-- Posted 11 January, 2007 | |
Pennaluna Prospector: Northwest Mining Stock News -- Coeur d’ Alene, Idaho --
January 10, 2007
Every New Year brings with it boundless possibilities, and this one’s no exception.
Many miners up here are especially pleased about one specific possibility offered by this particular New Year: the prospect that over the next twelve months money from outside the region will continue flowing into area mining ventures – and perhaps even increase.
Consider the news items below on U.S. Silver, Timberline Resources, and Strategic Nevada Resources. All involve financing from beyond our little corner of the woods.
Maybe the stodgy, old Coeur D’Alene Mining District and environs are making their way back onto the radar screens of money men (and women) after lo these many years.
And why not?
During the past century or so the District has produced over a billion ounces of silver -- along with millions of tons of lead, zinc, gold, copper and other minerals. Some geologists say at least that much is still waiting in the ground.
Environmental problems are being solved. Exploration technology is light years ahead of the old days. Despite corrections, the metals market is in relatively wonderful shape. Plus, there’s no Senor Presidente in the Silver Valley whose dream it is to nationalize entire industries.
While we wait to see if there’s an actual trend in all of this, here are a few of the developments that have some folks around here whistling a happy tune as we start 2007.
* * U.S. Silver Corporation, the formerly private firm headquartered in Wallace, has completed its merger into Chrysalis Capital III Corporation, a publicly traded Canadian company. Shares are trading on the TSX under the new symbol “USA” and the firm expects soon to change its name officially to U.S. Silver Corporation. USA is now about 60 cents Canadian.
Last summer, the firm bought the Silver Valley properties of Coeur d'Alene Mines. This included one asset that’s now operating: the Galena Mine… and two that aren’t: the Coeur Mine and the 5,000-foot deep Caladay exploration shaft.
U.S. Silver has said it plans to boost spending on exploration and development, but there’s no official word on expected production levels at the Galena this year. Outfits with property under lease around the Galena include American Silver (PinkSheets:ASLM)… Sterling Mining (OTCBB:SRLM)… and Silver Buckle Mines (PinkSheets:SBUM).
* * Timberline Resources (OTCBB:TBLC), the Coeur d’Alene exploration and drilling outfit, closed a $2.7 million private placement of stock just before Christmas. About three quarters of the money came from Praetorian Offshore Ltd.-- a Miami firm headed by wunderkind stock picker Harris Kupperman. At the ripe old age of 18, he made news by blowing out most of the competition in a major investing contest held by TheStreet.com.
Timberline says much of the new cash will be used to buy additional drill rigs for its Kettle Drilling subsidiary, where the equipment could generate new revenues of about $6 million annually. The rest will go toward projects in its Exploration Division and for general use. TBLC moved up to the Bulletin Board last July. Shares were about 75 cents then. Now they’re about $1.45.
* * The Northwest Mining Association held its annual convention last month and for the first time in 112 years it wasn’t in Spokane. Instead, about 2,000 folks turned out in Sparks, Nevada. The conference will return to its hometown next December.
* * Strategic Nevada Resources (TSX:SNS) of Vancouver, B.C., last week became new owner of the Crescent Mine. The Crescent -- once part of the storied Bunker Hill complex in the Silver Valley -- was a high-grade silver mine that reportedly produced over 25 million ounces at an average grade above 27 ounces a ton. It sits between the Sunshine Mine (300 million ounces of silver produced) and the Bunker Hill (100 million ounces). After it closed in 1982, the late Valley geologist Don Springer reportedly calculated total proven, probable and projected ore remaining as nearly 400,000 tons at an average grade of 27 ounces of silver per ton.
Today, the company announced a private placement through a Canadian financial firm. This could bring it nearly CDN$ 6 million to use for rehabilitation and exploration work at the mine and for general needs.
The firm recently tapped Brian White to be staff geologist; he has substantial Coeur d'Alene Mining District experience. It also added two new Board members: Tom Fudge, long time Hecla mine manager and VP-Operations, and Dr. Ishuing Wu, a Harvard-trained economic geologist with over 30 years of exploration work for many big name miners. SNS is trading at around 83 cents Canadian.
* * Coeur d'Alene Mines (NYSE:CDE/TSX:CDM), our neighbor on Fifth Street, reports good construction progress at its new San Bartolome silver mine in Bolivia’s historic Potosi region. It says work should be finished late this year. Coeur expects the mine to produce six to eight million ounces of silver annually.
Meanwhile, news that Bolivia's leftist government is pondering major new tax hikes for mining companies has sparked another round of investor jitters. (Recall that last year the country nationalized its energy industry.) CDE has been trading recently at about $4.25.
* * Yamana Gold (TSX:YRI/AMEX:AUY), the Toronto-based miner that once headquartered in Spokane, will soon have its shares listed on the NYSE. President Peter Marrone will kick off trading when he rings the Big Board’s opening bell on Friday.
Auld lang syne: we recall Yamana struggling through the dark days of the mining depression, carefully nursed along by founder Dick Walters. During those hard times early in this decade, it traded at a dime... now it’s above CDN$14.
[Ed. Note: Dick Walter’s new baby, Little Squaw Gold, has news out also. See below.]
* * Sterling Mining (OTCBB:SRLM) of Wallace said this week it passed the halfway mark in work to connect the Sunshine Mine’s Sterling Tunnel with the Polaris Drift-Silver Summit Tunnel. Progress is ahead of schedule.
The firm says the finished project will provide a new escapeway, mine ventilation and drill platforms for test targets. SRLM shares are trading at around $2.80.
