d’ Alene, Idaho --
April 24, 2006
Gold over $600. Silver above $12. Best precious metals market in decades.
But no Prospector for six months, and some folks ask why.
The reason: bull markets create more customers and more trading volume, which is good news for us brokers. The bad news is they also create more paperwork -- great heaping piles, mounds, hills, and mountains of it… which leaves little time for writing newsletters.
So with apologies for tardiness, here is an overdue update on recent new developments in our neck of the woods.
* * Coeur d'Alene Mines (NYSE:CDE/TSX:CDM) dropped a bombshell a few days ago, when it announced plans to sell all of its Silver Valley properties to U.S. Silver Corporation. The $15 million cash deal is slated to close June 1 and includes the Galena Mine, which is operating; the Coeur Mine, which is closed; and the 5,000-foot deep Caladay exploration shaft.
U.S. Silver is a private firm with London financial backing. There are folks in management with strong Valley ties -- notably CEO John Ryan, who grew up in Wallace and holds a mining engineering degree from U of I, and President Mark Hartmann, who was chief engineer at the Sunshine Mine and will honcho the Galena. Company headquarters are to be in Wallace.
U.S. Silver says it plans to keep the Galena’s 180 employees and to boost spending on exploration and development, which suffered badly during the long bear market. Outfits with exploration property leased to CDE around the Galena include American Silver (PinkSheets:ASLM)… Sterling Mining (PinkSheets:SRLM)… and Silver Buckle Mines (PinkSheets:SBUM)
CDE has been trading at about $6.99, in the high end of its 52-week range.
* * Timberline Resources (PinkSheets:TBLC), now fully reporting to the SEC, has morphed into a double-barreled mineral exploration and hard-rock drilling play with -- get this -- cash flow. Last month it acquired privately owned Kettle Drilling of Coeur d’Alene in a move that should complement the company’s exploration work. Kettle grossed over $5 million last year and expects future growth to be spurred by more demand for drilling services.
With fewer than 17 million shares out, TBLC is trading now at around 75 cents.
* * Stillwater Mining (NYSE: SWC) over in Columbus, Montana, posted a fourth-quarter loss it blamed on higher mine development costs and lower palladium prices. Many Silver Valley miners now work at the Stillwater, the only U.S. producer of palladium and platinum and the largest primary producer of PGM outside South Africa.
SWC dropped as low as $6 last May. It has since roared back and trades now near $17.50.
* * Idaho General Mines (OTCBB: IGMI) of Spokane has been busy finishing a $30 million private placement, applying for Amex listing, and buying the Hall-Tonopah moly and copper property in Nye County, Nevada. That project is about 120 miles from the outfit’s cornerstone Mount Hope molybdenum deposit.
IGMI now trades at around $3.25, up from last summer’s low of about 85 cents, but off a 52-week high of $4.15.
* * Hecla Mining (NYSE:HL) got slammed last Friday by Chuck Jaffe of MarketWatch in his “Stupid Investment of the Week” feature, but shares of the 115-year old granddaddy of Idaho miners didn’t crumple.
HL closed last week at $6.72, in sight of its high for the past year of $7.09 and well above November’s low of $2.95.
* * Sterling Mining (PinkSheets:SRLM) says Red Lake Resources (TSX:RL) of Vancouver signed an option to explore its JE silver project in northwest Montana. Earlier, Sterling reported that Behre Dolbear & Company will help finalize the phase III mine plan for the Sunshine Mine; that Zanetti Brothers of Osburn has started site prep for the ‘Shine’s new Sterling Tunnel Project; and that Atlas Fausett Contracting will drive the mile-long tunnel in a $2.8 million project expected to take up to 15 months. [Ed. Note: Atlas Fausett Contracting is part of Atlas Mining. See more Atlas news below.]
SRLM shares have been as low $2 and as high as $6.95 in the past year. They’re trading lately at about $6.55.
* * Little Squaw Gold (OTCBB:LITS) early this month started the year’s exploration program on its big gold project up in the historic Chandalar mining district, about 200 miles north of Fairbanks, Alaska. The $1.7 million program, which is fully funded, includes over 10,000 feet of drilling on 10 or more gold prospects.
The Spokane-based firm has expanded its holdings to almost 14,000 acres in the Chandalar district, which it notes has never before undergone holistic exploration with modern techniques. LITS fell to 20 cents last fall, but is now trading up around 85 cents.
* * New Jersey Mining Company (OTCBB:NJMC) raised about $1.3 million in a recent private placement. The Kellogg firm says it will use the money for three things: to drill on the Idaho Vein of the 120 year-old Golden Chest Mine up near Murray, now back in production after decades of idleness; to start development work at its Silver Strand silver mine near Coeur d'Alene; and to add a concentrate leaching circuit to its mill facility.
Shares of NJMC, which is piloted by the father and son mine engineering team of Fred and Grant Brackebusch, have a 52-week low of 22 cents and a high of 80. The stock trades now around 77 cents.
