HUARAZ, Peru – This is Paul Zweng. He invests in a handful of gold and silver mines in Indonesia, Zimbabwe, Mexico. Some copper, too.
Paul Zweng is dying to know what I found out today (literally) at what looks to my eye like the richest poly-metallic veins currently under extraction in Peru. That would be straight up the 26-meter ladder I climbed Tuesday to the richest slice of the Bateras offshoot of the Caylloma Mine, some 5,400 meters or so above sea level.
I have more about Fortuna Silver Mines (TSX: V.FVI, Stock Forum) just below. You might make some dough here.
But first. Paul Zweng, 52, geologist, Hawaii resident, former mining CEO, likes to bird-watch. He collects plant seedlings and takes them back to Hawaii, where he lives with his family. I have known him for years and years.
Paul’s ideas make people like me a lot of money. His small hedge fund Resource Venture Advisors is up 120 percent year to date.
Paul earned a doctorate in geology from Stanford University in Palo Alto, California. His hedge fund in November rose 22 percent and currently is rock solid. He is this year making a fortune for clients.
Paul as a CEO sold a Mongolia gold company called QGX a few years back. He also started Antares Minerals (TSX: V.ANM, Stock Forum).
His dream: “I want to take something from zero to production with as little money as possible,” he says as we hop across another company’s Peruvian dream: Focus Ventures’ (TSX: V.FCV, Stock Forum) Nueva California in central Peru. “I want to call the shots. I want to make quick and logical decisions.”
I want to be on Paul’s board. Everyone likes Paul.
Everyone likes Paul until he starts questioning each premise that a VP of exploration, a fellow geologist, a mining CEO, promoter or geochemist throws at him. Then some of those folks get rattled.
That’s Paul Zweng in a photo I took five days ago at the Focus Ventures map and core sample shed. You can see, he is getting ready to pop Mark Slauenwhite (foreground), VP of Exploration for Focus, some queries.
I like Paul. I like when he rattles companies. He is a tall guy with an easy grin and a persistent nature,and a great micro-camera for shooting drill core pictures.
Paul spent three years working rock and forming opinions about copper and gold structures in Peru. On this day, we are at poking around Nueva California in Peru’s Cordillera Blanca. Simon Ridgway and Ralph Rushton’s Focus (TSX: V.FCV, Stock Forum) is prospecting for gold in several locations in Peru. The South American nation is the world’s sixth largest gold producer.
This Nueva California property has been producing something like 6- gram gold for Peruvian miners for 26 years … and it is on this day. By the way, Focus and Fortuna (where I am today climbing those ladders for rock-em-sock-em silver), are sister companies under the umbrella Goldgroup of Vancouver, Canada.
Focus has no designs on producing. It prospects. “That is our charter and our message to the market,” Mr. Slauenwhite of the Focus team tells me. “Using decades-old maps and logs to start the search in Peru.”
Paul Zweng sizes up producing mines and prospective mines. Like most geos, he likes to prospect. Paul is a quick read and reminds me of the book “Blink” by Malcolm Gladwell. He trusts the direction of his instincts.
“I think these guys (Slauenwhite, Focus Ventures President David Cass) want the massive high-grade tonnage they think is in here. But I tend to think it is the halo around that that makes this property work,” he says. “An open pit. You get some very rich hits in between pockets of 0.8 gram gold. Everyone walks home with gold.”
We are climbing above the camp, looking at stockpiled ore, possible drill hole targets and the bluest sky Peru can offer at 2,500 or so meters’ altitude.
On this day, Paul thrusts a hoary looking rock at me. This, he says, is one of his favorite telltale characteristics of potent mineralization underground … and sometimes in outcroppings above ground: “Cheerio Rock.”
Most geologists have pet theories and Paul has one too. Cheerio Rock is textured, stock work rock that is formed in a mineralized fault of some type, according to Mr. Zweng. “That’s a fancy name for veins,” he says of faults.
Today there are Cheerio Rocks everywhere at Nueva California. We go underground with VP of Exploration Mark, whose grin makes him “separated from Warren Beatty at birth,” and David Cass … and a few others, including Goldgroup financier Simon Ridgway, who at age 60 is in fine form and reminds me of the actor Gene Hackman.
Paul is the last one out of the cave. He always is.
He loves Peru. “It’s two and three kilo country for silver in some spots.” (Thom note: At 5,000-meter-high Caylloma Mine where I am this week in Peru, silver, copper, gold and zinc grades can run among the highest in the world per metric ton.)
“The gold, when you find it here,” says Paul, “usually leads you to a lot more gold.”
Paul is on this trip with me to see this Nueva California prospect in central Peru. His questions are penetrating when we exit underground.
Slauenwhite can take it. He spent 11 years working Peru for Barrick Gold (TSX: T.ABX, Stock Forum), which is making so much money in this country it puts on big billboards and pretty posters inside airports.
“We are looking for a two million or three million disseminated bulk tonnage deposit that is open pit,” Mark says as we comb over a map of the concessions that Focus controls in the Pereina Gold District. Look at Pereina (which we fly over later) – its infrastructure is all paid off and it gets 0.3 grams a ton and turns a profit. We think we can get 1 gram or better.”
