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International Minerals Corp. (TSX: IMZ)
International Minerals Signs Agreements with Chinese Company forFinancing and Construction of Rio Blanco and Gaby Gold Projects inEcuador
– November 15, 2010

We wrote briefly about International Minerals a few weeks ago in our Mining News Review.Although fundamentally undervalued, its growth profile relies on higherrisk development projects, primarily located in Ecuador. No doubt thisfinancing agreement is a step in the right direction, but by no meansdoes it guarantee the smooth and successful development of the RioBlanco and Gaby projects. If you want to speculate on gold producers inEcuador, we believe that for the time being there is a betteropportunity and its name will be familiar to subscribers. [Zurbo]

Imperial Metals (TSX: III; Pink Sheets: IPMLF)
Imperial Report Results of the Red Chris Feasibility Study Update
– November 16, 2010

This feasibility update demonstrates thatmines aren’t born in a day given that it represents only a minor changeto operating parameters originally envisioned in 2005. Moreover, themind-boggling deeper drilling results apparently are having no impact onthe mine plan at this point despite such results being among the bestgold-copper grades ever drilled anywhere. Then there is the question ofthe Northwest Transmission Line and when it will be built — minedevelopment is dependent on it, which explains in part the apparent lackof hurry by Imperial. Based on the feasibility study, the company doesnot appear to be particularly undervalued although if the deepermineralization is incorporated in a future mine plan, the shares wouldlikely deserve a re-rating. Those interested in a position now shouldfind out how the deeper mineralization fits into the puzzle because thatis where most of the upside resides. [Silverax]

Fronteer Gold (AMEX/TSX: FRG)
Fronteer Intersects 12.30 g/t Gold Over 50.4 Metres at Long Canyon Gold Project, Nevada – November 15, 2010

Although located in a corner of thecurrently-defined deposit, these holes should make it clear to alldoubters that Long Canyon will be a gold mine. Now that Fronteer hasconsolidated 100% ownership by acquiring the joint venture interest ofpartner Au-Ex Ventures, it will be full steam ahead toward development.We wouldn’t be too surprised if this turns into a bigger fish (Barrick?)eating a big fish (Fronteer) eating a little fish (Au-Ex). We arethinking about finally taking a position on a significant pullback.[Silverax]

New Gold (AMEX/TSX: NGD)
Collegiate Appeals Court Rules in Favour of New Gold in Relation to Cerro San Pedro Environmental Impact Statement – November 15, 2010

This is not the final say but things areagain going in New Gold’s favor on the legal front at Cerro San Pedro.Our suspicion remains that future legal developments could have anegative, if temporary, impact on the share price and our preferencewould be for the company to simply sell the mine. On the other hand,ongoing development at New Afton and potential progress at the El Morrojoint venture with Goldcorp are more than enough to offset futureproblems at Cerro San Pedro. All in all, New Gold remains one of themore solid mid-tier gold producers that trades at a decent valuation.And they have long-dated warrants to boot. [Silverax]

Medusa Mining (ASX/LSE: MML; TSX: MLL)
Medusa Mining Limited: New Co-O Plant to Increase Production Capacity – November 16, 2010

The share price has done very well since we featured the company about a month agoin a comparative analysis in which we assumed a 25 year mine life butno expansion in production. With this latest news that Medusa plans todouble production, the company’s valuation will obviously look evenbetter. Indeed, using the same scenario “B” assumptions as in thatanalysis and factoring in for the doubling of production, Medusa’starget valuation rises to about $9 per share, which represents decentrelative value in this market. [Silverax]

Uranium One (TSX: UUU; Pink Sheets: SXRZF)
Uranium One Announces Record Sales of 1.7 Million Pounds and Lower Cash Costs – November 15, 2010