* * Canyon Resources (Amex:CAU) suffered another judicial rebuff recently, as a court dismissed its suit against the State of Montana for unlawful taking of the company’s Seven-Up Pete project, where Canyon spent nearly $70 million. The Denver outfit, which is now focused on its Briggs gold mine in California, plans an immediate appeal.
CAU was once upon a time above $3. Despite some good news at Briggs, its Montana setbacks have pushed the shares down under 90 cents.
* * Mines Management (AMEX:MGN) says a new analysis of its massive Montanore silver and copper project is consistent with those of former owners U.S. Borax and Noranda Minerals. The Montanore is over near Libby, Montana and estimated to hold up to 260 million ounces of silver and 2 billion pounds of copper.
MGN has a 52-week low of $4.07. It recently posted a new 52-week high of $10.10 and is trading now a little under $9.
* * Atlas Mining (OTCBB:ALMI) and partner Kat Exploration earlier this month bought acquisition rights to the Handcamp Gold Property in Newfoundland. Atlas also announced that DURTEC GmbH of Neubrandenburg, Germany would distribute its halloysite clay in Europe. Atlas mines a pure white halloysite at its Dragon Mine in Juab County, Utah, which it says is the only commercial source outside New Zealand. (Halloysite is used in porcelain, china and a growing number of high-tech ceramic applications.)
From a low under 80 cents last winter, stock of the Osburn outfit has jumped up to about $1.80 now.
* * Mascot Mines (Pink Sheets:MSLM) reports it will finish logging its Denver Creek mining claims near Pinehurst in May or June and use the proceeds to diamond drill at its Little Pittsburg property, where US Bureau of Mines exploration back in the 1940’s found anomalous gold values. Shares traded last at 12 cents.
[Ed. Note: The little Kellogg outfit also announced the retirement of Secretary-Treasurer Ron Eggart. Ron is a well-known Silver Valley CPA who helped start the firm back in 1950 and sometimes joked that "I've been married to Mascot Mines longer than to my wife." Ron has always been a plus for the Valley through both good times and bad, and we all wish him the best of good luck.]
* * O.T. Mining (PinkSheets:OTMN) of Montreal says it closed a $2.5 million private placement in February and expects to finish a NI 43-101 technical report before June. The Canadian firm owns the Ruby Property -- over 21 square miles of copper-moly and gold and silver projects that sprawl between Butte and Helena, a few miles from Apollo Gold’s Montana Tunnels Mine.
OTMN has a bit less than 11 million shares out. The stock posted a 52-week low of $2.90 and a high of $ 7 and is trading now in the $5.40 range.
* * HuntMountain Resources (OTCBB:HNTM) continues to build its property portfolio, this month picking up an option on two prospective gold projects covering more than 6,000 acres in northwest Quebec.
Last month, the Spokane firm acquired the Dun Glen Gold Project in Pershing County, Nevada, as well as exploration rights to 74,000 acres of precious metals ground in Argentina. HNTM is trading at around 45 cents.
* * Metalline Mining Company (OTCBB: MMGG) of Coeur d’Alene closed an $11 million private placement in March, and reported last week that Colorado-based Pincock Allen & Holt will do the mine plan for a bankable feasibility study at its Sierra Mojada project in west central Coahuila, Mexico. Sierra Mojada is a 17,000 acre zinc-silver-copper play in the historic Sierra Mojada Mining District.
MMGG was as low as 72 cents last December, but has since climbed up to around $2.50.
* * Minera Andes (TSX:MAI/OTCBB:MNEAF) says that it and joint venture partner Mauricio Hochschild & Cia. Ltda, the large Peruvian mining firm, have reached a formal decision to put the San José project into production. Situated in southern Argentina’s Santa Cruz province, the San José’s annual production is expected to be about 3 million ounces of silver and 60,000 ounces of gold.
MNEAF dipped as low as 28 cents in the States last winter. It’s trading now at about $1.08.
* * Be Careful Out There -- Yes, the mining market’s been hot and there’s been a lot of money made. But remember that resource stocks are volatile. They can go down as fast as they go up. They aren’t for your “safe” money. No matter how good things look, never invest more than you can afford to lose. You’ll sleep better that way.
“A society of sheep must in time beget a government of wolves.”
Henry de Jouvenel
Editor: Tom Wobker
Disclosure: Pennaluna & Company is a NASD broker-dealer and market maker. As such, it frequently buys or sells stocks for its own account, or in order to make a market. Consequently, Pennaluna may at any time buy or sell or make a market in any stock mentioned herein, and associated persons may also buy, sell or hold such stock at any time. The firm and/or associated persons may also engage in private placements or other investment banking activities with any company mentioned. Some securities mentioned may be small-cap stocks and subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information; some may be foreign securities and subject in addition to currency, political and other risks.
Comments and opinions are solely those of the writer. This publication is intended solely to provide readers with information and is not a solicitation for the purchase or sale of any security. Mention of a company or stock does not in any manner constitute a recommendation, unless specifically so stated. Information is believed accurate but accuracy is not guaranteed.
-- Posted 26 April, 2006 | |