-- Posted 11 July, 2006 | |
Pennaluna Prospector: Northwest Mining Stock News -- Coeur d’ Alene, Idaho --
July 10, 2006
Summertime and the livin’ is easy.
Or if not easy, at least quiet. Especially around the trading desk in here.
A sharp correction coupled with lackadaisical summer trading has brought a breather for the runaway bull market in metals. Though not pleasant, the price pounding was not unexpected... and probably not unhealthy either, as it beat some of the speculative froth out of the market.
While we don’t believe the metals bull has finished his stampede at this point, we also don’t expect another gallop to begin before the tamaracks turn yellow this autumn.
In the meantime, miners here in silver country continue to keep quite busy. Following are some of the new developments up in our neck of the woods…
* * Mines Management (AMEX:MGN) gave regulators its plans to reopen the 14,000-foot Libby adit at the huge Montanore Project in northwest Montana, which is estimated to hold up to 260 million ounces of silver and 2 billion pounds of copper. With hard rock operating and water discharge permits now in hand, MGN says it can start underground evaluation and possibly reopen the adit later this year.
The Spokane company also announced that a $65 million securities shelf registration has become effective. MGN has a 52-week low of $4.80 and last spring posted a high of $10.10. It’s trading now a hair under $7.
* * Timberline Resources (OTCBB:TBLC) moved up to the Bulletin Board last week, now transformed into a fully reporting company that combines a mineral exploration division with a hard-rock drilling operation which produces cash to pay the bills.
Earlier this year, Timberline bought Kettle Drilling of Coeur d’Alene, which grossed over $5 million last year amid growing demand for drilling services. It named John Swallow as CEO and added a new VP of Exploration -- Paul Dircksen, MS, a 35-year veteran in exploration and development.
Recently the Spokane outfit inked new options on two gold projects along central Nevada’s Walker Lane Mineral Belt. It already held six other Walker Lane properties, several now leased to Christopher James Gold Corporation. With fewer than 20 million shares out, TBLC trades at around 75 cents.
* * Stillwater Mining (NYSE: SWC) over in Columbus, Montana, apparently hasn’t been hurt too much by falling palladium and platinum prices or the recent report from CPM Group that gave a negative outlook for those metals.
Many Silver Valley miners now work at Stillwater, the only U.S. producer of palladium and platinum and the largest primary producer of PGM outside South Africa. SWC currently trades around $12.60, well above a 52-week low near $7.
* * Coeur d'Alene Mines (NYSE:CDE/TSX:CDM) last month closed the $15 million cash sale of its Silver Valley properties to U.S. Silver Corporation, and expects this to provide a one-time pre-tax gain of $10 to $12 million in the second quarter. The deal included the Galena Mine, which is operating; the Coeur Mine, which is closed; and the 5,000-foot deep Caladay exploration shaft. CDE has been trading at about $4.84, toward the low side of its 52-week range.
U.S. Silver is a private firm with London money and Silver Valley ties. CEO John Ryan grew up in Wallace and took a mining engineering degree at U of I. President Mark Hartmann was chief engineer at the Sunshine Mine. Headquarters are in Wallace.
U.S. Silver has said it plans to keep the Galena’s 180 employees and to boost spending on exploration and development, which suffered of late. Outfits with property under lease around the Galena include American Silver (PinkSheets:ASLM)… Sterling Mining (PinkSheets:SRLM)… and Silver Buckle Mines (PinkSheets:SBUM).
* * Little Squaw Gold (OTCBB:LITS) says the summer’s gold exploration program continues on track at its big project up in the historic Chandalar mining district, although a late and rainy Alaskan spring has slightly delayed the start of drilling. A 20-man camp has been set up on the property, which is about 200 miles north of Fairbanks. The $1.7 million fully funded program will include at least 10,000 feet of drilling on 10 or more gold prospects. The Spokane firm has almost 14,000 acres in the Chandalar district.
LITS was as low as 20 cents last fall, but despite the metals sell off is now trading up around $1.30.
* * Klondike Star Mineral Corporation (OTCBB:KDSM) also has news of the Great White North, reporting it bought 100% interest in property called the Bonanza Project – 269 claims that cover over 15 square miles of the Yukon’s Klondike gold fields near Dawson City.
