Doug Casey get´s Mad. Ein reiner Cortez Trend Wert.
BEVOR DER ARTIKEL ERSCHIEN, WAR MIRANDA AUF 0,7. HEUTE 1,04!
August 1, 2005
Miranda Gold
(V.MAD, http://www.mirandagold.com)
BUY— Miranda’s share price has been on quite a roller-coaster ride over the last year, ranging from about C50 cents to C$1. This may
have more to do with gold price fluctuations than with anything the company has done, though the company also had a fair amount of cheap paper to work through. It has largely done a good job of doing so, and that’s a large part of why I feel the time is right to bring the opportunity to the attention of IS subscribers. Miranda is a Nevadafocused “get rich on process” play of the best kind.
PEOPLE AND PROMOTION
Miranda is ably led by Kenneth D. Cunningham, President and CEO. I know Ken well—he’s a geologist I think very highly of. Not a promoter at all, but the real McCoy. He has 29 years of experience in mineral exploration, mining geology and executive management. Seventeen of these years have been focused in Nevada. Before joining Miranda
last year, Ken was Vice President of Nevada North Resources (U.S.A.) Inc. where he acquired eight new properties and successfully negotiated leases with major mining companies including Newmont, Placer Dome, Newcrest and Barrick. Before that, he was Exploration Manager with Uranez U.S.A. Inc., during which time he led the exploration and acquisition effort that resulted in a 3 million ounce discovery in the Battle Mountain trend and a 1+ million ounce
discovery in the northern Carlin trend.
Also on the team are: Dennis L. Higgs, Chairman, Chief Financial Officer and Director (founder of Senate Capital Group Inc., a venture capital and resource management company that specializes in creating and/or assisting in the financing and development of early stage companies); Joe Hebert, Vice President of Exploration (a geologist with 22 years of mineral exploration and mining geology experience, with 15 of these focused in Nevada), and; Steve Ristorcelli, Director (another geo, with 26 years of experience). All together, I can say that I have a great deal of confidence in the technical abilities of this team. While it would be nice if Ken were a bit more of a promoter (the company web site is woefully out of date), I think good geology will out in the end.
PROPERTY
The basics for Miranda are simple: a project generator with multiple properties, mostly in Nevada’s Cortez Trend. Any of these could turn out to be a company-maker.
Since the industry-rocking announcement of the above-referenced CJV’s 1.5 opt, 400-foot intercept, more and more people are coming to think
that the Cortez Trend has the potential to rival the famous Carlin Trend (180 million ounces), also in Nevada. Many companies are now scrambling for land in the area, but companies like Bravo, above, White Knight, below, and Miranda, who were already there, have a distinct advantage over the newcomers.
Miranda holds 733 claims, covering 15,151 acres—or approximately 24 square miles—in this trend. The company has wasted no time in lining up high-powered JV partners, including: Newmont (Red Canyon), Barrick (Horse Mountain), Newcrest (Redlich), Agnico-Eagle (Cono and BPV), PDUS (Fuse), Golden Aria (Coal Canyon).
The company announced on July 5, 2005, that Newmont has completed a month of surface work on Red Canyon project. The work consisted of detailed outcrop mapping, interpretation of previous geophysical surveys, 3-dimensional modeling and a geochemical survey. Newmont has decided to go ahead and drill the project and is permitting 13 drill
sites for a first phase of drilling, which should start this month.
Just before that, Miranda announced that Barrick has started fieldwork on Horse Mountain, and that Newcrest has begun drilling Redlich project. PDUS has also completed geochemical surveys at Red Hill and an announcement of drill targets is expected any day now. Agnico-Eagle is evaluating gravity data that relates to the BPV and CONO properties, and MAD expects them to drill at least one hole on each property this year. Golden Aria should also have begun evaluating Miranda’s Coal Canyon project by now as well.
More recently, Miranda announced that it has signed a letter of intent to lease the Angel Wing property in northern Elko County, Nevada, which is known to contain high-grade, gold-bearing, epithermal veins. As the project is still very early stage, we’ll reserve comment for a future edition.
PAPER AND PHINANCING
Miranda is well cashed up with over $3.5 million in the bank and a low burn rate: its joint venture partners are footing the bills for most of the current exploration. The share structure is not particularly tight (35.5% dilution if all outstanding warrants and options are exercised), but at least the number of shares outstanding is not bloated, and the market cap is reasonable (both leave a lot of room for growth). There are, however, 1,292,250 warrants at 20 cents due to expire in November. Miranda has burned through waves of paper like this in the past (which says a lot about the people holding that paper, and their confidence in Miranda), so I’m not particularly worried. Especially given our expectation that we’ll have had positive news on the exploration front by the time November rolls around. That having been said, if results take longer than anticipated, the stock could take a hit in the fall, even without any bad news on the exploration front.
