A really good example of this is Copper Mountain (TSX:CUM), which has seen a recent pullback in the price of copper and with it a somewhat retracted share price. Copper Mtn. is just putting the finishing touches on construction and will be in production in June of this year. That means they will be mining copper in approximately 6 to 8 weeks from today. The mine is located about 20 km's SW of Princeton, BC Canada, so it is situated in a very stable mining area both politically and environmentally. The company owns 75% of the project while the remaining 25% is owned by Mitsubishi Metals of Japan. This is a unique partnership in that Mitsubishi Metals bought into a 25% holding of the company so as to ensure that all copper concentrate will be shipped to them. This means that Copper Mtn. does not have to worry about trying to compete out on the spot market as all copper mined is already spoken for.
Copper Mtn. also has their cost worked out to about $1.30/lb and with copper having a slight pullback they still stand to produce huge profits given that copper is currently about $4.20/lb. With the demand for copper most likely to increase looking forward and the price most likely to make a comeback and possibly even rally higher I would say Copper Mtn. is at a very nice discount today. Currently the price is about the $6.83 level. This is definitely worth a look. The companies webpage is at www.cumtn.com.
Okay, now for silver. One company I like is called Kootenay Gold (TSXV:KTN) and don't let the name fool you. This company has a whole list of high potential properties. Many they have entered into joint ventures with other companies and some they still remain in 100% control of.
The flagship property for Kootenay is called Promontorio and is a silver project situated in Mexico. Located in Sonora Mexico leaves them with some very impressive neighbors in the area. This whole area is dotted with either exploration projects and many mines both present and historical. At present Kootenay has a 43-101 compliant resource of 10m ounces of silver. This is expected to expand significantly as the company is drawing close to the end of a 10,000m drill program. Many intercepts have been rich with mineralization but there are many results pending yet which would indicate there is the potential for even further expansion of resources. The CEO has stated that this property has shown indications that the potential is there to see 100 million ounces of silver. I might add that in addition to the silver there are is also both lead and zinc credits to be had. The total recoverable metal value from the last 43-101 report is stated as $320,000,000.00. Depending on the results that are still pending this resource could be potentially anywhere from double to quadruple. Kootenay Gold has never been the fastest to release news but I would expect that some news may be forthcoming in the not to distant future. This is only based on my opinion and not on any knowledge I might have.
The management is a team of experienced people that have all proven themselves to be more than competent in what is required to bring this project right through to production. For more information on this company and the host of properties they hold including Promontorio please go to the company website at www.kootenaygold.ca.
My next company of interest for a silver play is Great Panther Silver Ltd. (TSX:GPR). This is a Canadian based company but unlike Kootenay this company has two producing mines in Mexico. The Guanajuato Mine Complex is Great Panther Silver's flagship operation. The property consists of 28 claims, totalling 1,107 hectares. The concessions are 100% owned by Great Panther's Mexican subsidiary, Minera Mexicana El Rosario, S.A. de C.V. The main claim block covers 4.2 km of the highly significant Veta Madre vein structure and is located on the Central Plateau of Mexico in the State of Guanajuato. The City of Guanajuato, where the mines are located, is 380 km by road northwest of Mexico City and is serviced by an international airport near the city of Leon.
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The Guanajuato property overlies the core of the prolific Veta Madre silver-gold structure. These world-class low sulfidation epithermal deposits to date have total production of over one billion ounces silver and 4 million ounces gold over a 450 year mining history. One marvellous aspect of world class deposits is their defiance of typical size due to multiple phase, overlapping events. This is borne out by structural studies and fluid inclusion work. The fluid inclusion work has shown that boiling horizons (and associate silver-gold deposition) occur over a vertical range of at least 600 metres below the present surface. There are consistent structural aspects between the various deposits on the Guanajuato property, which include bends, step-over and cymoid loops. Presently, Great Panther Silver has:
Of the four kilometres of Veta Madre strike length covered by the Guanajuato property only 500 metres (250 metres at Cata and the same to date at Rayas) have been adequately tested from the 400 to 600 metre depths. This deep drilling is ongoing at Rayas, and will start at Valenciana in 2011. A newly commenced drill program at Guanajuatito will focus on the 100-300 metre level depths through 2010 and 2011 until former deep development is rehabilitated and deeper drilling planned. To a certain degree deep extensions of mineralization can be found by following known deposits down plunge to depth. Drill hole EUG10-057 has shown that systematic drilling can discover new "blind" mineralized zones. Many zones at Guanajuato are relatively small, but as history has shown, conditions are primed for world-class low sulfidation epithermal silver-gold systems. Since the bottom of the silver-gold mineralization has not been reached the Company is optimistic that with diligent, systematic work any deep large silver-gold deposit will be found with the 2010-2012 deep drilling. Resource/Reserve Estimate When Great Panther acquired the Guanajuato Mines in 2005, there were no NI43-101 compliant resources and the Company had to rehabilitate the mine in order to begin establishing a new resource base at depth. On December 15, 2010, Great Panther announced the completion of an updated NI 43-101 compliant mineral resource/reserve estimate on the Cata Clavo, Los Pozos, and Santa Margarita zones. The new Measured and Indicated mineral resource, using a cut-off grade of 135 g/t silver equivalent, contains 5,455,650 ounces silver equivalent (Ag eq oz). Inferred mineral resources are estimated at 2,676,924 Ag eq oz. The Measured and Indicated mineral resources include 4,372,701 Ag eq oz categorized as Proven and Probable mineral reserves, using a cut-off grade of 185 g/t silver equivalent. This is the first time that NI 43-101 compliant reserves have been estimated for the Guanajuato Mine and is a positive step in confirming the long-term viability of this historic operation. The new resource base represents a 53% increase over the previous resource estimate (for just the Cata Clavo; see news release June 30, 2009), even after deducting the production from that zone over the last year and a half. This demonstrates the ability to not only replace what is being mined, but to increase the resource base and extend the mine life with additional drilling.
More information on the mineral resource/reserve estimate can be found in our news release of Dec. 15, 2010. For more info please go to their website at www.greatpanther.com. So that about does it for today and I hope this has been helpful to some of you. It is nearly impossible to predict with any certainty what the short term trend will be in regards to the market but I highly encourage those who are looking for investments to pay close attention to prices over the next several days. I do not expect this correction to be sustained at all, but rather I expect that the long term trend will continue to be a rally upwards. I have received no compensation of any kind for this post. I own shares in Copper Mountain and Kootenay Gold. I do not own shares at this time in Great Panther Silver. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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