1. Volume 12, #4 March 2009-1
...Discovering value in natural resource stocks
Investing in an Uncertain World
(A presentation delivered March 1, 2009 at the Prospectors and
Developers Association of Canada annual conference in Toronto)
T he world has just experienced the Of course, there is no assurance that this is was particularly scary, because banks,
greatest destruction of wealth ever. the bottom of the market. However, it is which are supposed to be solid and
Share prices around the world are clear that there is a great deal less risk reliable, were the most vulnerable, at least
down 50% or more. General Motors, long today than there was a year ago. in the U.S. and Europe.
the backbone of American industry, has
lost 90% of its value from a year ago. In the face of the present uncertainty, I am Investors saw gold once again hold its
Some of the big American banks are gone going to outline 3 investment ideas that I value in a time of crisis. As a result, there
completely, with shareholders losing believe will do well, regardless of the has been a huge inflow of wealth into the
everything. direction of the broad markets. gold market. There has been such strong
demand for gold coins and bars, that there
Is the worst over? I don’t know. First, let’s look at gold. is a shortage of physical product.
The U.S. government is throwing a trillion Many investors over the past few months Exchange traded funds and similar invest-
dollars, and counting, at bailouts and eco- have taken refuge from the financial crisis ment vehicles have become extremely
nomic stimulus. That huge handout seems in the safe haven of gold. popular. Gold ETFs now hold 45 million
to have stabilized the situation in the U.S. ounces of gold, an all time record. Gold
But, Europe is also facing some serious Sure, gold took a hit at the height of the has become the quot;most favored assetquot; of
problems. crisis. But, it was nowhere near as bad as investment advisers.
nearly every other investment. Gold
Some people see more downside before a recovered quickly. Gold equities were also For the first time in nearly 3 decades, the
recovery. Others see this as the bottom. hit hard by the financial crisis. The share investing public is looking favorably on
It’s hard to know what to expect; and prices of the larger companies have also gold as an investment. And yet, gold stub-
therefore it’s hard to know what to do as recovered strongly. bornly refuses to break through $1,000 and
an investor. overtake the record price set a year ago.
The meltdown in the financial markets
After an experience like last year, and with scared the hell out of people. This crisis Some people are puzzled as to why this
so much uncertainty remaining, many intense level of gold buying by investors
INSIDE
people will be tempted to give up on has not resulted in larger gains in the gold
investing. Or worse yet, they will wait price. The reason is that investor demand
on the sidelines until the popular media is only part of the picture for the gold
tells them how great things are in the market. Let’s have a quick look at some of
1– Company Updates
investing world. Normally, the popular the other factors influencing gold.
3– Brief Updates
press being positive on any investment
topic signals the top of the market. Gold is unique in that nearly all the gold
6– Initiating Coverage ever mined is still available to the market.
But, the top of the market is precisely The European Central Banks are among
7-Most Favoured Companies
when many people come back into the the largest holders of gold. Their sales
markets. It takes a great deal of courage over the past decade have been a major
8– Conferences
to invest contrary to popular wisdom. factor in the gold market.
————————————
But, that is exactly how you make money
The last Issue was
in the investing world. You buy when The European banks have agreed not to
February 2009-1
others are afraid, and you sell when sell more than 500 tonnes (or, about 16
others are greedy. million ounces) of gold a year.
March 6, 2009 1 www.ResourceOpportunities.com
2. Resource Opportunities
Jewelry makers do the opposite. tion is falling. Equally importantly, the
Gold Supply & Demand Estimates
overall reserves in the gold industry are
Year from Oct 2007 – Sept 2008
The big swing variable, and therefore the declining.
most important determinant in the short-
term price, is investment demand. When The larger gold companies have grown
investor buying overwhelms the slow- through mergers, but those mergers have
down in other sectors, the price rises. been dilutive: the amount of gold
Economists will tell you that when the reserves per share has declined substan-
price of a commodity increases, demand tially over the past few years.
falls and production increases. Economic
theory doesn’t necessarily apply in the Most of the gold production is now com-
mining world. The gold price has more ing from mines that are more than 15
than tripled in the past 8 years, yet years old. The pace of mine closures will
demand continues to rise. accelerate, putting further downward
pressure on the level of gold production.
