Resource Stock Report - V14 #3.0,
Markets, PDAC, LER, HMG, PEM - Mar., 7, 2008
PO Box 1020 Owen Sound, Ontario, Canada N4K 6H6
resource@bmts.com
Yearly subscription $199 cdn/year or US$209
While my record is still intact, it seems every time I go away for a while lots
happens and there is some excitement in the markets. This time we�ve seen
commodities and in particular metal prices soar to significant new highs. Gold
got very close to $1,000, silver is over
$20, platinum well over $2,000 and even palladium has jumped over $500.
PDAC 2008
First let me say that this years PDAC was huge and very busy. I think the
number that ended up registering was around 27,000. Mind you, it was not so much
that the investment crowd was huge, but the industry has grown, the number of
junior exploration companies that are out there now is getting to be mind
boggling. It is only possible to meet with a fraction of them over the course
of the 3.5 days. However, the good industry contacts I have developed over the
years really helps in narrowing things down to more of the better companies.
Following is a few companies I think you should consider buying and you will
read more about them in future issues of the newsletter. I am adding Lero Gold,
Hana Mining and Premium Exploration to our selection list
Lero Gold LER on the TSXV
Recent Price C$0.85
Shares out 71 million approx.
I had a breakfast meeting with management who are quite impressive. They are just
winding up their last deal Oriel Resources, ORL on Toronto and AIM. It is a
nickel and chromite play in Kazakhstan that is about to be bought out for
around $1.5 billion.
Management is very well experienced and connected in Kazakhstan and Russia. The
stock did take a pop this week and that was on the news that Lero officially
appointed Dr. Alexander Yakubchuk as director and chief executive officer, and
Dr. Sergey V. Kurzin as chairman.
Dr. Yakubchuk joined Lero in January, 2008, as a consultant, bringing
more than 14 years of experience gained in the states of the FSU, including
Russia, Kazakhstan, Kyrgyzstan and Uzbekistan, as well as internationally in
Australia, Mongolia, China, Canada, and some European countries. Most recently
he held the position of exploration manager for Europe and the FSU for Gold
Fields International Services Ltd. Dr. Yakubchuk has previously worked and
consulted to companies such as BHP-Billiton, Norlisk Nickel, Goldcorp, Rio
Tinto, World Bank and Inco, and previously lectured as an associate professor
at Lomonosov Moscow State University for five years.
Dr. Sergey V.
Kurzin is a
Russian-born research engineer who moved to the United Kingdom in 1990 and has
played a key role in initiatives to acquire and progress several important
Former Soviet Union mining assets. These include Julietta (a high grade gold
deposit in Magadan, Russia with Bema Gold), Kupol (a high grade epithermal gold
deposit in Chukotka, Russia also with with Bema Gold), the Varvarinskoye copper
and gold skarn deposit in Kazakhstan with European Minerals Corporation. He
also played a key role in establishing UrAsia Energy Ltd, a uranium producer
with mining operations in The Republic of Kazakhstan.
These two and the rest of management are very aggressive and can move projects
ahead very quickly in this part of the world. They arrive at an ideal time for
Lero. Within months, Lero is expected to have a resource calculation for the
Taldybulak copper-gold project in Kyrgyzstan, as well as their Kazakhstan-based
Karchiga copper project.
I went over the projects with management and they are both world class and at
an advanced stage because of former work by Russia. They do need to be upgraded
to today's 43-101 standards but that work has been well underway for sometime
and should bear fruit very soon.
Taldybulak copper-gold project
They are partnered with Gold Fields on the Taldybulak copper-gold project who
invested $2.5 million in Lero and can earn 70% by funding $10 million in
exploration and then completing a feasibility study. I expect the first
resource estimate that we see on this project could be multi-million ounce, as
high as 3 to 5 million ounces gold.
Taldybulak is a 300 million tonne copper/gold porphyry target and eventually
could be a 5 to 7 million ounce discovery with reasonable chance of 10 million
ounces. It is located near surface, has easy access and within a 43 square km
exploration property.
Lero also hold three other large concession on this mineralized trend: Barkol
232 sq kms. with several geochemical anomalies, Kentash 42 sq kms. Au-Cu
porphyry, samples- 12 g/t Au, 300 g/t Ag, 1% Cu and Korgontash 66 sq. kms. -
Soviet resource of 17.4 Mt at 0.6g/t Au, 0.57% Cu, 3.2 g/t Ag. These all fall
under the Gold Fields JV
Karchiga, Eastern Kazakhstan, 70%, 47.3 sq. kms.
At the Karchiga volcanogenic massive sulphide project, Lero has completed 1,879
metres (21 holes) of diamond drilling. Both infill drill holes on the known
zones and exploration drill holes to expand the known mineralization were
completed during the fourth quarter of 2007. Samples have been submitted to the
laboratory for analysis and
results will be released once all have been received. On the assay results,
Lero will commence modelling and reinterpretation of the mineralized zones to
calculate a 43-101-compliant inferred resource.
There is a Soviet resource that could be classified as inferred of 6.3 million
tonnes of 2.77% copper (1.35 M oz. Au equivalent).
Lero is planning to drill the project out in 2008 into a measured and indicated
category, moving to pre Feasibility in 2009.
Summary
Within the next month or so we should see news on drill results and resource
calculations. This is suddenly going to vault Lero into the ranks of a junior
holding a large gold resource. This will then get noticed.
Management is very aggressive and moves quickly, they are just coming off the
heels of another success, Oriel that they took from $0.50 to currently $2.25.
In this short time they moved their project to production at 148,000 tonnes per
year and are now selling it out for $1.5 billion.
I expect management is going to advance their current projects in Lero at
similar lightning speed. And they will not stop there as other acquisitions are
planned.
As this new aggressive gold junior becomes known in the market place, the stock
will move much higher and it is a much tighter deal then their last one. Oriel
has about 650 million shares out while Lero currently only has a fraction of
that at 71 million.
Vanguard Shareholder Solutions
Tel: (604) 608-0824
Toll-Free: 1-866-398-1088
Web site http://www.lerogold.com
http://www.stockhouse.com/comp_info.asp?symbol=LER&table=LIST
I do own 25,000 shares (c) Copyright 2008, Struther's Resource Stock Report
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Struther's Resource Stock Report
PO Box 1020, Owen Sound, Ont. Canada N4K 6H6
519-374-9332 Editor: Ron Struthers
Email resource@bmts.com
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Investment Opportunities & Strategies in the Markets for Tomorrow
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