-- Posted Wednesday, 10 May 2006 | Digg This Article
Journey Resources JNY-V
The longest journey begins with the first step is an ancient Chinese proverb.
Journey Resources is a new recommendation. The company is based out of Vancouver with solid contacts in Nevada, Idaho, and Mexico. They have three excellent projects which are in a relatively advanced stage. Gold, Silver, and Copper are the focus, and they have a real probability of participating in this precious metals bull market.
I became involved with Journey because of my association with Trio Gold. Journey is earning a 50% lease interest in Trio’s Empire Project which I’ve always thought was a financially viable property since I first became involved with it. If you review the Projects Section below, you’ll understand the reasons why. You might also review my “Intro to Trio Gold” in the Goldseek archives for a broader more comprehensive perspective on Trio and how they will impact Journey and vice versa.
First Things First
I would ask that you first visit Journey’s website at www.journeyresourcescorp.com because it is extraordinarily well put together and gives you the opportunity of acquiring as much information as you possibly could want about any of these projects in their portfolio. Sometimes you can discern a good deal about the organizational qualities, professionalism, and focus of the company by its website. Journey has put an excellent foot forward in this endeavor. Additionally, there will soon be a photo gallery posted and that will give you a “visual” on the progress of the projects as they unfold.
Please visit their home page and simply read the three “latest presentations” in the middle of the page. I believe they are all in PDF formats. If you become lost on the site, simply click on the logo and it will bring you back to the home page. If you thoroughly read the information on the web site, you need not read past here. The website is that good and it makes my job so much easier when they are well put together!
Journey Resources trades on the Canadian Exchange under the symbol JNY. They currently have a miniscule market cap of around $5 million US and they have just fewer than 26,000,000 shares on a fully diluted basis. An OTC listing will be forthcoming I expect the symbol to be operational in about three months—perhaps less if they crack the whip. US investors are very much in favor of the OTC listings and I am advising all of my clients in Canada to acquire that listing! Journey is business oriented—not stock oriented, but business oriented. That is music to my ears.
As you well know by now, I like to talk with the management and discover “where their heads are at”; i.e., determine whether they possess a mind-set for success and to see if can determine if there are any kinks in the armor. I’ve taken great pains to acquaint myself with this management team and my first month impressions are indeed positive based upon hours of discussions with them in terms of where they are going and how they got to this point.
Jack Bal, Founder, President, CEO, and a Director of Journey Resources has a background in finance and business management. That will serve him well in the capital intensive world of junior mining company financing, where financial power is key to the success or failure of many projects. He is currently the Founder, President, Chief Executive Officer and a Director of the company. As a business executive, with over 11 years of experience in the software industry and public markets, he is well suited to move this company forward. He doesn’t really have an extensive background in mining. Does that bother me? In a word, No! He has surrounded himself with experienced people who have been there and done that. As importantly, he listens to them. Most importantly, he has put together an impressive package of properties and has put his own money into the deals.
1. The Empire Project: “Earning a 50% lease interest in the Empire Mine Project, a former copper/gold/silver produce, near MacKay, Idaho”.
2. Musgrove Creek: “Earning a 100% lease interest in the Musgrove Creek gold exploration project near Salmon, Idaho”.
3. Vianey Mine: “100% equity interest in the Vianey Mine which contains silver/lead/zinc mineralization in Guerrero State, Mexico”.
Often times we see geologists managing mining and exploration companies and while there is nothing inherently wrong with such a scenario, I sometimes think that geologists might do well to hire business executives to do what they do best—manage companies. However, that is not always possible due to the economic realities of the situation. Jack has experience in the operation of companies and fully understands that when the rubber meets the road; it’s all about making money for shareholders in a consistent and ethical manner. Problem solving is what CEO’s are supposed to do best and I think I’ve seen excellent evidence that Jack is at the top of his game in this department.
Oh yes, Journey has excellent geologists on staff by the way of Bill Bird (A geologist with 35 years in the industry) and Bob Bryce (A mining engineer who is president and Chairman of Abitex Resources in Quebec and a gentleman with a very impressive resume in the mining industry). These folks are working along side an excellent group of people; some of whom are Directors, but all are excellent business people. It’s a good crew headed up by some smart people.