On the other hand, the supply of gold, In spite of a five-fold increase in spend-
also contrary to economic theory, is ing on exploration by gold companies,
falling as the price rises. the industry cannot find enough new
deposits to even replace the gold being
Gold mine production has been falling mined each year.
for several years now, even though min-
ing companies are producing all the gold Geologists have spent decades scouring
they can to sell into a strong market and the earth. The big, high grade gold de-
a rising price. Economic theory simply posits that are sticking out of the ground
does not stand up to geologic reality. It is have been found, developed, and are
not easy to increase gold production. It’s largely mined out. New discoveries will
For the past three years, they have sold hard to see on the slide below, but gold be smaller, lower grade, more remote and
less than the quota. However, that might production peaked in 2002, and is pro- deeper.
change with the banking crisis. jected to continue to fall.
The chart of gold grades over the past
Another large holder of gold, the Interna- For years, the large gold companies have several years also presents an interesting
tional Monetary Fund, or IMF, has been grown through acquisitions. While Bar- picture. You can see the grade for the
talking about selling some or all of its rick and Newmont, for example, are each gold industry has fallen sharply over the
gold for years, and again, the financial bigger than they were a few years ago, past few years.
crisis may result in more of their gold on the industry is shrinking. Gold produc-
the market. Other Central Banks are buy-
ing, offsetting part of the European sell-
ing.
The Asian nations hold a very small por-
tion of their reserves in gold. China, with
$2 trillion, the largest foreign currency
reserves of any nation, holds less than
1% in gold. There is speculation that
China and other nations might increase
their gold holdings.
Physical demand for gold is dominated
by the jewelry market. Jewelry demand
in the developed world has fallen sharply
with the recession, offsetting growth in
jewelry demand in the emerging econo-
mies.
A very important factor in gold is the see
-saw between investor demand and jew-
elry demand. Investors tend to buy as the
price rises and sell as the price falls.
March 6, 2009 2 www.ResourceOpportunities.com
3. Resource Opportunities
The average gold grade of producing
Global Gold Exploration Expenditures
mines is now less than 1.3 grams per
tonne. When I started my career in the
mining industry, what is now the average
grade for the industry would have been
generally considered a geochemical
anomaly, not a mine.
With 8 years of rising gold prices,
production continues to fall.
What does all this mean to an investor?
Well, there are many reasons to believe
the gold price will go higher, perhaps a lot
higher. But, not necessarily right away. In
fact, gold has a nasty habit of dropping
back after it makes a big move. But,
regardless of what happens to the gold
price in the near term, the gold mining
Junior vs. Senior Gold Stocks industry desperately needs new deposits.
Shareholders of companies that find new
deposits will be richly rewarded. And,
since it is getting harder to find new
deposits, companies that have gold depos-
its hold extremely valuable assets. The
value of many deposits is not being recog-
nized now, but over time, investors and
the
major producers will attribute higher
values to the gold deposits now in the
hands of the juniors.
On top of that, the juniors are adding
value by expanding and upgrading their
deposits.
This slide shows the relative value of
junior gold companies versus the larger
companies. For several years, the smaller
companies outperformed the majors. But,
Global Average Mine Grades late last year, the juniors were clobbered
much worse than the larger companies.
The majors and the mid-tier companies
have rebounded, and some of the more
established development companies have
recovered some of the losses. The smaller
companies are only beginning to recover.
So, investment idea #1: emerging gold
producers and companies with
advanced stage deposits
Many gold companies have seen big price
gains, but there are some companies that
have not yet been discovered by investors.
Just remember: Not all small gold
companies are created equal. Be selective.
