Mining’s old guard needs strong medicine
A new report details subpar investor returns in the mining industry over the last decade, particularly big cap diversified companies which have not adapted to new realities.
Medley Global Advisors said October 19th that the US Federal Reserve will create $500 billion over the next 6 months.
“Whenever you print money, people look for a refuge – gold.” Jim Rogers, author and famed money manager
Using history as our guide we know that the greatest leverage to rising precious metal prices, the most profitable rewarding way to get involved in precious metals, is to own the shares of junior precious metal companies. And in this authors opinion the best time to get involved with a junior resource company is when it’s in the post discovery resource definition stage.
My favorite stage junior is a junior in the post discovery resource definition stage (also known as brown field stage companies). These companies have all ready found something, money’s being raised and the company is going to go in to see what they have – and hopefully produce a 43-101 compliant resource estimate and build upon it. The risk has been greatly reduced and the waiting time for a discovery non-existent.
Altair Ventures Inc. TSX.V – AVX is what this author would consider a classic post discovery resource definition stock. AVX has a new gold discovery, the company is in the process of raising money, and they are working on their property getting ready for the next drill program.
AVX has:
Altair is developing a new gold deposit on its Prospect Valley Project (108 square kilometers) in a world class mining district near Merritt, British Columbia, Canada.
This mining district, which includes Teck’s Highland Valley Mine (copper/moly) and the Craigmont Mine (copper) has never been explored for low grade, high tonnage gold deposits. These types of targets – geological models – were not recognized in BC until recently.
With the recent success at the following two projects:
Spanish Mountain:
Blackwater:
Exploration companies, and investors, are starting to realize the potential for discoveries and increased share price valuations as these deposits are found, explored and developed.
Prospect Valley Project
The 107.9 sq km, Prospect Valley Property is 3 hours driving time from Vancouver BC and is within the Spences Bridge Gold Belt just a short distance from the town of Merritt. Prospect Valley hosts a low sulphidation epithermal gold system with quartz vein stockwork type mineralization. Over 13 target areas have been identified in the claim block to date. The majority of the targets are located in the centre of the claim block along a prominent north-northeast trending linear zone.
Initial work on the property started in 2005 – mapping, soil sampling, trenching and Induced Polarization (IP). The initial target was high grade gold mineralization, but after 3,734 meters of drilling – 90 percent of holes drilled were mineralized – and analyzing the results the model was changed to a bulk tonnage low grade gold target with average grades of .8 grams per tonne (gpt) to 1 gpt.
“Detailed geological mapping, surface trenching, soil sampling and airborne
magnetic surveys have been completed, and 33 diamond drill holes in 2006/2007 confirmed an elongated NNE-trending gold mineralized belt, designated the North and South Discovery Zones. The mineralized belt is silicified with stringers and veinlets of quartz and fine grained disseminated pyrite. Geological data shows that the mineralization is confined within the hanging wall of a normal fault zone that trends NNE for several kilometers.” Altair News Release July 21st 2009
Recent field work extended the strike length of gold mineralization to roughly three kilometers. A prospecting team working northeast of the North and South Discovery zones discovered gold mineralization. This newly discovered zone lies within the Northeast Extension, extends for 135 meters along strike, is exposed over a width of up to 32 meters and disappears under overburden in all directions.
This newly discovered gold mineralization is approximately 300 meters topographically lower than the South Discovery Zone (SDZ) and may represent a deeper part of the mineralizing system. Altair’s 2010 drilling program seems to indicate that gold grades increase with depth.
The location and intense alteration in the Northeast Extension correlates with a moderately dipping slope that might be related to the structure that appears to control the gold mineralization in the SDZ. This structure continues to the northeast for at least another two kilometers perhaps adding another two kilometers to the already three kilometer long trend.
“This is a really exciting development for the Prospect Valley Property. The extension of the gold-bearing structure to at least three kilometers along strike indicates that a very large mineralizing system was in place and that there is excellent potential for the discovery of a new gold deposit here.” Robert Archer, Altair’s Chairman
Gold Recovery
Thirty gold-mineralized samples consisting of core reject materials were sent for cyanide leach tests. Results show that of the 30 mineralized samples 17 samples returned gold recoveries above 72%. The positive gold recoveries from these tests are significant – gold recoveries are within industry requirements for this type of mineralization.
The Deal
Altair can earn a 70 percent interest in Prospect Valley by spending $6,000,000.00 and giving the vendor 7 million shares over five years. Roughly $600,00.00 has been spent by Altair and two million shares have been issued.
Altair can earn another twenty percent, taking their total ownership of the project to 90 percent, by doing a bankable feasibility study.
Management
Fayyaz Alimohamed, President, Chief Executive Officer & Director
Mr. Alimohamed has a B.Sc. (Hons.) degree in Economics from the London School of Economics (University of London) and is a Certified General Accountant (CGA). He has over 20 years experience in investment management, finance and consultancy. He previously worked at the Aga Khan University Hospital, Financial and Management Services Ltd. (a management consultancy set up by Morgan Grenfell & Co. Limited and Booz Allen Hamilton, Inc.) and as the Chief Financial Officer of the Key Capital Group.