Again, remember one of the five criteria we use to evaluate junior mining companies is “the ability to fund”. This puts Mr. Bal in an excellent position because of the critical role financing plays in moving all of these projects along.
Building Value in Journey Resources
More importantly, I think that Mr. Bal is one of those people who understand the realities of building a company from the ground up with value added. At this point he is not worrying about the stock price because he knows it will take care of itself. That is so critical in today’s world where so many folks appear to want everything now. What ever happened to the “deferred gratification patterns? That’s something I recall from my college sociology classes and it means that people put aside immediate short term gratification for longer term gains created by hard work and sweat equity.
Build company value and the stock price will follow. I would suggest to you that most of the companies I represent have that philosophy down pat. If they don’t, I really am not interested in an extended conversation with them. Why you ask? Simple unadulterated stock plays are really for suckers because they go up quickly and they go down quickly. We prefer investing in companies, especially the juniors that are more concerned about building company value over time. Of course they are high risk high reward, but one can remove some of that risk by being involved with good properties headed up by an experienced management team.
The President’s Vision for Journey Resources
I’ve spoken extensively with Mr. Bal and I believe I understand the vision he has for Journey. The motto, or the company slogan if you will, is “Leveraging the Hidden Value in Advanced Stage Projects”. It’s an excellent concept and states what the company is endeavoring to accomplish. But guess what—wonder of all wonders, here is a guy who is really intent on accomplishing what his company slogan is stating. Therein lies the difference between a stock play and a real shot at an exploration success.
For example, I believe Jack Bal and Journey Resources are going to complete the deal with Trio Gold by consummating the joint venture on the Empire Project in Idaho. That’s what initiated my getting involved with Journey. I wanted to know if they were real because I had recommended Trio and Trio ran into a few roadblocks. I know they were difficult ones to overcome but it was important for me to determine “up close and personal like”, whether Journey was up to the challenge. What I’m observing is that these roadblocks are slowing disappearing and this Trio Deal may well be completed. If it does, and I think it will, then Jack Bal will have proven to me that he is up to the task of problem solving. That’s what most junior mining companies are all about—problem solving. Show me a guy who knows how to solve problems and I’ll show you a guy who will be successful in this business. So when this Trio Deal comes together, watch out because Journey will be on a fast track towards real empirical success.
After the Empire deal is completed, drill rigs will be turning in a relatively short time according to the JYN business plan—perhaps as soon as June of 2006 on the Empire Project. The permitting process is well along although there may be another round to complete. I don’t think it should take much more than three weeks to have them completed because the project is almost entirely on patented ground (as opposed to government land). Empire may be throwing off cash within eighteen months of when the mine is begun. Is that a pipe dream? No, I think it is real based upon what I know and what you will know if you read the reports on Journey’s site.
On paper, all three projects look terrific.
The details of these projects are covered extensively on their website. I’ve been focusing a good deal of my energy on the relationships being developed between Trio and Journey and so the Empire Project holds the most interest, has the most focus. However, as I previously mentioned, this Vianey Silver play has big potential and I personally believe that silver is going to a price much higher than $13.00. Many of the traditional silver plays have gotten ahead of themselves. I’m only too happy to bring you a silver project that by itself is impressive, but when combined with the other two projects make this company very attractive indeed.
If you want to be involved in a silver play, the Vianey Play in Mexico is a way to gain exposure to silver without mortgaging the farm. The Silver price has been moving steadily upward and although it may correct a bit, there are few places to gain access to the silver market for a reasonable price. Vianey is one of them. Journey has created a viable relationship with Wits Basin Precious Minerals Inc. (“Wits Basin”), whereby “Journey will grant Wits Basin an option to acquire a 50% interest in and to certain mining claims comprising the Vianey Mine Concession, located in Guerrero State, Mexico.”