March 6, 2009 3 www.ResourceOpportunities.com
4. Resource Opportunities
are at least a couple of years ahead. sources contain an additional 106 million
By investing in advanced exploration and There will be literally hundreds of small ounces of silver, 356,000 ounces of gold,
development companies, you gain companies that arise in the green energy 301 million pounds of lead and 498 mil-
exposure to the gold market, and therefore business. It will be like the mining sector, lion pounds of zinc.
benefit from gains in gold. At the same where a huge amount of innovation and Juanacipio is one of the largest and richest
time, you own companies that are development is being done by small silver deposits in the world. It’s not sur-
growing and are adding value public companies. We have some prising that the partner would want the
independent of moves in the gold price. information on our website that provides whole thing.
an introduction to that sector.
Now, very briefly, let’s touch on The takeover offer was announced on
Investment idea # 2. Base metals are December 1, at a low point in the market.
So, Investment idea # 3: Start getting
totally out of favor right now. The same Even then, the offer was below the cur-
familiar with Green Technology,
goes for uranium. It seems that few rent trading price and only one third of
especially related to energy.
people in North America want anything to the high that the shares reached in the
do with base metal companies or uranium previous year. Mag shares have since
companies. It’s as if investors think we traded consistently above the offer price,
Company Updates
have stopped using metals and will never leading pundits to describe the offer as a
need any new metal mines. People who “take-under” offer.
MAG Silver
take a longer term view can find
(MAG-TSX)
exceptional values. Canadian take-over procedures require
that Mag present shareholders with an
Mag is conducting an aggressive explora- independent valuation. The junior claims
A little side comment: If you look at the
tion program on several of its silver pro-
top 100 mining companies in the world, that its partner has refused to provide all
jects as it continues to resist the opportun- of the required information. As that drama
18 of those companies are Chinese,
istic takeover offer made by its joint ven- unfolds, Mag has 12 drill rigs operating
including the number 3 company on the
ture partner. The company is intent on
list. The Chinese take a longer term on its various properties, striving to iden-
demonstrating that it merits a higher
perspective than Westerners. They are tify enough ounces to justify a higher
valuation than the US$4.54 per share of-
going around the world now quietly price. The company has announced a $17
buying up base metals. Already this year, fer from Fresnillo plc. million program, involving 28,000 meters
they have invested $25 billion in energy of drilling at the Juanacipio project and
That London-listed Mexican miner earned 30,000 meters at its wholly owned pro-
and base metals and they are advancing
a 56% interest on Mag’s Juanacipio silver jects.
on two other very large deals. Many
deposit and also holds 20% of Mag’s
European investors are also taking a
shares. The major’s Fresnillo mine on the Mag had over $50 million of cash at the
longer term perspective and quietly
adjacent property ranks as the largest sil- start of its spending spree. That treasury
buying base metal companies.
ver mine in the world, with annual pro- provides lots of power for the highly suc-
Exploration companies with billion dollar duction of 31 million ounces annually. cessful exploration team that made the
ore bodies are now trading for a few discovery at Juanacipio.
pennies a share. Their shares may not pop The Juanacipio deposit is clearly an ex-
tension of the rich silver system that sup- With a steady flow of good exploration
next week or next month, but in due
ports the adjacent mine. Mag commis-
course, many of those companies will results, and a market price well above the
have values several times higher than the sioned an independent study that showed offer price, the Mexican company has so
somewhat higher resources than the fig-
current share prices. far not blinked.
ures published by Fresnillo. The Mag
Investment idea # 2: Selected base metal figures (which had to be revised due to an The best prospect for near term value
error by the independent engineers) shows creation seems to be the 100%-owned
and uranium companies that have
an indicated resource of 2.95 million ton- Cinco de Mayo property in northern Chi-
established resources.
nes of 879 grams per tonne silver, 2.22 huahua State. Hole # 84 cut a 2.72-meter
Now, investment idea # 3: This is really a grams per tonne gold, 2.39 per cent lead zone grading 462 grams per tonne (13.5
topic for a whole investment conference. I and 4.15 percent zinc. An additional in- ounces per ton) silver, 10% lead and
just want to plant a seed in your minds at ferred resource has 7.21 million tonnes of 13.6% zinc in a zone called the Jose
458 grams per tonne silver, 1.54 grams
this time. manto. Results demonstrate that the Jose
per tonne gold, 1.89 percent lead and 3.14 manto is part of a large carbonate replace-
percent zinc. The total contained metals in ment deposit system. Drilling is continu-
Over the next decade, the movement
the indicated resource are 83 million
away from carbon fuels, that is: oil, ing with three drills.
