BullMarketRun.ca

May 2, 2012

15 Comments

1. 

   From Peter Grandich

   Sunridge just announced the results of the Prefeasibility Study on the Asmara North Projects in Eritrea. The Study shows an NPV of the project to be to be $555 million, with a 10% discount applied ($1.642 Billion with 0% discount)! I believe this has far exceeded everyone’s expectations. It’s hard to imagine (but in this grueling bear market in junior resource stocks who knows) that this can’t result in a re-rating of the stock over the coming months as both buy and sell side analysts are able to digest this news. Also, this should catch the attention of major mining companies (if it hasn’t already), as Sunridge’s current market cap is less than a tenth of the NPV at ~$50 million. Here are the highlights from the news release:

   * Net Present Value (“NPV”) of $555 million at a 10% discount (pre-tax base case) (NPV @ 0% discount – $1,642 million)
   * Internal rate of return (IRR) – 27%
   * Payback – 3.5 years
   * Base Case metal prices used – US$3.28/lb copper, US
   .99/lb zinc, US$1,111/oz gold, US$21.00/oz silver
   * Initial capital cost estimate – $489 million including a contingency and owners costs
   * On site operating costs – $25.78 per tonne average through life of mine
   * Average annual metal production –
   o
   + 56.9 million pounds (25,900 tonnes) of copper
   + 136.0 million pounds (61,800 tonnes) of zinc
   + 26,000 ounce of gold
   + 695,000 ounces of silver
   * Total metal production –
   o
   + 804 million pounds (365,000 tonnes) of copper
   + 1.789 million pounds (812,000 tonnes) of zinc
   + 415,000 ounces of gold
   + 11 million ounces of silver
   * Life of Mine – 15.25 years

   Now this is 100% my “bias” opinion only but given what the Chinese have been doing in Eritrea and their large appetite for metals, it would come as no surprise that they enter some sort of arrangement with SGC in the coming months.

   I wouldn’t focus on the next 24 hours of trading but rather what this type of news can lead to in the next 24 weeks. At just $.40 a share (and $50 million market cap), SGC is indeed one of the most compelling speculative/gambling juniors in the market today!

   Comment by Bert — May 2, 2012 @ 5:36 am

2. 

   Rumour has it HDA’s employees are on a trading blackout right now. With yesterdays strong buying pressure and today looking like it might be similar, NR regarding mill permit might be imminent…

   Comment by db — May 2, 2012 @ 6:18 am

3. 

   also, for those who havent seen it yet. A look a the RBW promo video…

   Watch on Youtube… “Rainbow Resources May 2012 Corporate Video”

   Comment by db — May 2, 2012 @ 6:20 am

4. 

   Hi Jon,

   I have been looking at a cie name Lounor LO-TSX,

   They have issue a press release as follow;

   Lounor acquires the Matagami Gold property

   Listing (TSXV = LO)

   ROUYN-NORANDA, QC, March 22, 2012 /CNW Telbec/ – LOUNOR EXPLORATION INC. is pleased to announce the acquisition of a gold mining project located in the Matagami mining camp, Quebec. The Matagami mining camp has a long history of producing base and precious metals with at least 15 mines to date (former and current producers). Lounor has the option to acquire a 100% interest in 105 mining claims located in the Isle-Dieu Township, Province of Quebec, covering a total area of 1,632 hectares.

   Geological Features
   Lounor optioned the Matagami Gold property on the basis of a new geological interpretation. This new geological model has never been drill tested.

   Many veins were discovered on the property that are very close together. In 1982, a field geologist of Mining Corp. discovered and noted a number of smaller veins and stringers paralleling a larger vein being stripped and sampled by Mining Corp. The smaller veins and stringers were noted over several hundred feet on both side of the vein being sampled. It can be presume that it is also the case with other larger veins mapped at proximity (60 other veins). We are in the presence of a significant stockwork.

   Sampling by Northern Quebec Explorers Inc. across many other larger veins suggests that the wall rock is mineralized and returned significant values in gold. Little is known of the degree of mineralization in the wall rock or the host rock because of insufficient sampling.

   Dave Doan, a consultant geologist, visited the property 7 times in the 1970’s and 1980’s and concluded in 1983 that an area of mineralized veins of roughly 1000 feet wide and 3400 feet long might suggest the presence of a large low grade gold deposit.

