-- Posted Thursday, 1 March 2007 | Digg This Article
Introduction
For all you Journey Fans (The Musical Group), they had a hit song titled “Don’t Stop Believing”. I would encourage the same sentiment here with regard to this Junior Mining Company. Don’t Stop Believing!
There are about 1500 Junior Mining Companies on the Venture Exchange TSX.V. Out of those 1500, probably 300 of them deserve a second look. Out of those 300 companies probably half of them deserve a third look and perhaps even some of your hard earned dollars.
I sincerely believe that Journey Resources (www.journeyresourcescorp.com) falls into this latter category. I am a buyer and believe it is a value up to $1.00US. That’s my opinion based upon what I know after reading the available material and talking with management. The market cap is miniscule especially when you consider the quality of the three companies currently in their portfolio. Then consider that there are approximately 25 million shares outstanding. That’s a formula for growth given a hard driving management team that has a good deal of their own marbles in the circle.
The mission statement of the company is: “Leveraging the Hidden Value of Advanced State Projects”. Before, one can leverage, one must discover and JNY has discovered several excellent gems for its portfolio. To quickly review, JNY-TSX.V has three advanced stage projects.
They are:
1. The Empire Mine in Idaho
2. The Musgrove Creek Property in Idaho
3. The Vianey Project in Mexico
Old Empire Mill. Operated in the late 30's and early 40's, it was shut down due to a lack of manpower because of WWII
Empire Project: Dozer working in the AP Pit
The further along a company is with regard to their projects, the better off we are as investors. Journey, like several other companies of which we have an affiliation, has made it a point to only be involved with advanced stage projects. For a small company, this is no small feat to expedite.
Journey is a company which occupies a particular niche in the industry. It is an exploration company by nature, but also has projects which could elevate them to a production status in very short order.
"Musgrove Creek" sign posted by the USFS
Musgrove: Panoramic view looking SE towards the Patent Claims
When they talk about the idea of “leveraging the hidden value of advanced stage projects:, they are referring more to the idea of expanding upon a known resource of which other larger companies have spent a good deal of time, money, and expertise exploring and developing. For whatever reason, the larger company decides to abandon the project leaving companies such as Journey, which have a smaller tighter management and a more compact company infrastructure to deal with these smaller projects and make them profitable. The values are not so much hidden as they are not desirable to a larger company. These types of projects are prime targets for a company like Journey because they are “tweeners”—they are way beyond the grass roots stage of exploration and well underneath the radar of those senior companies looking for four or five million ounce deposits.
A Vianey Mine Entrance
Another Vianey Mine Entrance
Look at it this way. If you have a company with a huge overhead—people, accountants, equipments, global in nature, you have a company that doesn’t want to be dealing with a 500,000 ounce gold or silver deposit. Actually any project that is smaller in nature is out of their realm because it has to do with economies of scale. On the other hand, a smaller “tighter” company with less manpower, management, and money is only too happy to have a go at this type of project because they can make it profitable due to their own particular economies of scale. The key phrase here is “make it profitable”. Journey has several projects that fall into this category.
Men working at The Vianey Mine
Rich Mineralization at the Vianey Mine
One of their companies in Idaho is relatively close to another mine that has produced in excess of a half million ounces of gold. Ladies and gentlemen, a half million ounces of gold at $650 US is a very serious chunk of change. Their Musgrove Property has a 43-101 Resource of approximately 400,000 ounces of gold with an excellent possibility of hosting an additional 400,000 ounces of gold. Time and drilling will tell the ultimate tale.
Drilling at Musgrove Creek
This is a company which I’ve become quite involved with over the last six months or so. I believe it has all the elements to potentially double over the next six months. I could be wrong, but with three late state projects moving along, I think the chances are good. Add to that the idea that the precious metals bull market keeps chugging along. When the mainstream public finally becomes involved in this sector, the companies that are going to get noticed first are the ones in production or near production.
Ahead of the Curve
Incidentally, and as a quick aside, I know that most of you are quite involved in this bull market in gold and silver. The natural tendency is to believe that “just about everyone” is also involved. Nothing could be further from the truth. I keep tabs on the physical market via some of the metals wholesalers across the country. Believe it or not, they tell me business is slow. With Gold at $650 and Silver at $14.50, business is slow. You my friends are way ahead of the curve.
I wish this wasn’t exactly the case. Because many Americans are going to get blind sided one of these days and those who have a familiarity with this Precious Metals (PM) market are going to be in so much better shape.
You know how often it is said, gee whiz, “the other guy always gets the breaks”. Well my friends, this is your turn. You get the breaks. The only difference is that you’ve made your own breaks and that is usually how it goes in these sorts of things. Nothing is easy and good fortune comes to those who open the door for it. For whatever reason, you’ve opened the door.
Yes, it’s been a long struggle for those of us who have been wrestling with this PM market for five, six, or seven years. But realize that this time you are ahead of the crowd and if you play your cards correctly, it just might be possible to do quite well. In a primary bull market it is always best to get in ahead of the crowd.