* * Mines Management (AMEX:MGN) reported last week that it’s proceeding with underground evaluation drilling at its massive Montanore silver and copper project over near Libby, Montana. Montana DEQ recently approved the program.
The Spokane firm is now working on surface facilities, utilities and infrastructure at the project, which is estimated to hold up to 260 million ounces of silver and 2 billion pounds of copper. Last spring, MGN climbed to a hair above $10. These days it’s changing hands a bit over $4.50.
* * Little Squaw Gold (OTCBB:LITS) last week announced it closed a private placement for a little over $3 million in cash. Earlier, the firm reported that field studies of the Aurora Gulch prospect on its Chandalar District gold ground in Alaska found a mineralization style not identified before in the district. It says this may indicate large disseminated gold deposits that might lead to bulk mining possibilities on the nearly 14,000 acres it controls -- in addition to the high-grade gold veins it’s been drilling.
Headed by president Dick Walters, LITS a year ago traded at about a quarter. It’s now around $1.20.
* * Canadian income and royalty trusts plunged two months ago when Finance Minister Jim Flaherty blind-sided the market with a scheme to put new taxes on many of them – despite a campaign promise not to. Now the government has issued proposed rules, and they’re milder than first feared. They allow some continued growth, impose no capital gains if trusts convert to corporations, and offer other comforts. (See details at www.fin.gc.ca/news06/06-082e.html).
As political infighting heats up in Ottawa, there may be further easing in store. Some observers think the worst-case scenario may already be priced into trusts and now see promise in some of them. It may pay to keep an eye on this.
* * Idaho General Mines (AMEX:GMO) says it’s reorganizing management and looking for a new CEO and CFO. The new chief executive will succeed Robert Russell, who is to continue as president and chairman.
The Spokane outfit owns the Mount Hope Molybdenum Project down near Eureka, Nevada. It’s estimated to hold over 1.3 billion pounds of recoverable moly and is in the permitting stage. GMO is trading now at about $2.30 --- up from a 52-week low of about 85 cents, and off a high of $4.15.
* * Stillwater Mining (NYSE: SWC) broke with tradition last month when it paid about US$1.8 million for over 4 million shares of Vancouver-based Pacific North West Capital Corporation (TSX:PFN). PFN explores for and develops platinum group and base metal projects in North America.
Stillwater previously focused only on its own projects but says it will now pursue outside opportunities as well. The Columbus, Montana miner is the only U.S. palladium and platinum producer and the largest primary producer outside South Africa and Russia. SWC currently trades around $11.30.
* * The Pink Sheets continue to upgrade. In March it will launch a new premium trading venue called OTCQX, for firms with substantial operations and extensive public disclosure. (See www.otcqx.com for more.) Later this spring, it’s set to unveil new categories for stocks that are quoted on the traditional Pink Sheets. The new groups will be based on level, quality and timeliness of disclosure. Check www.pinksheets.com for info.
Innovations in recent years at the century-old quotation and trading venue have boosted trading volume and attracted about 200 market makers, including this shop.
* * Shoshone Silver Mining (PinkSheets:SHSH) of Wallace has hired Alan Gilda to manage the Lakeview Mill rehabilitation and to develop engineering projects for its North Idaho properties. He holds a B.S. in Mining Engineering from Montana College of Mineral Science and Technology and has worked in the mining field for a quarter century.
Shoshone was started by the late Irv Schiller nearly 50 years ago. In the past, it produced silver, gold and base metals at its Lakeview, Keep Cool and Weber mines in North Idaho. It has expanded its area holdings, and also has a JV project at its Bilbao Mine, a silver play in Mexico’s historic Zacatecas Mining District. SHSH is trading lately at about thirty cents.
* * HuntMountain Resources (OTCBB:HTMN) reports it inked a letter of intent to acquire 100% interest in the Bajo Pobre gold property in Santa Cruz Province, Argentina. Last month it announced the start of a diamond core drilling program at its El Gateado project, a 100-square kilometer gold and silver concession also located in Santa Cruz Province.
The Spokane firm earlier reported that winter weather suspended Phase 1 drilling at the Dun Glen project in Nevada, with results for completed holes expected soon. A year ago HNTM was about two bits. Now it’s up around 70 cents.
* * Tax Savings -- It’s almost time to send your tax dollars off to the Imperil City. But it’s still not too late to save some money by funding your traditional IRA for 2006 and taking a deduction on last year’s taxes. You have until April 15. Reminder: the IRA contribution limit is $4,000 for tax year 2006 … and folks who were at least 50 years old then can add an extra “catch up contribution” of as much as $1,000. (You can do this with a Roth too, but no deduction.) Check with your tax advisor.
* * New Jersey Mining (OTCBB:NJMC) reports staking a large new property in the Murray area, not far from its Golden Chest mining operation. The firm says the new CA prospect is a geophysical anomaly discovered some years ago by Cominco American (now Teck Cominco) and covers two-square kilometers.
New Jersey says it has about 6.7 million tonnes of resources at the Golden Chest and the nearby Niagara copper-silver deposit. The Kellogg outfit plans to drive an underground ramp at the Golden Chest to expose the deep Idaho gold vein; drill the Niagara deposit to confirm and increase resources; and drill the Gold Butte deposit, another nearby property. NJMC is trading now at about 50 cents.
“Gentlemen, you can’t fight in here! This is the War Room.”
From Dr. Strangelove
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. Mention of a security does not imply an endorsement. Comments and opinions are solely those of the writer. This publication is not investment advice, is not a research report, is intended solely to provide readers with information, is not a solicitation for the purchase or sale of any security, and is not intended to be nor to be used as tax advice, which should be sought from a professional familiar with your individual financial situation. 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 11 January, 2007 | |