natural gas and coal, is going to gain huge ounces of silver, 210,000 ounces of gold
and 155 million pounds of lead and 269
momentum. Look at the initiatives that With Fresnillo holding 56% of the pri-
million pounds of zinc. The inferred re-
Obama has put forward. In Europe, they mary asset (and operating the adjacent
March 6, 2009 4 www.ResourceOpportunities.com
5. Resource Opportunities
mine), a competing bid has not come Aurcana Corporation (AUN.V; Last updated February 2009-1
forward. The share price has declined C$0.105) has nearly completed a prelimi-
from the recent high as time ticks by with nary economic assessment on its Shafter Freewest Resources (FWR-TSXV;
neither another offer nor a higher bid. It silver mine, located in southwest Texas. C$0.26) has made another new chromite
is up to each shareholder to tender to the That study will be followed by a prefeasi- discovery on its wholly-owned McFaulds
offer or simply hold their shares. bility study due in the summer. The pro- property in northern Ontario: 4 holes
ject has a measured and indicated re- drilled below the Black Thor chromite
Perhaps shareholders might expect the source of 24.6 million ounces of silver discovery encountered a new zone, with
parties to work out a split of the com- and an inferred resource of 22.8 million assays up to 37 meters of 32% chromite.
pany, letting Fresnillo get what it wants ounces silver. Plans call for silver pro- The new zone, called the Black Label
(Juanacipio), and leaving the other assets duction at a rate of 3.2 million ounces per zone, is thought to be associated with
under the control of a team that could add year. The mine has extensive under- platinum, palladium and nickel minerali-
more value for shareholders. ground development in place, allowing zation. The discovery will be followed up
the project to move quickly to produc- by further drilling.
Price March 6, 2009: C$0.41 tion. The studies at Shafter will be used
Shares Outstanding: 49 million to help the company find financing to Recent drilling at the Black Thor deposit
Shares Fully Diluted: 52 million has returned assays up to 30 meters of
develop the mine.
Market Cap: C$ 20 million 40.3% chromite. Black Thor and Black
The La Negra silver-lead-zinc-copper
Contact: Investor Relations Label are located 4 kilometers northeast
mine in Mexico continues to operate at
604-630-1399 of the Big Daddy chromite deposit, an-
1,000 tonnes per day, but the low metal other high grade deposit recently identi-
www.magsilver.com
prices have squeezed profits. The fied by Freewest and its partners. Spider
Last updated December 2008-1
Rosario mine was put on hold as metal Resources (SPQ-TSXV) and KWG Re-
prices plummeted and the company chose sources (KWG-TSXV) have each earned
Brief Updates to focus on development of the Texas a 25% interest in the Big Daddy project.
mine.
Altius Minerals (ALS-TSX; C$6.26) Freewest now has three chromite deposits
reported earnings from its third quarter Shafter is an attractive silver mine devel- on which drilling continues to push out
ended January 31, 2009 at $31.6 million opment project. If the company can se- the limits. The company has various
or $1.11 per share. These earnings came cure financing on favorable terms, there other projects, with joint venture partners
from the forward equity settlement of 2.5 is considerable upside potential in the funding several of them. The most sig-
million shares of Aurora Energy for earn- share price from the current level. nificant is the Clarence Stream gold de-
ings of $38 million less $6.7 million in Last updated December 2008-2 posit in New Brunswick on which an
tax. Altius reported $689,000 in earnings updated resource estimate is expected
from its 0.3% net smelter royalty interest Exeter Resource Corp (XRC-TSXV; soon.
