-- Posted Wednesday, 21 February 2007 | Digg This Article
Area Surrounding Mt. Kare
Profile of Mt. Kare from the Air Showing Camp
Background
I first wrote about Buffalo in June of 2006 and then again on March of 2006. Both articles can be found in my archives on Goldseek. I believe there is ample information contained in those two articles to bring you up to speed.
When I added Buffalo to my list of Juniors, it was because I thought it had the potential to double in 2007. This is still my opinion, only now even more so.
Buffalo Gold (BYBUF-OTC and BUF.U-CA) has several areas of major focus. Of course, the flagship property is Mt. Kare in Papua New Guinea. I’ve been covering Mt. Kare fairly extensively over the past five years and plan on continuing the exercise. This is a project that is joint-ventured with Madison Minerals (MMRSF-OTC and MMR-CA). My reasons for continuing to cover it are because I personally believe that success is ever closer due to the ongoing commitment to the project by the companies involved. It has been a long and winding road as we’ve been climbing up Mt. Kare both literally and figuratively. Patience has been required. But then, patience is required on all of these quality junior mining projects. Patience also seems to be the one commodity in short supply in the investor arsenal.
Just so there is no misunderstanding, I work for both companies and have serious positions in each of them. Please read my disclaimer at the end of this article. I tell you this because there is nothing to be hiding in the closet. I think that by now, Howard Ruff and I are the two people that have been recommending Madison the longest. Since Buffalo is joint ventured with Madison, we want both companies to do well. I am going to cover this relationship between Madison and Buffalo in my next article about Madison. It is a relationship which I’ve promised readers I was going to elucidate upon at some point and I think that point is coming closer. But just for the record, this joint venture between Buffalo and Madison was an excellent deal for both parties and both parties stand to fairly participate in the equity being developed by the current operator—Buffalo Gold.
Recently, the share price has had a bit of a pull back. I remember that John Embry was on Rob-TV on February 8, 2007 at 12:30 PM EST with Jim O’Connell. Mr. Embry is one of the better respected analysts in the gold community. A viewer called in and asked about the share price of Buffalo which was then in the $1.20 C cent range give or take. John mentioned that he was a buyer at those levels. I would have to concur with Mr. Embry realizing that Buffalo Gold was above $2.00 US not too long ago, and that nothing has significantly changed within the company since then.
Why does a company such as Buffalo Gold or Madison Minerals trade within such extreme ranges? Simply put, it is the nature of the beast. There are many people that simply trade or flip these stocks not realizing that one day they should have zigged when they zagged, thereby discovering that they are out of position when the big move occurs. In my mind the big move is closer than we imagine. Junior Mining companies by their very nature are illiquid. My opinion is that it is better to let the others trade in and out for a dime or a quarter; I’m holding for the long term having full confidence in both the projects and the management of both companies. There is no doubt that the ball is now squarely in Buffalo’s Court.
The other consideration is that gold has been consolidating in the $650 range and the Junior Gold (and Silver) Mining Companies have been consolidating as well. I believe that if you buy the quality companies and “put them away” for the long haul you’ll do very well.
There is one point I’m going to repeatedly stress. A significant up move in gold is coming as the US dollar and its peripheral elements deteriorate. Eventually, gold and all quality gold companies will find their equilibrium within that context. Advanced stage exploration projects along with smaller producers are going to do extremely well. My take on it is that if we position ourselves correctly, I just might be able to pay off the mortgage. Catch my drift?
Buffalo’s Latest Press Release
The latest press release from Buffalo Gold was released on January 18, 2007. It pertained to Mt Kare and had a sub-title that stated Buffalo Gold Strengthens Geological team and moves Economic Study Foreword. Within it, they reported the results of a long list of drill holes on their infill program at the Western Roscoelite Zone (WRZ) There were several exceptional holes such as the one of 112.0 meters of 5.04g/t including 25 meters of 13.86 g/t gold. They also reported another hole of 100.9 meters of 1.56 g/t gold in hole MK06-75 including 25.9 meters of 2.25 g/t gold. These are very respectable numbers. Of course, the market always wants more and the old adage in the junior mining business comes to mind: “buy the rumor sell the news”. The only problem in this case is that the news is good. The “big picture” is beginning to emerge. If you visit their website at www.buffalogold.ca and go to their “investor info” section, you will find all of their press releases, including this latest one.
In that same press release they also stated that Buffalo is on schedule for completing its Stage 2 Preliminary Economic Feasibility Study at Mt. Kare by June 2007, and will use these results in the recalculated resource estimate to be released in conjunction with the Study. “Following the success of the infill program at the WRZ, Buffalo now has four diamond drills at site to test additional objectives both in the vicinity of known mineralization and new exploration target areas” was additional commentary.
River Down the Valley
The pre-feasibility and feasibility studies are extremely important in this business equation between Buffalo Gold and Madison Minerals. My understanding is that these studies are right on track. June could be a very important month for both companies. I know I’ll be watching closely as to how events unfold.
Buffalo Gold is more than a One-Trick Pony.
Buffalo is also exploring a highly prospective portfolio of properties in Australia which include targets for gold, uranium and nickel.
If I had to give reasons as to why BYBUF was a buy, I would have to refer to all the reasons I’ve stated in past articles. These would be reasons such as projects, management, the ability to fund, the willingness to promote, and integrity.
Damien Reynolds, the CEO of Buffalo is a smart enough; sharp enough CEO, President, Director, and Chairman of the Board to Realize that it is best to diversify. The diversification can be seen in Longview (LV) and in the multitude of companies that have emerged through that vehicle.