Paul smiles and later says, “I like the halo, and if they hit some rich veins, good.”
Enough for now on Paul. I am here to see silver and poly-metallic deposits at sister company Fortuna Silver’s (TSX: V.FVI, Stock Forum) Caylloma Mine, where I am at this moment – nosebleed high. There are veins at Caylloma that Spanish prospectors mined for centuries. (The photo above I snapped is a piece we just chipped off the Bateas section of the concession.) That little piece, CIBC World Markets analyst Brian Quast tells me, represents 8,000 grams of silver/tonne. There is a slog-load of it, at depth, at strike, at length. Even Fortuna lead geologist Martin Flores and Peruvian IR guy Carlos Baca are impressed. Too bad Paul Zweng is not here to see it. (Paul -- afraid of heights? “Not money heights,” he says.)
Above us there is a lot more of it. The silver, I mean. It streaks and streaks in the rock above our heads. Every time you shake and scrape the rock, an American or Canadian dollar or two evaporates.
Brian is a big-bank analyst on this tour. He tells me that Fortuna is his smallest coverage company and one that is cheaper than nearly all of its peers. He’s from Australia. I’d watch him if I were interested in silver, which I love above almost all metals.
Fortuna Silver has been producing high silver content and lead, zinc and other metals for at least two years. “They are ramping up. They spend money like it is their own,” says Mr. Quast, 35 years old, with degrees in law, metallurgy and business administration.
Revenue at Caylloma is estimated this year at $41 million, sharply higher than 2008. The proven and probable – reported – on Fortuna Silver’s Caylloma Mine is 20 million silver-equivalent ounces.
We are at this moment viewing data and maps that are as of yet unreported – so the data are on a background basis. I cannot buy the shares until that information is released.
Candente: I also am in Peru this week to talk to the folks at Joanne Freeze’s Candente Resource (TSX: T.DNT, Stock Forum), a Ticker Trax Planetary Prospect that owns copper and gold projects in the country and is spinning out a Mexico gold mining company (Candente Gold’s El Oro purchase) on the Canada stock market.
As with all Ticker Trax Planetary Prospects, I own shares of Candente and am purchasing more of the cheap stock every chance I get. When a financing and spinoff of the Mexico and gold assets company are completed, Candente Gold will be in my portolio, too, because Candente Resource shareholders receive them on a split basis.
LONG ARTICLE: This is all part of a long article for Ticker Trax subscribers, who receive it first, and then the Stockhouse audience, who also deserve to make lots of money from natural resources even if they cannot afford to pay for subscriber service.
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COLOMBIA: I am in possession of LOGS, MAPS AND SURVEYS that involve several Colombia gold companies and possibly link gold veins and other structures in and around Marmato some three hours outside of the boom metals and orchids city of Medellin, which was my home many years ago.
Energy and gold in Colombia and gorgeous Medellin and surrounding departments, or provinces, are hotter than the chili peppers at some of the outdoor markets one frequents in 
Mexico.
The properties with promise include Guayabales, where I am pictured above courtesy of Canadian Shield’s Keith Laskowski. Mr. Laskowski consults on this Marmato-neighbor property on the border of Antioquia and Caldas departments near Medellin.
Upper Marmato, which is controlled by Medoro Resources (TSX: V.MRS, Stock Forum), is showing that with a cutoff grade of 0.30 g/t Au, the wildcat zone of this politically conflicted and overrun mountain almost surely will have not less than three million ounces of measured and indicated gold resources. This is according to data and other logs I have.
Medoro’s property on Marmato, which requires the expertise of a legion of diplomats and the guiding hand of new VP of Exploration Vicente Mendoza from Venezuela, is subject to further negotiations with Mineras Nacionales for the lower-half underground systems. I believe the Medoro team in Colombia and Canada can clean up the landslides, the Persian Blue streaks of cyanide, the illegal mining and a town relocation because it has the political connections in Colombia.
This belief is based in part on thanks to Serafino Iacono in Bogota and to others’ vast success with energy company Pacific Rubiales (TSX: T.PRE, Stock Forum), which has mushroomed overnight into a 100,000-barrel a day producer of oil. (Translation: Lots of folks got way rich on Pacific Rubiales here in Colombia.)
I 
visited PRE’s flagship oil field in Colombia almost two weeks ago. Pictured here from Bogota are (from left), entrepreneur Serafino Iacono, U.S. Global’s Frank Holmes and me, celebrating Christmas early in one of the city’s decorated parks.
There is early speculation that Medoro will bid on Colombia’s famous Frontino Mine beneath the town of Segovia. Frontino has historic production of 4 million or more gold ounces, I believe. Yet the property, still producing, is controlled by bankruptcy/reorganization trustees and representatives of provincial governments, all for the sake of many as 1,300 retired miners.
Medoro’s head of geology, Hernan Ortiz Delgado, worked at the Frontino mine in the 1970s and has written a book about its veins and geology. In that book, one photo shows Mr. Ortiz Delgado and a Frontino team of miners with now-famous geologist Richard Sillitoe.