from the Voiseys' Bay nickel-copper- C$2.72) encountered another very long
cobalt mine in Labrador, down from drill hole intercept from the ongoing pro- Freewest is so far getting little credit for
$1.38 million in the same quarter of last gram at its Caspiche gold-copper por- the very significant discoveries in north-
year due to depressed metal prices. The phyry project in Chile: The hole cut an ern Ontario. Those deposits, along with
company also reported interest income of impressive 1,214 meters of 0.9 grams per discoveries in the area by other compa-
$1.38 million compared to $2.3 million in tonne gold and 0.33% copper. This hole nies, are now capable of supporting infra-
the same quarter last year as a result of supports the notion that mineralization structure development. The provincial
lower interest rates. extends well beyond the limits of the government is looking closely at road
previous drilling on the project. access and at least a couple of major met-
Altius has fourteen mineral properties, als companies are already evaluating the
several with joint venture partners, and Exeter is well on its way to outline a very suite of deposits now being outlined by
holds various investments in junior ex- substantial deposit in Chile by this Sep- Freewest and the other companies in the
ploration and development compa- tember. They also expect a resource esti- area.
nies. The company has $160 million in mate on the Cerro Moro project in Ar- Last updated January 2009-1
cash and liquid investments and is look- gentina by this summer.
ing to take advantage of opportunities in Full Metal Minerals (FMM-TSXV;
the present market situation. There are With nearly $40 million in cash, Exeter is C$0.175) announced a new discovery of
good prospects that the skilled manage- well positioned to continue its two ag- high grade zinc-lead-silver mineraliza-
ment team will make a deal in the next gressive drill campaigns. The resource tion. The discovery resulted from drilling
few months that will add value for share- estimates expected over the coming 8 holes last year at its OG project, 40
holders. In the meantime, the company months should help investors to better kilometers north of Dawson city in the
trades at roughly cash value. valuate the exceptional exploration suc- Yukon. Highlights include 11.9 meters at
Last updated January 2009-2 cess experienced by the company. an average grade of 14% zinc, 5.7% lead
March 6, 2009 5 www.ResourceOpportunities.com
6. Resource Opportunities
and 26 grams per tonne silver. The drill gold in 2009, and expected to grow to Initiating Coverage
program was designed to test a 1.7 square over 400,000 ounces in 2012. Minable
kilometer soil anomaly and geophysical reserves will total 7.6 million gold ounces Inter-Citic Minerals
gravity high. The new area of mineraliza- within a measured and indicated resource (ICI-TSX)
tion, called the Sundar zone, consists of of 12.2 million gold ounces. Randall Ol-
massive to semi-massive sphalerite, ga- iphant, former president of Barrick and Inter-Citic Minerals is a gold exploration
lena, pyrite and chalcopyrite and is open now chairman of Western Goldfields, will and development company with a multi-
for expansion in all directions. be executive chairman. Cash flow from million ounce gold deposit in China. Re-
the three mines is expected to fully fund sults of drilling over the past year are now
Full Metal has a large portfolio of proper- development at the New Afton gold- being worked into an updated resource
ties in Alaska and the Yukon Territory copper project in British Columbia and estimate. Those resource figures will then
with joint venture partners funding seven also put the company in a strong position be carried forward into a preliminary eco-
projects. This is the third silver-base to undertake further acquisitions. nomic assessment over the coming weeks.
metal discovery the company has made The strong likelihood of favorable results
over the last year, yet investors are giving The company would have $171 million in from those two studies provides a basis
the company little value beyond the near- cash, $77 million in long-term asset for substantial gains in the value of the
term production potential of its Lucky backed commercial paper and $275 mil- company over the coming weeks.