An Excellent Investor Relations, Public Relations Department
One of the best ways to be a successful investor in the Junior Mining Sector is to pick up the phone and talk directly with the companies you find interesting. The solid ones always have excellent “IR” departments. Julie Hajduk heads up the IR department for Buffalo and she is one of the best. No kidding, she really is. What makes her so valuable? She knows the deals inside and out and from every conceivable angle and then she is willing to talk with you so you understand them. Her contact information is: E-mail: julie@buffalogold.ca; Phone: 604.685.5492 or Toll free: 1.888.685.5492. Talk to Julie and don’t be afraid to be on their mailing list. Most importantly, people respect Ms. Hajduk as a professional because she cares about the companies she represents and I simply cannot overstate how important that trait is in this world of hurry up and get off the. If you have issues with any company always remember to be kind and courteous to the company representatives—in other words, don’t harm the messenger because you may need them at some point in the future. IR people are simply doing their jobs.
Speaking of Investor Relations, Buffalo will be participating in Goldseek’s February 22, Virtual Investment Gold Conference (goldseek.com/2007), wherein they will be presenting company focus, news and the particulars of Mt. Kare. It is an event I highly recommend. The traffic has increased with each subsequent conference that Peter has presented both in the Silver and in the Gold Sectors. As in Goldseek Radio, this is another avenue where Goldseek is assisting both the companies they represent along with the investors interested in them. If that sounds like an unadulterated plug for Goldseek, you are absolutely correct!
If you want to hear about Buffalo Gold direct from the source, this is the place to be. Remember, that the entire conference will be “archived” for at least a month so you have plenty of time to visit and revisit both the speakers and the company presentations. I am quite familiar with three out of the four companies involved and I have the utmost respect for the speakers. This should be a good one.
Conclusion
The gold community is in the third inning of a nine inning game. We’ve had a bit of a consolidation in gold and in quality junior gold companies over the past six months. Buffalo Gold is simply in the middle of this mix and when gold starts moving again, Buffalo Gold will move up right along with the rest of the sector that has excellent stories they are developing.
When a company like Buffalo, with its assets and management, has a pull back, it is usually for one of only several reasons. There is a lack of bids because there is a lack of news. Perhaps there is a major seller who is unloading into the market for one reason or another—usually because they took part in a major financing and need to raise cash in a hurry regardless of whether they are in the money or not. These entities can always fall back on their warrants. Or it is because gold is in a consolidation phase and people don’t have the patience to stay the long haul.
Right now, in my opinion, Buffalo Gold is a screaming buy. I personally will purchase it up to $2.50 and then hold it for the long haul. That’s how people make money in these markets. Those are not my words, but those of Richard Russell who suggests that people who really make money in markets that are in primary trends, purchase large positions early on and then adhere to those positions over the long haul.
Buffalo has the added benefit of people who care about what they know are quality projects. Don’t underestimate this for even a moment, Currently, thee is a good deal of “head hunting: going on within the industry. Management if they are smart are taking good care of their top people. Damien Reynolds, et al, understand this concept as well as any group I know.
Infrastructure with Road and Power Lines
Northern Roscoelite Zone
Pinuni Creek Upper Basis
Slide Area of Mt Kare
The Man and the Mountain
View of Upper Pinuni Creek
Until Next Time,
D. Stewart Armstrong
Consultant to the Junior Mining Community
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consulting@seacoastpub.com
Disclosure and Disclaimer by the Author: In the spirit of full disclosure, although D. Stewart Armstrong, Seacoast Consulting, and or Seacoast Publishing, are independent entities, they may be employed by this particular company, may own shares in this company, and this company may be an advertiser on GoldSeeek.com which is an internet site in which the author is consistently involved. Although the author is an independent analyst, he is also a paid consultant by the Junior Mining and Exploration Sector. The author is a private investor in the precious metals markets. He is not a board qualified or licensed investment advisor. All material is deemed to be accurate and to have been gleaned from reliable sources in a timely fashion; but said material cannot be construed as being totally complete or absolute. Consequently, the aforementioned parties can take no responsibility for any investment decisions you make or the results thereof. The author does not accept responsibility for any possible errors in calculations disseminated by any company he represents or in which he is involved, nor does he guarantee or insinuate any type of investment results. Consider any and all recommendations as personal opinions on the part of the author. It is highly recommended, and even insisted by the author, that investors, individuals, and all interested parties, conduct their own due diligence before becoming involved in any investment or with the interests of any company mentioned. That process would include direct contact with the company to confirm any facts, opinions, or ideas represented by these companies in general or on any Company CD’s distributed and referred to in these articles. The author would suggest the possibility of hiring professional advice from a certified investment advisor before making any investment transactions. Again, please consider these articles as opinions and please understand that investing in Junior Mining Companies is a high-risk, high reward proposition and you must take full responsibility for your own actions because there is always the possibility of losing all or a portion of your investment capital. This disclaimer applies to this article, Email correspondences, and all communications with both public and private entities. This disclaimer is applicable to all articles and communications published previously and to ones to be published in the future.
Cautionary Note to U.S. Investors The United States Securities and Exchange Commission ("SEC") permits mining companies, in their filing with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We use certain terms in this website, such as "mineral resources," "measured," "indicated," and "inferred resources," that the SEC guidelines prohibit us from including in our filing with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No. 0-30150, available from us by contacting the Investor Relations Department.
This article may contain information (photos) about adjacent properties on which we have no right to explore or mine. We advise U.S. investors that the S.E.C.'s mining guidelines strictly prohibit information of this type in documents files with the S.E.C. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.
-- Posted Wednesday, 21 February 2007 | Digg This Article