Buried in the earnings release is a notethat may not seem very material to Uranium One but is of relevance to anumber of small uranium developers with ISR (in situ recovery) uraniumrecovery projects in the U.S. Namely, Uranium One announced that itsMoore Ranch ISR project in Wyoming has been approved by the U.S. NuclearRegulatory Commission. This is the first such approval in about 13years and brings hope to a number of uranium developers in states suchas Wyoming, Utah, New Mexico and Texas that projects meetingenvironmental and regulatory guidelines can in fact be successfullynavigated through the opaque red tape. Uranium One itself appears to bean interesting uranium producer that is potentially undervalued butexposure to Kazakhstan and a complex ongoing transactionrequire some careful analysis before jumping on board. The pro formacapitalization of the company after the transaction will be about 1billion shares and net debt of approx. $150 million. At the moment thecompany is struggling to make a profit even with its low cost ofoperations, but a rising uranium price combined with increasingproduction (10.5 million lbs in 2010, growing to 15-20 million lbs overthe next 5-10 years) are expected to greatly improve the bottom line.[Silverax]

Talison Lithium (TSX: TLH; Pink Sheets: TLTHF)
Talison Lithium Reports Financial Results for the 2011 First Quarter Ended September 30, 2010 – November 15, 2010

This past quarter the company producedroughly 12,000 tonnes of lithium carbonate equivalent (LCE), and aims toeventually grow production to a quarterly rate of about 15,500 tonnesLCE. Currently Talison is generating about $5M EBITDA per quarter, orabout $3M per quarter in net earnings. With over 100 million sharesfully diluted (all stock options are in-the-money), that works out toP/E of about 45. Considering the modest growth profile, at first pass wedon’t see how this valuation is justified without attributingsignificant value to the company’s other early-stage projects. [Zurbo]

Robex Resources (CDNX: RBX; Pink Sheets: RSRBF)
Nampala, Awarding of Contract for Feasibility Study – November 15, 2010

Robex has quite a few projects in Maliincluding the Nampalo gold project that bears some similarities toOrezone’s (TSX: ORE; AMEX: OZN) Bombore project in nearby Burkina Faso.Both deposits have significant gold contained in soft saprolite rocksstarting at surface as well as depth and lateral extension potential. Ofcourse Bombore is much larger than Nampalo but the latter still has thepossibility of becoming a significant deposit in its own right (perhaps~1 million ounces) and its attractiveness is aided by the likelihood oflow capital development and low cost operation. Both Bombore andNampalo bear watching and although Robex is very cheap, it still hassome way to go and we prefer to watch developments for now beforeconsidering a position in the stock. [Silverax]

Southern Andes Energy (TSX-V: SUR; Pink Sheets: SHRNF)
Southern Andes Energy Inc.’s New Uranium Discovery at Accocucho Sur, Peru – November 15, 2010

Along with Macusani Yellowcake (TSX-V:YEL; Pink Sheets: MCYWF) and Vena Resources (TSX-V: VEM; Pink Sheets:VNARF), Southern Andes controls the Macusani Plateau of Peru whereseveral moderate-sized uranium deposits have been defined, surely to befollowed by at least several more. The trench results at Accocuchoindicate the presence of significant exploration upside on SouthernAndes’ concessions and these targets appear to be drill-worthy oninitial examination. Southern Andes also has interestingsilver-lead-zinc deposits in southern Peru that the company intends tospin off soon. But it is the Macusani Plateau that has us mostinterested as potentially an important emerging uranium district in theworld. BHP (NYSE/ASX: BHP; LSE: BLT) is already partnered with Vena inthe Macusani so we know that the majors have an interest. Interestingly,the combined market cap of Southern Andes, Macusani and Vena is under$100 million, which seems like a decent deal to us. [Silverax]

Uranium Resources (NASDAQ: URRE)
Uranium Resources’ NRC License Upheld as United States Supreme Court Denies Petition – November 15, 2010

Here we have another in-situ recovery(ISR) uranium mining license being granted in the United States —Uranium One (TSX: UUU; Pink Sheets: SXRZF) recently announced that itsMoore Ranch ISR project in Wyoming has been approved. While the overalltrend is exciting for uranium developers in the US, we can’t get tooexcited about the timeline involved for Uranium Resources (feasibilitystudies not expected to be completed until the end of 2011). Given thatit has the potential to eventually produce 3 million pounds per yearthis is one to watch longer term, but having run up above $2.00 from
.50 this August, it is probably fair to say this one has gotten a bitahead of itself. [Zurbo]

