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Great Pumpkin Edition -- Northwest Mining Stock News

By: Tom Wobker

-- Posted 27 October, 2006 | |

Pennaluna Prospector: Northwest Mining Stock News -- Coeur d’ Alene, Idaho --


As October rushes headlong toward Halloween, things are getting scary.


Frightening half-human creatures roam the land.  Hideous zombies lurch mindless through the night.  Unholy vampires prowl the shadows, seeking the blood of the living.


Yes, Election Day is straight ahead and politicians are all over the place. 


While we wait to see where these peculiar life forms will lead the Homeland in the future, the bull market in mining stocks sits quietly, ensnared by soft prices and lackadaisical trading.


We continue to feel about the market slowdown as we have since it started: this bull is not dead; it’s only resting.  We expect to see it up and galloping again before too long. 


But exactly when, is the question.  After elections?  After year-end tax loss selling? 


Unfortunately, the dog ate our ouija board.


In the meantime, miners out here in silver country continue to keep quite busy.  Following are some of the new developments up in our neck of the woods…



* *  Coeur d'Alene Mines (NYSE:CDE/TSX:CDM), our neighbor on Fifth Street, said last week it has started work on a $29 million tailings facility at the San Bartolome silver mine in Bolivia.  This is in the storied Potosi region of the country, where silver has been king -- sometimes a cruel one -- for over 450 years. 


Coeur expects to finish the mine by the end of next year and to produce about eight million ounces annually.  Amid some investor jitters over Bolivia's new leftist government, CDE has been trading recently at about $4.85.



* *  U.S. Silver Corporation, the private firm headquartered in Wallace, will go public by merging into Toronto-based Chrysalis Capital III Corporation (TSX:CYX).  Chrysalis is a Canadian pool company -- a firm that does an IPO, gets listed and then seeks acquisitions.  The deal is subject to the OK of regulators and U.S. Silver shareholders. 


U.S. Silver last summer bought the Silver Valley properties of Coeur d'Alene Mines, including the operating Galena Mine, the inactive Coeur Mine, and 5,000-foot deep Caladay exploration shaft.  The firm has said it plans to boost spending on exploration and development.  Outfits with property under lease around the Galena, which employed about 180 people last we heard, include American Silver (PinkSheets:ASLM)… Sterling Mining (OTCBB:SRLM)… and Silver Buckle Mines (PinkSheets:SBUM).



* *  HuntMountain Resources (OTCBB:HNTM) started an 8,000-foot diamond core drilling program at its Dun Glen Gold Project in northern Nevada, about 25 miles from Winnemucca.  The Spokane outfit says at least half of the holes will target high-grade gold shows located around historic mines of the late 19th and early 20th centuries.  Drilling will be handled by Kettle Drilling of Coeur d’Alene.  [Ed. Note: Kettle is part of Timberline Resources. See news below.] 


HNTM slipped to a 52-week low of 20 cents last January.  It’s now climbed back up to around 65 cents.



* *  Timberline Resources (OTCBB:TBLC) of Coeur d’Alene chalked up quarterly revenues of $2.5 million, courtesy of its new Kettle Drilling subsidiary.  Timberline, enjoying the luxury of cash flow, also paid off over a third of the money it borrowed to buy the driller last summer.


In other activity, Timberline’s exploration division inked a memo of understanding for a lease/option on the Conglomerate Mesa Gold Project in eastern California.  The big Carlin-type deposit was first explored by Newmont in the 1990’s, when the site was in a proposed wilderness area.  That proposal was later dropped.  TBLC -- now fully reporting and on the OTCBB with about 20 million shares out -- is trading at 65 cents. 



* *  Stillwater Mining (NYSE: SWC) over in Columbus, Montana says it expects to meet its annual PGM production and cost projections despite closures for summer wildfires.  Those forecasts called for about 600,000 ounces of production -- up from around 550,000 last year -- at a total consolidated cash cost of $300 to $315 an ounce.


Many Silver Valley miners 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 $10.90, down from a 52-week high of $19.



* *  Little Squaw Gold (OTCBB:LITS) reports promising results from first assays of summer exploration drilling at its gold project in Alaska’s Chandalar mining district, where it controls almost 14,000 acres of ground.  The Spokane firm says assays of 12 holes have been received so far.  Four ran between about three and nine grams of gold per tonne and one intercept showed over 16. 