Wits Basin must also incur a minimum of US$500,000 in exploration expenditures on the Property by December 31, 2006 and an additional US$500,000 in exploration expenditures on or before September 30, 2007. Once Wits Basin has exercised its option and completed the payment and expenditure requirements, it will have been deemed to have earned a 50% interest in the Property, and a joint venture between Journey and Wits Basin will have been formed. There are additional payments to Journey from Wits Basin over the course of this contract, but this $1,000,000 will go a long way in the exploration of this property.
Yes, I am going to recommend this company. I anticipate this JV deal between Trio Gold and Journey will be consummated very shortly. I would feel very comfortable recommending Journey Resources up to $1.00-$1.25 US. Mr. Bal has talent, has surrounded himself with experienced people, has the ability to finance, knows the value of balanced promotion, and has put together a portfolio of properties which are truly advanced stage. Some of them could be in production within 24 months. Think about that.
Again, there is one thing that really stands out in my mind about Journey. They have not one, but two projects that could realistically go into production within 24 months. The Empire Project is probably first on the list and not too far behind is the Vianey Silver project in Mexico. In addition to that, the Musgrove Creek property in Idaho has something in the vicinity of 423,000 ounces of gold with an average grade of 0.03 ounces per ton. This is similar to Meridian’s Bear Track Mine which is located 12 miles to the NE and which produced up to 550,000 ounces of gold until 2001 when it was put in moth balls due to a very low gold price—a gold price in the realm of $275.00 US. Gold at $650 plus per ounce catapults Musgrove into “Camp Viable” very quickly.
Then, of course, when the Empire Deal moves forward, the future could be very bright indeed for both Journey and Trio. I honestly believe that Jack Bal and Harry Ruskowski have come to an understanding and that Trio’s Press Release of January 25 (www.triogold.com) will come to fruition.
And I truly believe that once this story gets out into the public domain, we should see some fireworks in the share price. The Joint Venture with Trio is worth the market cap alone.
Now remember—you must perform your own due diligence and Journey’s web site is an absolutely ideal place to do it. I believe that the information is accurate and relatively conservative; in other words there is no excessive hyperbole. I am after them to get more photos up on the site and I believe they will be doing so in the near future. The more I see of Golden Phoenix’s (GPXM) photo essay on their site, the more I am recommending companies utilize that same model. You can talk all you want but nothing says it like pictures. You know, being worth a thousand words is a good thing. Cheeze, I sound like Martha.
Please remember that I am biased, I own shares in the company and will be working with them on a regular basis so I must put forth all of the collective disclaimers ever known to mankind. And so I shall. But do review some of the companies I’ve been recommending in the recent past and I think you will observe a consistent pattern of successes.
Before we close this section, I want you to understand that this is a long term hold. What do I mean by long term? Perhaps a year, perhaps two years before the company is in production on some level. This is one of those companies that you buy and put it away. Don’t think about “flipping” it for a dime or a quarter profit because at the end of the day, I think you’ll be sorry that you did. The potential is enormous here. The business plan calls for developing two of these projects into working mines and simultaneously making new acquisitions utilizing the capital from the producing mines.
The Empire Mine in Idaho in Mackay Idaho
A Late Stage Exploration Project with the Potential for Rapid Advancement
Journey is currently earning a 50% ownership in a lease on the 301 hectare (approx. 744 acres) Empire Mine property. Located 5.5 kilometres southwest of Mackay, Idaho, this late-exploration-stage project comprises a poly-metallic skarn deposit with occurrences of copper, zinc, gold and silver. Jack anticipates the property can be quickly advanced to the development stage.
Since the early 1960s, Empire has undergone several exploration drilling campaigns by major mining and natural resource companies. The data highlights 208 holes drilled along the length of mineralization, including extensive drilling in the AP pit area and its northern extension, the Empire Pit. The AP Pit is a zone of near-surface mineralization located at the southern end of the Empire Mine deposit.
“Large copper outcropping” at the Empire property
A report dated August 8, 2005 prepared for Trio Gold Corp.; notes that Cambior Exploration USA, Inc. used the measured mineral resource block models to scope mine-able quantities of material within the known deposit. Cambior’s engineering group estimated the mine-able portion of the deposit as 33 million tons grading 0.44% copper, 0.20% zinc, 0.25 gpt gold, and 6.6 gpt silver at a 1:1 mining ratio. Recoveries are estimated at 70% gold, 60% silver, 80% copper, and 60% zinc.