Ventana Gold (TSX: VEN; Pink Sheets: VENGF)
Ventana Acknowledges Unsolicited Bid
– November 17, 2010

It’s no surprise that Eike Batista’s EBXfund has made a bid for Ventana, but the $1.5 billion price on offer isquite amazing. After all, the recently reportedpre-tax net present value (NPV) of Ventana’s La Bodega project is“only” $804 million at $1,000/oz gold and a 5% discount rate. Thatcompares with a nearly $2.3 billion pre-tax NPV for Greystar’s adjacentAngostura project (using the same gold price and discount rateassumptions). Amazingly, Greystar is trading at a market capitalizationof about $530 million, well below where we sold it in late 2009!Considering that the development of La Bodega is likely to involveAngostura, the valuation disconnect is stark. That isn’t to say Greystarisn’t without its share of hurdles. For example, a public hearing onthe Angostura project is scheduled to be held on November 21, 2010, theoutcome of which will go a long way in determining the fate of theproject. If all goes well, this one has plenty of room to run. If not,the share price will probably take a beating, but we can’t imagineVentana would be left unaffected unless EBX’s bid has already beenaccepted. [Zurbo]

U.S. Gold Corp (AMEX/TSX: UXG)
El Gallo District Resource Estimate Update
– November 18, 2010

We’re talking about a $700 millioncompany that has now defined an 88 million silver-equivalent ounceresource on its flagship project. We think that’s a bit rich whether ornot you have the charismatic McEwen as your Chairman and CEO. [Zurbo]

Denison Mines (AMEX: DNN; TSX: DML)
Denison Mines Announces C$65,450,000 Private Placement
– November 18, 2010

Good timing on the placement. Denison’smarket capitalization is now approaching the $1 billion mark, perhapslarge enough to entertain a buyout of someone like Hathor Exploration(TSX-V: HAT). We’re only half serious, and the timing is probably a bitoff, but a deal of this sort down the road a bit wouldn’t surprise us.[Zurbo]

Esperanza Resources (TSX-V: EPZ: Pink Sheets: ESPZF)
Silver Standard Resources
(NASDAQ: SSRI)
Esperanza Rejects Silver Standard Proposal on San Luis Property
– November 18, 2010

Our valuation model shows that San Luisis worth about $250 million at current metal prices, which at a minimumwould make Esperanza’s 20% carried to productioninterest worth $50 million. From this perspective Silver Standard’s $20million + 1.5% NSR offer grossly undervalues Esperanza’s interest.However, at 30% lower metal prices (i.e. $950/oz gold and $19/oz silver)the project is worth about $135 million, or just $27 million forEsperanza’s share. Therefore we think this was more or less a fair offerusing the more typical long term metal price assumptions, but at thesame time we’re not at all surprised it was rejected especiallyconsidering Esperanza is carried to production. [Zurbo]

Metalex Ventures (TSX-V: MTX)
More Than 800 Commercial-Sized Diamonds Recovered from a 15m Drill Intercept from the T1 Kimerlite
– November 19, 2010

This news caused Metalex to roughlydouble on strong volume, but we are left unimpressed,  if only for lackof disclosure. For example, the news does not give us any information onthe number of carats recovered and no description about the size of thepipe. Based on the number of holes drilled it seems like we could belooking at something large enough to be of interest, but we can’t findany information and the company’s website was of no help at all.

Given the stocks spiky trading action,there might be a trade worth considering if it sells off back to aroundC
.50, but until the company does a better job at disclosinginformation this simply isn’t something that we’ll be able to approachfrom a fundamental angle. [Zurbo]

Disclaimer:  We own shares in several of the companies mentioned in this analysis (Metal Augmentor subscribers know which ones), but no compensation has been received fromany of the companies mentioned. This is not investment advice; shouldyou seek investment advice we recommend you discuss the company with alicensed investment advisor or broker.