Vital Metals (VML.ASX) released its latest quarterly report on 1st November 2010. The stock in recent times has drifted back to 9.3c despite some excellent preliminary results from sampling. The company is set to open strongly with buyers at 10.5c, over and above the last price of 9.7c. The report can be viewed at the Vital website. The company has an excellent position in the West African state of Burkina Faso. It offers one of the lowest cost, less advanced exposures to the gold boom...meaning that they are at least 2 years away from mining. This means of course several things:
1. They will be in a position to lock in a gold loan at very high prices
2. They will have the capacity to add a great deal of value through exploration because they are currently not valued with gold in the ground.
3. They might be taken over by more fully-valued gold miners wanting to shore up, or consolidate African gold exploration tensure
4. They offer the spectre of some very exciting drilling results. This is of course the 'speculative' appeal, but also the risk, so its good that we can see a great deal of potential at this stage.
The other stock I like of this nature is MIL Resources (MGK.ASX). In the last 2 weeks, MIL Resources has secured a Chinese partner to advance its Poi copper/gold project, from which encouraging trenching results have been forthcoming. There is also potential with the other early stage gold targets. I believe their world-class titanomagnetite project is at least a decade away from development...though if anyone is going to bring this project forward, it is a Chinese or Indian partner, and they have secured one of those. The appeal of this project is the low-temp route to the production of high-strength steels. I do however think more metallurgical work is needed before this project goes ahead. Check out the deal with the Chinese group. The stock has fallen back to 3c because of the dilution (i.e. Chinese equity raising, vendor shares for Titan Metals), however the result is higher equity in some great projects, and funding by the Chinese partner off-balance sheet moving forward. The worst is over...look forward to some nice copper/gold drilling results! The latest listing will dilute, but it will not see these partners dumping shares on the market, as in the case of a shareholder raising.
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