Shot Gold project. lion of debt. Once the transaction is com-
Last updated February 2009-1 pleted, New Gold will have 348 million Rapidly expanding gold production in
shares outstanding and 436 million shares China has made that country the world’s
Hathor Exploration (HAT- fully diluted. The transaction will create a largest gold producer. Last year, Chinese
TSXV;C$2.12) reported assays from in- bigger and stronger mid-tier presence that production exceeded the U.S. and the
fill and step-out drilling at its Midwest will be in a position to grow and make long time leader, South Africa. Investors
Northeast uranium deposit in the Atha- further acquisitions. have not kept up to the rapid emergence
basca Basin. The drilling, which began in Last updated January 2009-1 of the gold industry in that country. Inter-
January included 16 holes, of which 10 Citic is well positioned to benefit from a
holes were designed for infill purposes Virginia Mines (VGQ-TSX; C$3.88) growing awareness of the importance of
and 6 holes tested mineralization at dis- announced that Goldcorp updated the China in the gold industry as well as from
tances 40 to 550 meters from the Rough- resource estimate at the Eleanore gold the pending developments on its project.
rider zone. None of the step-out holes hit, project to 2.3 million ounces of gold at
while nine of the ten infill holes hit ura- 10.05 grams per tonne in the measured Inter-Citic president, James Moore, has
nium. The standout was 15 meters of 12% and indicated categories and 3 millionworked with the Chinese resource indus-
U3O8, but the other values were lower ounces at 12.75 grams per tonne in thetry for over a decade. His strong ties
grade or narrow. Investors were clearly inferred category. The increased resource
within the industry led to the acquisition
expecting more consistency, as the share is important to Virginia, which retains a
of the project. Much of the initial funding
price took a big hit. The company still has royalty interest on the deposit that it dis-
for the company came from investors in
a significant uranium discovery, within covered and sold to Goldcorp. At the cur-
Hong Kong with whom Mr. Moore had
easy trucking distance of mills operated rent gold price, the royalty would be 3%
contacts. Vice President of Exploration,
by the three largest uranium producers. of revenue. Advance royalty payments in
Garth Pierce, has over 30 years experi-
The dip in the price represents a buying the amount of $100,000 per month are ence working in exploration and project
opportunity. due to begin flowing to Virginia next management, including a highly success-
Last updated January 2009-2 month. ful career with one of the majors. The
directors and advisory team bring a
Virginia is conducting an aggressive $7 wealth of experience and contacts.
New Gold Inc (NGD-TSX; C$2.20) and million exploration program on its Que- Included is a former Prime Minister of
Western Goldfields Inc. have agreed that bec properties this year, with much of that Canada, John Turner.
New Gold will acquire all of the shares of being reimbursed by joint venture part-
Western Goldfields on the basis of one ners and provincial government grants. In 2003, Inter-Citic entered into a joint
New Gold common share and 0.01 cent in venture with the Qinghai Geological Sur-
cash for each common share of Western Virginia has $38 million in cash, which vey to acquire the Dachang gold project,
Goldfields. Existing New Gold and West- together with the value of the royalty in- which covers 279 square kilometers. The
ern Goldfields shareholders will own 58% terest exceeds the current market value of local government agency recognized the
and 42% respectively, of the combined the company, giving no credit to the significance of the gold occurrence, but
company. The combined company will highly successful exploration team and lacked funding to carry out the work. In-
have gold production from three gold the several discoveries already in hand. ter-Citic has now earned an 83% interest
mines in mining-friendly jurisdictions, Last updated January 2009-2 in the property and has the option to in-
forecast to produce 335,000 ounces of crease its interest to 90% by completing a
March 6, 2009 6 www.ResourceOpportunities.com
7. Resource Opportunities
pre-feasibility study. The agreement also producing nation and in general as a fa- Most Favored Companies:
gives Inter-Citic the right of first refusal vorable place to do business.
on properties around the Dachang prop- Capstone Mining (CS-TSX;C$1.25)
erty. Inter-Citic intends to develop the Dachang
main zone and to continue to evaluate a CGA Mining (CGA-TSX;C$1.59)
The Dachang gold project is located in number of other promising gold occur-
Qinghai province in western China, 170 rences on its extensive property. Dachang Endeavour Financial (EDV-
kilometers southeast of the city of Gol- is a large and well-located deposit that TSX;C$1.55)
mud where major infrastructure is avail- will be of interest to any number of gold
able. The structurally controlled sulfide producers.