Little Squaw also said a consultant’s preliminary evaluation of placer possibilities on the project -- where past small-scale placer mining yielded at least 29,000 ounces of gold -- found potential for a high-grade resource with over two million cubic yards of pay gravel.  LITS was only about 20 cents last fall, but now it’s trading up above $1.40.



* *  Atlas Mining (OTCBB:ALMI) announced quarterly revenues of  $1.2 million at its Atlas Fausett contract mining division, which is working now at the Sunshine, Lucky Friday and Stillwater mines.  The Osburn firm also says it has applied for a permit to expand its Dragon halloysite clay mine in Utah, said to be the only commercial source outside New Zealand. 


For a small outfit, Atlas is broadly diversified.  It also holds mining and timber interests in North Idaho and copper and gold properties in Newfoundland.  From a low under 80 cents last winter, ALMI has climbed now to about $1.70.



* *  New Jersey Mining (OTCBB:NJMC) says its new concentrate leach plant up near Kellogg is about 60% finished and should be completed next quarter.  In other news, the firm announced discovery of a new gold occurrence it calls Gold Butte not far from its Golden Chest mine outside Murray.  


Shares of the Kellogg outfit, honchoed by Fred and Grant Brackebusch, have a 52-week low near 20 cents and a high around $1.25.  NJMC is trading now a little above 50 cents. 



* *  Sterling Mining (OTCBB:SRLM) of Wallace reports it will buy exclusive rights to the Big Creek tailings facility for its Sunshine Mine from a subsidiary of Vancouver-based Formation Capital Corporation (TSX:FCO).  Sterling previously had joint use.  Formation also owns the Sunshine Precious Metals Refinery in Kellogg and the Idaho Cobalt Project, a deposit near Salmon.


Sterling also kicked off a new surface exploration program south of the Sunshine on about 800 acres it leases from Metropolitan Mines (PinkSheets:MEMLA).  SRLM shares are trading around $3.60.



* *  Apollo Gold (AMEX:AGT/TSX:APG) says remediation and development work is going well at its Montana Tunnels open pit mine over near Helena.  Last August, Elkhorn Tunnels LLC agreed to fund the project.  It can earn a maximum 50% interest in the mine by paying up to $13 million over a five-month period. 


Apollo closed Montana Tunnels last fall because of instability problems.  Since it opened in 1987, the mine has produced roughly 1.5 million ounces of gold and 28 million ounces of silver -- along with considerable zinc and lead.  AGT has a 52-week high-low of 16 cents and 86 cents.  Stock of the Denver firm trades now at around 38 cents.



* *  Minera Andes (TSX:MAI/OTCBB:MNEAF) of Spokane last month reported more results of exploration drilling on the Kospi Vein at the San Jose Project in southern Argentina.  Best holes returned 4.4 ounces of gold a ton and 364 ounces of silver -- the highest grades found on the vein so far.   Joint venture partner is the big Peruvian mining firm of Mauricio Hochschild & Cia. Ltda.


MNEAF dipped as low as 28 cents in the States last winter.  It’s trading now at about a buck.



* *  Idaho General Mines (AMEX:GMO) of Spokane announced last week that the BLM has finished reviewing its operation plan for the Mount Hope Molybdenum Project down near Eureka, Nevada.  The deposit is estimated to hold over 1.3 billion pounds of recoverable moly.  The company says it is the world’s largest moly project in the permitting stage.


GMO is trading now at about $2.15.  That’s up from a 52-week low of about 85 cents, but off from a high of $4.15.



* * Klondike Star Mineral Corporation (OTCBB:KDSM) says it has bought its own diamond drill rig, in an effort to side-step rig shortages and have more control in exploring its properties. 


The Seattle outfit holds interests in Yukon projects that total more than 350 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 $3.00.


“ People never lie so much as after a hunt, during a war or before an election.”
                                                                                           Otto von Bismarck



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 general information and is not a solicitation for the purchase or sale of any security.  It is not intended to provide personal investment advice and does not take into account the specific investment objectives, financial situation and particular needs of any specific person who may read it.  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 27 October, 2006 | |

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