These are impressive numbers and given the fact that this project can be put into production within 24 months bode well for the successful execution of Journey’s business plan. Again, www.triogold.com is the place to acquire additional information on the Empire Project.
Incidentally, the contract with the Diversified Drilling Company has already been signed and I’ve spoken with them directly. They have a rig in the immediate vicinity and it is being retained for the work at Empire. This is real and there is no doubt in my mind that the intention of all parties is full speed ahead with this proposed drilling program in Mackay Idaho.
Recent Exploration Results from Empire
A 10 hole RC drill program conducted in 2004 by Trio Gold Corp. was successful in improving the thickness of mineralization and confirming both the grades of copper and the presence of gold and silver in the AP Pit.
JNY anticipates spending US$1.5 million on the property during the next 12 months. Activities will include conducting a feasibility study on the near-surface resource, with the goal of bringing the property into production. Additional work will include a 65 hole (6,000m), “in-fill” RC/core drill program, metallurgical testing, mine modeling and mine planning. Bob Bryce will lend his expertise to the project at this level and he will be tremendous resource. I personally cannot say enough good things about Phil van Angeren, the head geologist and exploration manager for Trio Gold who also happens to be a director of that company. He is truly one of the unsung heroes at Trio Gold and has labored behind the scenes to delineate the mineralization at the Empire property. He also has been an asset in assisting both Journey and Trio with a smooth transition during this JV process. Everyone who has worked with Phil has said basically the same thing—he is terrific!
The Musgrove Creek Project in Idaho
A Low Cost, open pit gold opportunity looking to increase the Resource
The Musgrove Creek Gold Project is located 40 kilometers (25 miles) southwest of Salmon, Idaho and covers approximately 393 hectares (approx. 970 acres). The region has been the focus of mining activity since the late 1800s and the Musgrove property has had several operating gold mines between 1908 and the mid 1930s. Journey is currently earning a 100% lease interest in this deposit, which they believe to be comparable to that of the Beartrack Mine, located nearby. Several drill programs have been completed.
A report dated September 2004 for Wave Exploration Corp. references historical resource calculations by Newmont Mining Corporation estimating 340,000 ounces of gold. A 2004 resource calculation was completed for Wave Exploration and the Inferred Mineral Resource was estimated at 313,822 ounces of gold at zero dilution. All data to date is currently being re-evaluated on behalf of the Company by an independent Qualified Person and therefore should not be relied upon.
Significant gold deposits have been successfully mined nearby, the latest and largest being Meridian's Beartrack Mine, located 12 miles to the northeast of the Musgrove property. Beartrack was reported to have produced 549,000 ounces of gold.
The Musgrove Creek Project has loads of potential and I believe you’ll be well served by taking some time and reading the Report on the Website.
During the period 1994 to 2000, Meridian Gold Inc. (formerly FMC Gold Corp.), recovered approximately 20,200 kg (650,000 ounces) from 22.7 to 27.2 million metric tonnes (25 to 30 million short tons) of ore grading approximately 1.02 g/t (0.03 oz/T) of gold. Mining and recovery of gold was accomplished by open-pit and heap leach methods.
Exploration Results to Date
Jack Bal in the Vianey Mine
Looking Outward from the opening of the Vianey Mine
Gold mineralization occurs along a 4.8-kilometre (3-mile) north-westerly trend and has been identified in several parallel trends. The mineralization is believed to be related to a Tertiary epithermal event where rocks of the Apple Creek Formation are the primary host for gold mineralization. The primary deposit model on the Musgrove Creek property is epithermal style gold mineralization.
In February of 2004, a new NI 43-101 mineral resource calculation was estimated (Gruenwald and Makepeace, 2004). The resulting Inferred Mineral Resource was 8 million tonnes at 1.22 g/t Au. (0.036 oz/T) which would be equivalent to 9,761 kg (313,822 oz) gold, at zero dilution. A cut-off grade of 0.8 g/t Au (0.023 oz/T) was used.