The Seattle outfit says it now has eight Yukon projects, totaling more than 180 square miles. They include over 150 square miles at the site of the Klondike Gold Rush, where surface mining has continued since 1896. Shares of KDSM are trading lately at about $3.60.
* * Hecla Mining (NYSE:HL) sent out a press release announcing that the Lucky Friday rescue team took first place in the annual Coeur d’Alene District mine rescue competition last month. Folks in the Silver Valley take note of such things because they remember clearly that the 1972 Sunshine Mine disaster killed 91 of their family and friends. 115-year old HL has traded lately at $5.25, roughly midway in its 52-week range.
* * Atlas Mining (OTCBB:ALMI) credits better metals prices for higher revenues at its Atlas Fausett contract mining division, and says a new project to start in August at Stillwater Mining’s East Boulder Mine will add another $200K monthly. Atlas also reports adding a new jet mill and other equipment at its Utah halloysite clay mine, said to be the only commercial source outside New Zealand. Halloysite is used in porcelain, china and high-tech ceramic applications.
The Osburn, Idaho outfit is a sort of mini-conglomerate. Besides 1) the halloysite mine and 2) the underground mining contracting operation, it also has interests in 3) North Idaho timberland and 4) Idaho and Newfoundland mining properties. From a low under 80 cents last winter, ALMI has climbed to about $1.75 now.
* * Canyon Resources (Amex:CAU) raised about $5 million in a June private offering and then recently announced “encouraging” drill results at the Cecil R. project near its Briggs Mine in California. The Denver firm is working to recover from a series of set backs in Montana that would make Job cuss. The most recent was the dismissal of its suit against the state for unlawful taking of the Seven-Up Pete project near Lincoln, where Canyon spent nearly $70 million. At last word, the firm planned to appeal.
Two years ago, CAU was above $5. In the wake of the Big Sky misfortunes, shares are now a shade over a buck.
* * Kimberly Gold Mines (PinkSheets:KMGM) of Coeur d’Alene named Don Rolfe as new VP and Chief Operating Officer. A graduate of the Montana School of Mines, Rolfe has over 30 years of mine engineering and management experience.
Kimberley also announced it has leased the 2,700-acre Camacho gold and silver property in Mexico’s Zacatecas state. KMGM traded above 30 cents in the past year, but has now slid to around 15 cents.
* * New Jersey Mining Company (OTCBB:NJMC) is busy this summer, reporting it has started work on its concentrate leach building; drilled seven new holes at the Golden Chest, with core now under assay; extended the access ramp at the high-grade Katie-Dora gold vein there; and started rebuilding infrastructure at the Silver Strand silver mine near Coeur d’Alene in preparation for future seasonal operation.
Shares of the Kellogg outfit, 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 $1.25. NJMC is trading now around 70 cents.
* * HuntMountain Resources (OTCBB:HNTM) says it finalized its option agreement for the Lac à l'Eau Jaune and Malartic Surimau prospective gold projects in northwest Quebec. Combined, they cover more than 6,000 acres.
The Spokane firm has been building its property portfolio this year. Last spring it 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 65 cents.
* * Be Like Buffett -- If you want to help some people who need it, though maybe on a smaller scale than the Oracle of Omaha, check out The Smile Train. This non-profit group works in 60 countries to aid impoverished children who are born with cleft lip and palate. Volunteer doctors do free surgery that can change a child’s life beyond measure.
Since the founders pay all non-program expenses like overhead and fundraising, your entire donation goes to help the kids. Advisors include George Bush Senior, Walter Cronkite, John Glenn and John McCain. Contributions are tax-deductible, so it’s almost like Uncle pays you to do something nice. The website is www.smiletrain.org
* * Client Note -- Some of you have asked about switching your cash to a money market fund that focuses on Treasury investments. We suggest the Fidelity Treasury Fund Capital Reserves for this. It invests mainly in U.S. Treasury securities and repurchase agreements and presently has a 7-day yield of 4.05%. Please contact our firm if you want to make this change.
“We simply attempt to be fearful when others are greedy, and to be greedy
only when others are fearful.” Warren Buffett
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, nor is it a solicitation of any sort. Information is believed accurate but accuracy is not guaranteed.
-- Posted 11 July, 2006 | |