Exeter Resource (XRC-
deposit occurs near surface in a sediment
TSXV;C$2.72)
host rock. Geologists were led to the area Inter-Citic has $11 million in cash (as of
(see brief update)
by gold placer workings. late last year) more than enough to carry it
through the next phase of work on the
Freewest Resources (FWR-
After identifying numerous gold occur- project.
TSXV;C$0.29)
rences, Inter-Citic in 2007 focused on
(see brief update)
what is now referred to as the Dachang Adjusting for its cash and using last year’s
main zone. That year, 28,000 meters of resource estimate, the company is pres-
Great Basin Gold (GBG-
drilling helped to outline an inferred re- ently being valued at only $8.50 per
TSX;C$1.29)
source of 25 million tonnes grading 3.6 ounce gold in the ground. The share
grams per tonne, for a total of 2.9 million value should be adjusted upwards as the
ounces of gold. The majority of those deposit is both upgraded and expanded in
Keegan Resources (KGN-
ounces are within the Dachang main zone, the coming weeks.
TSXV;C$2.59)
where drilling has so far been done to
depths of only 150 meters. Price March 6, 2009: C$0.39
Mag Silver (MAG-TSX;C$5.45)
Shares Outstanding: 82 million
(see update)
In 2008, 50,000 meters of drilling was Shares Fully Diluted: 86.6 million
completed along with IP geophysical Market Cap: C$ 31.9 million
Silvercorp Metals (SVM-
work, metallurgy and preliminary engi- Contact: Investor Relations
TSX;C$2.79)
neering. Of 317 holes drilled, 299 holes (905) 479-5072
returned significant gold values. The www.inter-citic.com
Virginia Mines (VGQ-
results are now being compiled into an
TSXV;C$3.88)
updated resource estimate that is expected
(see brief update)
in the next month. Results of the 2008
drilling make it clear that the deposit will
New to the list:
be significantly larger than the 2.9 million
ounces previously outlined. In addition, a
substantial portion of the resource will be Inter-Citic (ICI-TSX;$0.39)
upgraded from inferred to an indicated (see Initiating Coverage)
resource.
Those updated resource figures will then
be incorporated into a preliminary eco-
nomic assessment over the coming weeks.
The deposit has favorable grades in a near
surface deposit. In a setting that is suppor-
tive of low capital and operating costs, it
is almost certain that the assessment will
be very positive.
Over the coming weeks, the Inter-Citic
share price should respond first to the
updated resource estimate, outlining a
deposit that is both larger and better de-
fined than the previous figures. Secondly,
the economic assessment will provide
confidence to investors that the deposit is
viable. In addition, China will gain inves-
tor recognition as the most important gold
March 6, 2009 7 www.ResourceOpportunities.com
8. Resource Opportunities
Conferences Metal Prices - March 6, 2009
Mines & Money Gulf 2009
Tuesday March 31, 2009
The next conference where I will be Park Hyatt Hotel Dubai
Gold 936.70 $/ounce
participating as a speaker will be in “The conference will tackle high
Zurich. I encourage you to attend, as it level topics including effective capi- Silver 13.29 $/ounce
provides an excellent opportunity to tal raising strategies in the region, Platinum 1067 $/ounce
meet face to face with company perspectives from sovereign funds,
management. Palladium 203 $/ounce
fund managers and high net worth
individuals in the region, up to date Rhodium 1050 $/ounce
insight in the trading markets in the
Copper 1.65 $/pound
Gulf for commodities.”
Intelligent Resource Investing www.minesandmoney.com Nickel 4.37 $/pound
Gold & Silver, Base Metals, Oil &
Aluminum 0.57 $/pound
Gas, Renewable Energy, Uranium Calgary Resource & Clean Energy
Zurich March 17, Geneva March 19 Investment Conference Zinc 0.54 $/pound
“An exclusive event with quality insti- Calgary Convention & Exhibition Lead 0.53 $/pound
tutional and private investors, world Centre April 4-5, 2009
Uranium 43.75 $/pound
class experts and a select group of “Featuring a world class line-up of
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