The Frontino Mine’s price for bidders is said to be $140 million or more. I have a document that says so. I think Medoro has the palanca and the dough to make it work. Just as importantly, Mr. Mendoza and Mr. Hernan Delgado have the geology history and some maps that will blow your mind.
Medoro, whose shares I have owned since its Colombia Gold Fields days almost two years ago, might be poised to become another Pacific Rubiales. PRE went to $4 billion market cap from $200 million in less than two years. (Lots of people got rich.) I plan to return to Colombia right after Christmas. I might never come back.
- Oremex (TSX: V.ORM, Stock Forum): This tiny thing in Mexico’s Durango state is attempting to salvage an ejido community ravaged by previous ownership. John Carlesso and Grant Hall, who I just saw in Colombia, have been working on this silver situation for about a year or more. VP of exploration Stuart Moller of Continental Gold (a Bob Allen spinoff of nine Colombia properties engineered by Toronto’s Ari Sussman) is heading a Colombia project at Buritica that I have seen and that I will have much more to report about in coming days and weeks. Stuart Moller tells me new CEO Mike Smith, formerly of Barrick, is the one person to take Oremex’s potential 50 million-ounce resource to new heights. He has a lot of work ahead of him consoling peeved surface rights owners in the area … and I do not own the shares. But if Michael Smith succeeds in mending fences, the shares will rise 10-fold from their current 16 or so cents. Oremex just raised a half-million Canadian dollars on the promise of its silver.
- Gary Freeman and Mel Herdrick’s Pediment Gold (TSX: T.PEZ, Stock Forum) is reflecting the company’s sealed deals with ejido surface rights owners. The company’s managers say everything is in place for a Baja, Mexico gold district at San Antonio – if results continue to outpace expectations. So far, they are. Ticker Trax is considering the company as a Planetary Prospect. I have yet to see its second La Colorada project on the Mexico mainland.
Coming:
Vancouver Resource Investment Conference, Jan. 17-18.
TC on TT™
Ticker Trax ™ and Thom Calandra are in Colombia and Peru. Our latest Planetary Prospect is Colombian Mines Corp. (TSX: V.CMJ, Stock Forum). Bob and Gloria Carrington’s Yarumalito Project within CMJ is not more than 15 kilometres as the crow flies from El Marmato. I have been there.
(Please see: Thom Calandra’s Stockhouse articles. Thom does own each of the Planetary Prospects in subscriber-supported Ticker Trax™. Thom owns shares of Medoro Resources and has for 18 months. He owns Candente, a Planetary Prospect.)
Ticker Trax™
Please see tickertrax.com to learn more about this wealth service and its 11 Planetary Prospects. Also, please see its breakout feature examinations of two Ghana gold prospectors, one Guyana prospector and gold producer and one molybdenum mine in British Columbia proceeding toward its own metals factory. Subscribers, please click here for password-secure Ticker Trax.
HOLDINGS: Thom’s stock holdings are listed for all Stockhouse members on www.Stockhouse.com under the “portfolio setting” for user TCALANDRA. It is public and free to view. He also owns recently minted gold and silver coins and shares of two private companies, one in South Africa and the DRC (Congo). Thom does not do private placements or accept payment in return for coverage. Thom participates in select company-sponsored and company-paid tours of mining sites after examining the properties off-site for many months and in some cases, years. Focus and Fortuna were sponsored tours. I do not own the shares.
THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded and was executive VP of news for CBS MarketWatch and MarketWatch.com. As the voice of Thom Calandra's StockWatch and The Calandra Report, Thom pegged $300-ounce gold as a long-term hold and dyed his hair blonde multiple times as gold surpassed $400, $500 and $600.
Ticker Trax™ is published by Stockgroup Media Inc. Ticker Trax is an information service for subscribers and neither Stockhouse nor Thom Calandra is a broker or an investment advisor. None of the information contained therein constitutes a recommendation by Mr. Calandra or Stockhouse/Stockgroup Media that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Ticker Trax does not purport to tell or suggest the investment securities subscribers or readers should buy or sell for themselves. Subscribers and readers of Ticker Trax should conduct their own research and due diligence and obtain professional advice before making any investment decisions. Ticker Trax will not be liable for any loss or damage caused by a reader’s reliance on information obtained in the reports. Subscribers and readers are solely responsible for their own investment decisions. Opinions expressed in Ticker Trax are based on sources believed to be reliable and are written in good faith, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. All information contained in Ticker Trax should be independently verified. The editor and publisher are not responsible for errors or omissions or responsible for keeping information up to date or for correcting any past information. Ticker Trax does not receive compensation of any kind from any companies that may be mentioned in the report. Any opinions expressed are subject to change without notice. Owners, employees and writers may hold positions in the securities that are discussed in Ticker Trax. PLEASE DO NOT EMAIL THOM SEEKING PERSONALIZED INVESTMENT ADVICE, WHICH HE CANNOT PROVIDE. Copyright 2009 all rights reserved.