The Vianey Silver Property in Mexico
This is an opportunity to bring a proven silver-lead-zinc mine back into operation.
Journey acquired 100% ownership Vianey property from Minerales Jazz S.A. in 2005. Located 250 kilometres south of Mexico City, the property covers 5,022 hectares (approximately 12,400 acres) and has a silver-lead-zinc mineralization production history.
The concession is located in the southern Mexican state of Guerr ero, 250 kilometres south of Mexico City and 160 kilometres north of Acapulco. Less than 2 kilometres away is the town of Atzcala, with water, telephone and medical facilities, as well as a sufficient labor pool. There is existing electrical power at the mine and a major power line passes near the property.
EXPLORATION RESULTS TO DATE A review of past calculations of potentially mineable tonnages of mineralization, including the most recent exploration activities completed in 1997, by Hawley, P.J., 2000b, provides a total in all categories of 345,020 metric tonnes grading 2.13% lead, 3.66% zinc and 269 grams of silver per tonne.
A report on the Vianey Mine has been completed that is NI 43101 compliant. This report is posted on the Journey web site and you can find it by going to “properties”, then go to “Vianey” and then go to the PDF “Download Tech Report” on the left hand side of the page. Please take the time to review this report!
We’ve covered a good deal of ground here, no pun intended. Most of the information on the projects are taken off the website or some of the technical reports on the site. I like to keep that information to a minimum so you will take it upon yourselves to read these reports. I’ve tried to focus more on the management side of things because at this stage of the game that is a part of the equation the average investor is not going to acquire from simply reading reports.
These initial reports run a bit long as they are the foundation for future information and the Press Releases I’ll be discussing with you in the future.
I became involved with Journey because I recommended Trio Gold and Trio ran into some unanticipated roadblocks. I wanted to see for myself it Journey’s management team was going to actually be able to help Trio over that hump after the JV announcement was made.
Make no mistake about it, at $3.00 copper, and $650 dollar gold, the Empire is very attractive. One thing led to another and before you know it, I became involved with Journey Resources. I liked what I heard and I appreciated Jack Bal’s effort to tell the story “straight up”. Jack is a businessman first and foremost and that experience is invaluable in a world where junior mining companies are sometimes run by non-business men. But Jack also possesses that intangible quality that makes many entrepreneurs successful—it’s a thing called enthusiasm. Of course that enthusiasm has to be coupled with knowledge and hard work and the ability to work with a team and delegate duties to capable people. That is no small feat.
Jack Bal’s vision, and hence, Journey’s vision is to create a cash flow situation out of the Empire project in a relatively short period—within 24 months from the commencing of the construction of the mine. Total return on investment could actually be completed in another 18 months which is unheard of in today’s world of higher and higher capital costs. At the same time the basic operation is beginning, there will be additional explorations made on not only this Empire project, but also on the Vianey Project and on the Musgrove Creek Property. As a businessman, Jack would like to run this company as a well oiled machine and I have confidence he can pull it off.
Put all three of these properties together during a raging bull market in commodities that is unfolding and you have the potential for something spectacular to occur. And while Mr. Bal is not a miner per se, he’s been around it all his life growing up in Sudbury, Canada which is a very large mining town. He has now surrounded himself with experienced mining and exploration people who are to complete the successful creation of a viable mining company that will be run more like a business than an exploration company. This is a major point to remember.
Again, with three great properties in late stage development, and a team of professionals skilled in business and a market cap of around 5 million dollars in a generational bull market in gold and silver, I would seriously consider Journey as a not too terribly risky investment for the portfolio of an aggressive investor. These types of investments take patience, but at the end of the day, the rewards could be more than well worth the wait.
I cannot really translate some of the intangibles to you that I’ve learned by working with Jack Bal over the past month on a one to one basis to gain access to this story. But unless he surprises the heck out of me, I think we’ll be bringing you a litany of news, and perhaps very good news over the next six months and beyond. Stay tuned as it is going to get exciting! Gold, Copper and Silver properties in a raging bull market in commodities can be very exciting indeed!
Until next time,
D. Stewart Armstrong
-- Posted Wednesday, 10 May 2006 | Digg This Article
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