I’m subdued about this even though the entire sector feels like it may explode upwards at any time. I think we all need to take a deep breath and realize why this Precious Metals market is where it is and why it is going where it is going—which is up. Subdued is another way of keeping ourselves in check and realizing that even when there is the possibility of making great fortunes, the idea is how we might help others in their time of need. This kind of thinking keeps us grounded. It is not always about the money or what things that money can buy, but how we might help a particular cause dear to our hearts. We all have one or two. And of course, money doesn’t buy happiness, but it does help to buy time which is our most precious commodity.
Now back to our story
Currently, Journey is endeavoring to make a production decision with regard to The Empire Mine in Mackay. However, they first have to complete the pre-feasibility study and then the Feasibility Study. My opinion is that they are going to accomplish this within the next nine months (or less) and this will be a huge accomplishment because there have been many obstacles that have had to be overcome.
I’ve seen Jack Bal, solve a lot of problems with regards to these projects. That’s a positive thing because lesser managers would have been tossed about the seas of unpredictability. This management team has been on this with a laser focus and their idea is to complete the feasibility studies and to go into production on the Empire as soon as humanly possible. They have the projects, the personnel and desire to do this. Then, I would think the next step would be to work with their people at Vianey and get it back into production ASAP. We might have to be patient because nothing happens overnight. But the good news is that these projects are advanced enough to make this a reality within a relatively short period of time. I would be buying my shares now when no one else is really looking and put them away.
There are very few companies selling at these levels—approximately $.35 US with approximately 26M shares outstanding as of December 27th 2006.
As we move forward in this precious metals bull market, companies such as Journey are going to be more and more difficult to uncover. I know Jack’s circle of contacts, and I believe he has the personnel to move these projects to the next level. To say that Journey was undervalued at $.35 US is an understatement.
Journey is a company flying under the radar screen but will soon be emerging because of the work being done and the projects being advanced. It is my firm belief that the Juniors have the greatest leverage and the Juniors with the greatest leverage are those that are closest to feasibility studies and then ultimately into production.
Please go to the Journey website Home page (http://www.journeyresourcescorp.com) and listen to Jack talk with Tom Jeffries on “Market Matters”. It will just take a few moments and you’ll come away with a feel for the man and the projects.
Third Time is a Charm
I’ve written up Journey twice, actually three if you count the one in conjunction with Trio Gold. They can all be found on my archives. Look under the dates of December 6, 2006, May 10, 2006, and June 8, 2006. As a frame of reference, The Longest Journey Begins with the First Step was posted May 10, 2006. We’re moving up on a year since that first article; ten months to be sure.
There is no need for me to write up the same material again. Take the time and review those three articles. There has been positive change in so far that all of the projects have been further tested and drilled out. The results have all pointed towards larger deposits and eventual production.
The primary objective of the 2006 work program on the Empire mine project was to prepare for the completion of a feasibility study; the drilling to date has provided necessary information. Continued drilling is planned for 2007. Jack Bal, president of Journey, commented, "These final drilling results provide necessary information in preparation for the further development of the pre-feasibility study."
Big Events
So the Feasibility Study on Empire is going to be a big slice of the momentum in upcoming months. More drilling is planned on the Empire.
Another big event that is occurring is the fact that Journey is planning on having an OTC listing within the next several months or so. When that happens, it will open up the Journey market to US investors. This makes it infinitely easier to trade the stock in US markets. In addition to adding volume to the company, the OTC allows the elevation of the company profile to the US markets.
My own opinion is that even though it is a pain in the neck trading on the TSX.V, it is best to establish positions now, even if we have to phone up our brokers and pay a few cents more here and there. Once things get rolling, I mean really rolling on these projects, a few cents is going to mean nothing.
Conclusion
One of the things that is so difficult to convey in articles or stock reports is the idea of the energy that is going into the corresponding projects. This company has energy galore and a drive towards success that is difficult to communicate.
Personally, I am most excited about Musgrove with the 400,000 ounce gold 43-101 resource that could conceivably go much higher with additional exploration. Of course, we won’t actually know until the drill programs are finalized.
I also like Vianey, the Silver Project in Mexico because it was once a mine and could re-open in a relatively short period of time. The infrastructure is in place and I’m a big believer in silver. They also have a partner in Wits Basin who has a mind set similar to the management team at Journey.
Power Grid near Vianey
Vianey Samples
Vianey: Vertical Grain of High Grade Mineralization
The Empire has loads of potential but I still would like to see a few more pieces of the puzzle fall into place. I am perfectly comfortable with Musgrove and Vianey at this point and feel both projects could carry the load even at this point. I thing Journey’s management feels opposite in that they feel Empire is the flagship property. Either way, investors win.
One more thing. Please visit their web site if you are remotely interested in this company because it is a thing of beauty. It has been very well put together. Listen to Jack’s comments with Tom Jefferies, even if they are several months old.
I’m going to come right out and offer my opinion on this one and then allow you to make up your own mind. Buy Journey up to $0.75 (seventy-five cents US) in this next phase up and then reevaluate the situation if and when that target is achieved.
Until Next time,
D. Stewart Armstrong
Consultant to the Junior Mining Sector
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. Any foreword looking statements must be considered as such and taken into account. 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.
-- Posted Thursday, 1 March 2007 | Digg This Article