PRICE
This is a very busy company, with most of the work being paid for by some of the world’s biggest players, and all of it in some of the most prospective turf on the planet—a good formula for a major discovery. This is not a high-volume stock, so don’t chase it. I recommend accumulating it over the next month or so—a little here, a little there. By the time fall rolls around, I think you’ll be glad you did.
NOTES ON NEVADA GEOLOGY
The properties of our three new Nevada picks cover a substantial portion of the Cortez Trend, which runs roughly parallel to, and 50 miles southwest of, Nevada’s famous Carlin Trend, itself just west of Elko, Nevada, in the Eureka-Battle Mountain Gold Belt.
CARLIN TREND
The Carlin Trend is North America's most prolific gold producing area and the second largest gold depository in the world, after the Witswatersrand, in South Africa. The trend is a 40-mile long, northwest to southeast zone of low grade, epithermal deposits, discovered in 1961 by John Livermore and Alan Cope, geologists working for Newmont. The mineralization was near surface (only 25 meters down), but so finely disseminated that all traces were microscopic.
Assays graded 6.2 g/t gold. Newmont opened the original Carlin open pit mine in 1965, before the introduction of heap leaching. When that technology matured in the 1980s, production ramped up to where the Carlin Trend now accounts for over 35% of all US gold output. More than 107 million ounces of known proven and probable reserves occur on the Carlin Trend (there are up to 180 million ounces of resources, depending on what you include in the number). Underground mine development, in higher-grade ore down dip from existing open pits, started in 1994. Such deposits have been discovered at Rossi, Dee, Meikle, Gold Bug, Rodeo, Deep Post, Deep Star, Turf, Four Corners, West Leeville, Hardie Footwall, Deep Carlin, Mike, Rain, Tess and Rain Extension. These recent underground discoveries contain a total of 42 million ounces of announced gold reserves, at an average grade of 0.347 ounce/ton. Large quantities of additional unannounced gold resources are now drill-indicated on the Carlin Trend.
CORTEZ TREND
The Cortez Trend is in the same area of Nevada, and is similar in size to the Carlin Trend, but is displaced about 50 miles southwest. It includes the Pipeline Mine Complex (12 million ounces) to the north and the Gold Bar Mine (1 million ounces) to the south.
At meeting of the Geological Society of Nevada in mid 2004, a representative of the CJV (Placer Dome/Kennecott Cortez Joint Venture) announced that they had intercepted 1.5 ounces of gold per ton, over an interval of 400+ feet (some reports have it at almost 2 ounces per tonne). Current resources at Cortez Hills, as announced by Placer Dome, the joint venture operator, stand at 6.8 million ounces (the CJV now has over 22 million ounces in reserves). The CJV plans on drilling between 100 to 200 holes at Cortez Hills this year. Since the much-discussed CJV announcement at the Geological Society of Nevada meeting, the Cortez Trend has become one of the most active prospecting areas in Nevada. The expectation—or hope—that the Cortez Trend is an opportunity like the Carlin Trend was in the 1960s is
clearly the driving force in the areas. But is this hope realistic?
COMPARISON
The Eureka-Battle Mountain region of Nevada has two layers of sedimentary rock: the “Upper Plate” and “Lower Plate”.
The Upper Plate does not typically host higher-grade gold mineralization, but can contain indications of higher grades in
Lower Plate rocks that have “leaked” upwards. Lower Plate mineralization (Silurian age Roberts Mountains formation)
correlates with the major gold deposits of the Carlin Trend, where a great deal of surface erosion and other geological activity has brought Lower Plate blocks (" horst blocks" ) within range of open pit mining in some places. " Carlin style" deposits are disseminated gold mineralizations, usually structurally controlled. Mineralization may be predominantly oxides, sulphides, refractory or carbonaceous sulphides.
Cortez Trend deposits are replacements or disseminations in calcareous sediments and limestone strata, also in Lower Plate rock. As on the Carlin Trend, one of the keys to discovery is finding Lower Plate rocks that have been exposed in or through " windows" where the Upper Plate has been eroded.
The largest and highest-grade discoveries along the Carlin Trend are associated with major faults. These are very old faults, as are the Cortez faults, though there is considerable disagreement among geologists on numerous issues relating to these faults. Geophysicist Hans Rasmussen, who once worked with Newmont on the Carlin Trend, believes there is a strong possibility that the Cortez Structural corridor system may be both older and bigger than the Carlin fault
system. Being older allows more time for more geological events to occur. The reasoning is long and technical, but the bottom line is that if Rasmussen is right, the Cortez Trend could prove to be not only as big as Carlin, but bigger. If Cortez is so big, why wasn’t it discovered earlier? Well, one consequence of the geological events that formed the trend is that they also buried it, making it harder to find and more difficult to prove. But that is exactly what numerous
majors and juniors (including the three recommended elsewhere in this issue) are working on, so time will tell soon enough.