   The geological feature is an intrusive porphyry sitting at proximity of the Matagami geological complex. Many major faults are present and cross the property. This type of archean porphyry system has similarities to the Malartic, Troilus, Fen Gibb, Cote Lake and Detour mineralized systems.

   Historical resources (non-compliant with NI 43-101) of 135,241 t grading 2.74 g/t Au were reported in the past as well as copper values in the volcanic rocks at proximity of the intrusion.

   MRB and Associates of Val-d’Or (Québec), a geological consultant firm, has been mandated to produce a comprehensive compilation on the property before the launching of a drill program

   I have bought some, what do you think?

   Thanks!

   Comment by Martin — May 2, 2012 @ 7:11 am

5. 

   Final struggle of GBB at 10-11 cents mark…. it can be kept at double digit mark and I have the impression that this stock may consolidate soon.

   Comment by Theodore — May 2, 2012 @ 12:46 pm

6. 

   Sunridge (SGC) had excellent news out today, but the market sold off for some reason,
   but this will change… SGC is one of my best 2 stocks, which i feel confident will
   eventually bring me a big payday.. I can’t say that i am disappointed with today’s
   action, because i am waiting this one out. The saying goes this way, when the going
   gets TOUGH, the TOUGH gets going & when others are selling, i am buying.

   Here’s an interesting article
   ————————————
   Ocean Equities expects re-rating in Sunridge Gold stock after pre-feasibility study
   1:19 pm by Deborah Sterescu

   Ocean Equities expects re-rating in Sunridge Gold stock after pre-feasibility study

   Ocean Equities published Wednesday a bullish note on Sunridge Gold (CVE:SGC) (OTCQX:SGCNF), after the junior explorer released a prefeasibility study for the Asmara North project in Eritrea, North Africa.

   The capital markets firm said the publication of the study is a “key milestone” for Sunridge, and that it expects a re-rating of the company’s share price in reaction to the news.

   “Sunridge Gold’s C$47m market capitalization belies the underlying value of the projects it owns,” the report said.

   “The headline $555m net present value of the North Asmara project equates to $4.72/share. While the $4.72/share level is not an accurate price target for the company’s share price (as it does not reflect financing costs and dilution) it does illustrate the complete disconnect between the share price and the underlying value of the company’s project.”

   Sunridge Gold’s shares are changing hands currently at around 39 cents. Ocean said that uplift in the share price will reduce the dilutive effect of a pre-production fund raising, or prevent Sunridge from being acquired at “too low a value.”

   The prefeasibility study concluded that at a 10% discount rate, the project is estimated to have a net present value of $555 million, for an initial capital cost of around $489 million, and has an internal rate of return of 27 percent.

   This is based on metal prices of $3.28/lb for copper, $0.99/lb zinc, $1,111/oz for gold and $21/oz for silver.

   Work has already begun on the recommended feasibility study for the Asmara North
   project, Ocean noted, with the project to potentially enter production in 2016.

   The gold explorer’s North Asmara project is made up of four deposits located around the capital of Eritrea, Asmara: the Emba Derho, Debarwa, Gupo and Adi Nefas deposits.

   During the 15.25 year life of the mine, it is expected to produce 804 million pounds of copper, 1,789 million pounds of zinc, 415,000 ounces of gold and 11 million ounces of silver.

   The company concluded that an integrated, three-phase mine operation is the “optimum economic situation”, using a centralized mill and plant, to be located close to Emba Derho.

   As part of the plan, Adi Nefas will be exploited using underground mining methods, while the other deposits will be mined as open pits.

   “We are particularly interested in the zinc component of the North Asmara project as we believe that this component of Sunridge’s project has been undervalued until this point,” Ocean noted.

   “In our view, zinc is one of the more interesting in the base metal complex looking into the mid-term. With a high grade, open pittable zinc ore at both its Adi Nefas and Debarwa deposits we think Sunridge should receive recognition as a zinc play as well as a copper-gold play.”

   With an anticipated zinc shortage in the mid-term due to a closure of big mines, and increasingly higher demand, many analysts are expecting a surge in price for the metal.

   Ocean continued: “Progress to the feasibility study level will truly illustrate the potential value of the North Asmara project and the company will be able to examine the different ways in which it can add value.

   “Sunridge has already outlined several ways in which it can improve the economics of the project including heap leaching the precious metal ores, increasing throughput and assessing the viability of different power sources.”

   The report noted that updates on these opportunities are expected in due course, as well as continued drilling results that have the potential to increase the project’s resource base.

