-- “Walter, you’re my goddamn [cussing] hero.” – John Travolta’s character, as Walter shoots him in chest/”‘The Taking of Pelham 1, 2, 3”
MEXICO CITY -- I have more gol’ dang heroes than a sombrero full of jumping beans.
Just so you know: I wrote this waiting for a flight the other day to Pediment Gold’s (TSX: T.PEZ, Stock Forum) San Antonio Project in Baja.
Analysts and writers are crawling all over Mexico this autumn. So are bankers, geologists, heap-leach artists and brokers. Mostly, they want silver and gold.
A non-public Vancouver entity, Goldgroup Resources (no relation to Fortuna Silver and Focus Ventures’ Peru and Mexico-leaning Goldgroup), today (Thursday) sealed a pact with Lundin Group's exploration company for a majority earned interest in El Caballo Blanco Gold Project. Sounds like yet another tiny company backing property into an eggshell with a plan to go public, right?
Yes. I count a dozen in Mexico alone this month of November.
Still, Goldgroup Resources’ $15 million transaction is yet another pinto bean in a mounting pile of legumes. “Legacy projects in Mexico, ones long ago abandoned or botched, are probably the hottest deal trend in mining,” Grant Hall of tiny Oremex Resources (TSX: V.ORM, Stock Forum) says.
Oremex is in the resurrection biz itself, trying to salvage what was a promising silver prospect in a dusty village in Durango state. Previous owners “did not score any points with the town,” Oremex Executive Chairman John Carlesso told me.
Mexico prospects – especially those previously dead in la agua – were front and center at a San Francisco natural resources conference this past weekend.
“Caballao Blanco was a dead horse with Canadian Gold Hunter,” Gene Arensberg of The Got Gold Report on Stockhouse tells me Thursday morning. “One newsletter writer I know was really big on this project. Now maybe the new company can drill the right holes.”
In the past two weeks alone, Mexico transactions pegged to Canada-domiciled prospectors number more than three dozen. They include:
- The big mother: Goldcorp (NYSE: GG, Stock Forum) buying Canplats (TSX: V. CPQ, Stock Forum) for cash and stock worth about $240 million Canadian. This one gives Goldcorp the vast El Camino Rojo Project some 30 miles from its Peñasquito Mine. “Many of us wondered what took this negotiation so long, what with Canplats having 60 million silver ounces and 3.5 million gold in M&I (measured and indicated category),” Endeavour Silver’s (AMEX: EXK, Stock Forum) Bradford Cooke says.
- Argonaut Gold just raised $150 million Canadian to support its cash takeover of Mexico and Guatemala miner Castle Gold (TSX: V.CSG, Stock Forum).
- Lincoln Mining (TSX: V.LMG, Stock Forum) is buying a small Chihuahua gold and silver prospect from Almaden Minerals (AMEX: AAU, Stock Forum). Almaden is also connected as an optionor to El Caballo Blanco mentioned above.
“It does seem like a frenzy, does it not?” Paramount Gold’s (TSX: T.PZG, Stock Forum) Chris Crupi tells me over dinner at Harris Steakhouse in San Francisco. Paramount three weeks ago raised $23 million to drill out a Mexico property at San Miguel. “We had 50 funds wanting a piece of this. A year ago, the stock was 30 cents.” The financing was completed at $1.25 per share.
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Legacy rules right now in Mexico.
At Pediment Gold’s San Antonio Project in Baja, geologist Mel Herdrick took me (and accompanying geologist Mickey Fulp) across thousands of hectares of property that Echo Bay Mines stalked in the late 1990s.
“I’m a geologist, not an economist, hombre,” Mel says as we slap our hammers at yet another slab of Echo Bay-conditioned rock. “But with these prices – prices few people and even fewer junior miners could have forecast in 1997 and ’98 and ’99 – you can see why the airports here are packed.”
Mexico, you are my goddamn flag-nogging hero.
- Looking for cheap silver: The price is at a 16-month high (and going far higher). Chartist Ian McAvity suggests a Canada-only traded silver trust, The Silver Bullion Trust (TSX: T.SBT.UN, Stock Forum). “The TSE trades it in Canadian and U.S. dollars and the market maker is, well, inefficient to say the least. It sells for a discount to the physical silver in its (Regina, Canada) vault. Just put up a stink bid and let it sit.”
- Guyana: On Monday or Tuesday, Guyana’s Sandspring Resources (SSP) will start trading in Canada. The security stems from ETK, the John Adams family’s working mine that I visited last month in the English-speaking nation just next to Venezuela. The shares are set to open at 35 cents Canadian. The new stock at that 35-cent price (book value for the Guyana property is rated 55 cents a share) is among North and South America’s 10 cheapest gold stocks ranked by per-ounce price in the ground.
TC on TT™
Ticker Trax ™ and Thom Calandra are headed to Colombia and Peru in seven days. I’ll be kicking rocks at four or five companies and partaking of life in Medellin and Cartagena.
(Please see: Thom Calandra’s Stockhouse articles. Thom Calandra owns no shares of Mexico’s Pediment Gold. He owns zero shares of Paramount Gold. Nor does he own Fortuna, Focus or Oremex. He has no interest in Sandspring. Thom does own each of the 11 Planetary Prospects in subscriber-supported Ticker Trax™. These include Endeavour Silver, referenced above. In addition, he owns shares of Almaden Minerals, which also is referenced in this article. Thom also has informed Ticker Trax subscribers that he intends – but has yet to – purchase shares of Mexico-focused Animas Resources.)
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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 company 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. Thom does not do private placements or accept payment in return for coverage. But you can buy him a cold beer in Cabo or a double Grey Goose in Toronto. Thom participates in select company-sponsored and company-paid tours of mining sites. He is headed in two weeks to Colombia and Peru.
THOM CALANDRA of Ticker Trax helps his audience find value in a quagmire of investment choices. Thom co-founded 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.
