Wednesday, April 20, 2011

MIL Resources (MGK.ASX) - expecting trenching results

With MIL Resources (MGK.ASX) having bedded down its issue and raised $5mil. I have bought back into this stock. They have fallen to an important support, and with funds raised, and months of trenching under their belt, we can expect a drilling program ahead, and I think this will be a precursor to a JV partnership to fund any further development. I am expecting positive drilling results from this project given the appealing grades from trenching, as well as the extensive occurrences of gold/copper. I believe they are on to a Highlands Gold style deposit (high grade fissure deposits) rather than massive, disseminated porphyry-copper targets. This will auger well for a faster development, but a shorter mine life unless they can find repetitious structural controls....which is not far-fetched. Its still early days, but its a good trading opportunity.
I am comforted by the strong rally on Wall Street overnight, as well as the strong gold price.

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Sunday, April 10, 2011

Marengo Mining (ASX:MGO) - major copper project

Damn! I missed out on Marengo Mining (MGO.ASX) before Friday closing...and now its running away from me. I had an order on at 31.5c at 3:40PM Friday, and missed out in some late buying. This is a stock which I recommended back in October. Meant to tell you lately, but never found my desired entry price. On Friday, I just gave up and decided to get some...or so I thought :( Hope you did better.

Ok...I managed to get a few MGO on opening at 35c....not sure how because I expected them to open higher...anyway frenetic trading on both sides. I'll have to wait to see the ledger as they are now 36.5c. The appeal of this stock is that they have a VERY large copper-gold deposit in PNG; the company is well-supported by institutions, and the company is at a fairly advantaged stage of development. Copper-gold are the commodities to be in, so if you have them, you are in a good position. I am expecting a rally over the next few weeks in this stock.

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Wednesday, April 06, 2011

Golden Cross Resources (GCR.ASX) - scoping it out

Golden Cross Resources (GCR.ASX) is a stock which I have taken a great deal of interest in over the years. The reason is simple enough - the company has been a prolific 'project generator' insofar as it is able to generate projects and get others to fund. That appears to have stopped after Dr David Timms left the company, but nevertheless his legacy remains.
The positive for this company was that it has a potentially large target in the Central-West of NSW. The problem with this large target is the grades. We can expect more tonnes from this project. In fact I expect a lot of more tonnes from:
1. Extensions of the Buckley's Proposed Pit
2. Possibly from nearby satellite deposits around Larras Lee, which has had only a few drill holes put into it some years ago...with pretty decent results.

My concern is that a lot of investment might be going on hope. They have already outlined a 150Mt resource containing 1.5Moz of gold (grade 0.3%Au) and 0.5Mt (grading 0.3%Cu) of copper. The project has great infrastructure. The problem I have is the low grade. You also have to conclude that similar grade material at Larras Lee (assuming so) would not be viable given the extra trucking distance.
What this project needs is a new method of mining. I have a few ideas, but I have no idea as to their commercial viability. These types of deposits were formed by the micro-fractioning of the rocks millions of years ago, and subsequent ingress of mineralised fluids. It would be nice to think that these rocks can be leached the same way. i.e. You drill the region with heaps of holes, allow fluids to enter these holes to react with the host minerals, which were formed at far higher temperatures and pressures, so might be unstable under present conditions. The problem is achieving 'micro-fracturing'. The problem is the confining pressure. The drill hole provides some access, but hard to see micro-access being achieved...which brings us to the contemporary solution: Drilling holes at 25m spacing, developing tunnels into the ore, blasting the ore, crushing it, grinding then extracting the minerals.
Anyway, why can't I dream as well.

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Tuesday, April 05, 2011

Union Resources (UCL.ASX) - support

Having exited Union Resources (UCL.ASX) some weeks ago I re-entered the stock today. They are back to their issue price. I suggest they will not stay at this price very long for the simple reason:
1. The company will be making good progress on its feasibility study
2. There is the prospect of news related to those studies, including costings
3. The issue was only a 1:10 issue, so there is not going to be much dilution. For this reason, I don't see them going back to 1c. They touched 1.2c today, and that I think will be their support.
4. Fertilisers is a food-related business, so I expect some good news there.
5. Morocco which is experiencing some political unease along with the rest of North Africa is the largest supplier of phosphate. It will be interesting to see if that becomes a value proposition. Perhaps not. Though I do think UCL/MAKs JV in Namibia would have to be the most compelling exposure to the phosphate market. There is plenty of experience in this reason dredging the seafloor for diamonds, so I look forward to the feasibility study. The upside in food (i.e. commodity) prices can only make this project more appealing....particular given the environmental disaster in the USA precipitated by uninformed, emotive environmental groups who have caused food stocks to go into fuel production. People are starving because of environmentalists.

I expected the stock to fall back to this price level, so having reached my target price, once again I see myself trading into this stock.

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