   “Sunridge has been in discussions with several parties interested in taking a strategic stake in the company as North Asmara is likely to be one of the next mines to be brought online in Eritrea, a mining jurisdiction that continues to draw the attention of minor and major mining companies.

   “We think Sunridge presents a very good investment opportunity at this point before a significant uplift in the share price,” Ocean Equities concluded.

   When the mining license is granted, following completion of a feasibility study, Sunridge said the Government of Eritrea will have a 10 percent carried interest in the project and has the option to purchase up to a 30 percent working interest.

   The feasibility study is targeted for the first quarter of 2013.

   Comment by Bert — May 2, 2012 @ 1:14 pm

7. 

   RBW Video

   Just watched the RBW Video, very interesting. Was our JON the narrator ? if so, he is
   as good at being a narrator as he is a writer, good job ! My last buy at 0.175 is looking
   better every day.. R !

   Comment by Bert — May 2, 2012 @ 1:31 pm

8. 

   Yes, Bert, that was me. I haven’t narrated a video in many years actually but it was fun. As I mentioned last week, I met with David Johnston for breakfast when I was traveling thru Calgary last week and he asked me if I wouldn’t mind doing the voice-over on their video (the original guy they had apparently was not too good). Anyway, I told him I’d be honored to do it and it took only an hour of my time. They did a good job.

   Comment by Jon - BMR — May 2, 2012 @ 2:00 pm

9. 

   Jon

   The only thing is, i had visualized you as being 25 years of age, but after hearing
   your voice, i now feel you are 35. As for being tall/short, overweight/skinny, bald/
   need a trim, i need more time. R !

   Comment by Bert — May 2, 2012 @ 2:21 pm

10. 

    Theo, would please care to eloborate? Have you heard something in the pipeline?

    Comment by alec — May 2, 2012 @ 2:56 pm

11. 

    Bert
    Jon, 35 years old….flattery will get you nowhere.

    Comment by John - BMR — May 2, 2012 @ 3:03 pm

12. 

    You feel I am 35??? Wow….flattery will get you everywhere, Bert! Thank you, you’ve made my day…I can’t wait to tell my fiancee, who’s actually 10 years younger than me, that my BMR friend thinks my voice makes me sound even younger than her!

    Comment by Jon - BMR — May 2, 2012 @ 4:39 pm

13. 

    I may not have the logic to say there is a consolidation in GBB . When you see the share price to go down from the 90 cents to 11 cents. The total shares is now about 200 million. You probably feel that the company needs some radical changes in management. A 30-40 cents stock sounds reasonable for growth. If this really happens, 4 to 1 new stock, the total shares becomes 50 million and price at 40 cents per share. If the share continues to go down, the company needs to issue more shares each time and this further dilutes the company. This is only my personal view, nothing heard from the pipeline. I am not surprised to see this stock to go back to 6 cents… if no good direction for this company in 2-3 months time. A lot of people do not like to read my non-sense comments. This is only a platform to express own views. Of course BMR are experts and their analysis are more supportive … I like to read their comments and expert opinions/ views.

    Comment by Theodore — May 2, 2012 @ 8:06 pm

14. 

    hmm, we re all intitled to your opinions and feelings, i feel that they may have some interesting drill results coming up, and perhaps if they are good the stock will rebound to the 20-30cent range, but i could be wrong and it could just stay where it is or go down. lots of stocks out in the venture have been beaten down not just GBB. many are predicting a turn int he venture coming soon, perhaps may/june, if this happens many will jump back into the penny and stocks and push them all up, especially ones with value, drill results, 43-101 etc. GBB will no doubt benefit from that as well as others that BMR talks about. If the market does not turn or improve, then it will be a very tough ride for all markets and investors.
    just my humble opinion.
    Lets wait and see whos right.

    Comment by alec — May 2, 2012 @ 9:51 pm

15. 