He then moved to Dubai where he became Director of Investments for the Cupola Group, a large operating and investment conglomerate. He is also the President of Acamar Advisors, which provides management consultancy and corporate communications services.
Robert A. Archer, P.Geo., Chairman of the Board of Directors
A career explorationist, Mr. Archer has a B.Sc. (Hons.) degree in Geology from Laurentian University in Ontario and is a registered Professional Geologist. He spent more than 15 years with major mining companies including Newmont Exploration Canada Ltd., Rio Algom Exploration Inc., Placer Dome Canada Ltd., and Noranda Exploration Inc.
During that time he specialized in generative exploration and participated in 3 positive feasibility studies at Canadian gold mines, including the 14 million ounce Dome Mine in Timmins.
In the past 14 years he has held various positions at the senior management level of junior exploration companies. He is currently President and Chief Executive Officer of Great Panther Silver Ltd, the company he co-founded in 2004. During this time he has been instrumental in raising approximately $85 million for junior resource companies.
Shehzad Bharmal, Director
Mr. Bharmal has a B.Sc. in Mechanical Engineering from the University of British Columbia. He has over 15 years of experience in the mining industry with operating experience at mines and smelters. Currently Director, Business Improvement, at Teck Resources Limited, Shehzad was Manager, Operations, at Teck Cominco’s $ 1.8 billion Trail smelter, where he was responsible for managing plant operations, capital projects and infrastructure construction and maintenance. Previously he was responsible for Energy and Commercial Services at Teck Cominco, which involved concentrate purchasing for the Trail smelter, chemical and industrial sales, and surplus energy sales.
Warner Gruenwald, P. Geo., Vice-President Exploration
Mr. Gruenwald has 35 years exploration experience ranging from the management of grassroots to advanced stage exploration programs focused on precious and base metals. Mr. Gruenwald has operated as an independent consultant since 1985 and is the president of Geoquest Consulting Ltd. He is a Qualified Person (QP) as defined by National Instrument 43-101.
Share Structure
Shares Outstanding: 34,231,210
Warrants Outstanding: 3,075,500
Options Outstanding: 2,250,000 (weighted average $0.19)
Shares in Escrow: 2,130,000 (9.3% of shares outstanding)
Fully Diluted: 41,686,710
Treasury: $200,000.00
Debt: Nil
Closely Held: 25 percent
Abraaj Capital owns just under 10% of the Company. Abraaj is a $ 6 billion Dubai based fund, one of the largest in the Middle East.
Altair is presently undertaking a non-brokered private placement financing of up to $1,120,000.00 It will consist of up to 2.45 million in Flow-Through Units (FTU) at $0.16 per FTU for gross proceeds of up to $392,000.
The hard dollar part of the financing will consist of up to 5.6 million non-flow-through Units at $0.13 per Unit for gross proceeds of up to $728,000,000.
Each FTU and each Unit will consist of one common share and one-half of a common share purchase warrant.
Conclusion
Altair is currently preparing for another drill program by acquiring road construction and timber felling permits, improving the properties road system and conducting further exploration on its Prospect Valley Project.
When looking for a junior company to invest in the most important criteria for this investor is management, Altair management is experienced, well regarded in the industry and definitely capable of exploring, developing and promoting this project. And it’s the right project for the times – gold in what appears to be a massive footprint with excellent potential for further discovery.
Altair Ventures TSX.V – AVX and its Prospect Valley Gold Project in the Spences Bridge Gold Belt should be on every investors radar screen.
Is it on yours?
Richard (Rick) Mills
[email protected]
www.aheadoftheherd.com
If you’re interested in learning more about the junior resource market please come and visit us at www.aheadoftheherd.com.
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Richard is host of aheadoftheherd.com and invests in the junior resource sector. His articles have been published on over 200 websites, including: Wall Street Journal, SafeHaven, Market Oracle, USAToday, National Post, Stockhouse, Lewrockwell.com, Casey Research, 24hgold, Vancouver Sun, SilverBearCafe, Infomine, Huffington Post, Mineweb, 321Gold, Kitco, Gold-Eagle, The Gold/Energy Reports, Calgary Herald, Resource Investor and Financial Sense.
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Legal Notice / Disclaimer
This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment. Richard Mills has based this document on information obtained from sources he believes to be reliable but which has not been independently verified; Richard Mills makes no guarantee, representation or warranty and accepts no responsibility or liability as to its accuracy or completeness. Expressions of opinion are those of Richard Mills only and are subject to change without notice. Richard Mills assumes no warranty, liability or guarantee for the current relevance, correctness or completeness of any information provided within this Report and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Furthermore, I, Richard Mills, assume no liability for any direct or indirect loss or damage or, in particular, for lost profit, which you may incur as a result of the use and existence of the information provided within this Report.
Richard Mills owns shares of Altair Ventures
Altair Ventures TSX.V – AVX is an advertiser on his website aheadoftheherd.com.