    Rainbow Expands Big Strike Land Package 4.4% Copper Showing at Referendum
    (via Thenewswire.ca)
    TORONTO, ONTARIO, May 3, 2012– Rainbow Resources Inc. (TSX VENTURE: RBW) (“Rainbow” or the “Company”) is pleased to provide an update on its Big Strike Project in southeast British Columbia where the Company has staked new prospective ground near Nelson to expand its total land package by nearly 50% to 12,700 hectares. Rainbow is a gold and silver exploration leader in the mineral-rich West Kootenay district and is preparing to launch its 2012 drill program in addition to carrying out aggressive prospecting aimed at identifying new discoveries throughout the Big Strike Project.
    Rainbow Stakes Large Area Between Former Mine And Rhea
    Based on favourable results from initial field work at Rhea, as reported by the Company March 23, 2012, combined with encouraging new information obtained by its prospecting team, Rainbow has staked almost the entire area between the Rhea Property and the former producing Second Relief Mine immediately to the south. This 8-kilometre-long, 5-kilometre wide section is hosted by Nelson intrusives while the structurally important Red Mountain Fault cuts across the newly-staked area from north to south. The Second Relief Mine, in the same Archibald formation as Rhea, was the third-largest gold-enriched skarn producer in British Columbia history (over 100,000 ounces of gold were produced).
    International, Gold Viking Properties Drill-Ready
    Rainbow’s 2012 Big Strike drill program will start at the International and Gold Viking properties immediately upon receipt of permits and as soon as ground conditions allow.
    Gold Viking, adjacent to the village of Slocan 70 kilometres north of Nelson, is a south-facing property where ground conditions are now improving rapidly. Initial drilling will test a geological contact for silver and gold mineralization over a nearly 500-metre distance trending in a north to northwesterly direction. Strong airborne conductors coincident with geochemical anomalies helped define numerous high-priority drill targets over this central area of the property.
    Snow melt is typically slower at the flagship and higher elevation International Silver Property, approximately 70 kilometres to the north of Slocan. Drilling will explore a potentially rich vein system dominated by quartz with irregular massive sulphide bodies of galena, pyrite and sphalerite that could extend near-surface for several kilometres.
    The Ottawa Property, immediately adjacent to Gold Viking and a former significant silver producer in the 1900’s, is another high priority target for Rainbow in 2012. The Ottawa claims, and an area 350 metres east of these claims, produced a total of 1.8 million ounces of silver in the 1900’s at an average grade of 2,118 g/t Ag or 61.6 oz/ton.
    The International, Gold Viking and Ottawa properties have never been previously drilled.
    Two Major Areas Of Interest Outlined At Referendum Including 4.4% Historical Cu Showing
    Rainbow’s 2012 Big Strike prospecting program will begin at the Company’s recently-optioned Referendum Property where two major areas of interest have been identified based on a review of previous limited exploration work and artisanal mining records.
    On the eastern side of the property, Rainbow will be investigating a quartz-tourmaline stockwork system with open-pit potential. Historically, small-scale gold production from at and near-surface has occurred within an alteration zone measuring approximately 700 metres by 150 metres with ore processed at the Trail Smelter. This zone has never been drill-tested and is open in all directions.
    The western portion of the Referendum, meanwhile, has not been systematically explored for the potential of hosting a copper-gold porphyry deposit. Elevated copper in soil geochemistry and the presence of feldspar porphyry, chloritic shears and malachite staining were reported over a 2 km strike length in 2005. A 3-metre long chip sample, across the apparent width of one of the malachite stained outcrops, returned an assay value of 4.44% Cu and 13 g/t Ag. Only three holes totalling just 300 metres have ever been drilled on this western portion of the Referendum Property (by Acrex Ventures Ltd. following the surface discovery in 2005). Several sections of mineralization were intersected by Acrex with values up to 0.25% Cu and 0.86 g/t Au before the company turned its attention to other properties.
    Fugro Airborne Survey Data
    Moose Mountain Technical Services, Rainbow’s resource consultants, have just received final heliborne electromagnetic survey data on most of the Big Strike properties and will be reviewing this information in the coming days.
    Jewel Ridge Update
    Moose Mountain Technical Services and Rainbow have completed a site visit and initial field work at the company’s recently-optioned Jewel Ridge Property along the prolific Battle Mountain-Eureka Trend in Nevada. The Company is eagerly anticipating a report on Jewel Ridge, including assay results from last month’s sampling program, within the next 7 to 14 days as plans for Phase 1 drilling continue. Jewel Ridge is along strike and contiguous to Barrick’s Ruby Hill Mine to the north and the advanced-stage Lookout Mountain Project to the south.
    Rainbow Corporate Video
    The Company is pleased to announce that a corporate video on Rainbow Resources (“People-Driven. Discovery-Focused. Follow The Rainbow”) is now available for viewing at the Company’s web site, RainbowResourcesInc.com, or by clicking on the following link:
    rainbowresourcesinc.com/RBWCorporateVideoMay2012.php

    Comment by Andrew — May 3, 2012 @ 4:16 am

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