-- Posted Wednesday, 1 October 2003 | Digg This Article
Home page: http://www.mexgold.com
Charts: Click Here
MEXGOLD RESOURCES INC: RETURN ON CAD$10,000 INVESTMENT |
Purchase Date | No. of Shares | Purchase Price | Cost (CAD$) | Price Today | Value Today |
September 3, 2003 | 7'100 | 1.40 | 9'940.00 | | |
Total | 7'100 | 1.40 | 9'940.00 | 1.68 | 11'928.00 |
Profit | | | | | 1'988.00 |
Profit (in %) | | | | | 20% |
1.077,000 OUNCES OF GOLD AND 45,600,000 OUNCES OF SILVER IN MEXICO
Business Summary
Gammon Lake, as a major shareholder of Mexgold Resources Inc. owning 26.7%, has announced that Mexgold Resources Inc. has completed a reverse takeover of Seven Clans Resources. Gammon Lake acquired its 5,000,000-share interest in Mexgold without issuance of any Gammon shares; it paid a cash consideration of CAD$500,000 equivalent to 0.10 per Mexgold share in a private placement. Upon Gammon Lake acquiring its position in Mexgold, Mexgold has since completed a private placement for CAD$2.25-million dollars at a price of CAD$0.50 per share.
President of Gammon Lake, Fred George states, "We are pleased to see that Mexgold Resources Inc. will commence trading on the TSX Venture exchange. Gammon Lake and its shareholders stand to realize a significant value increase in its Mexgold share holdings."
Mexgold currently has 18,740,561 shares issued and outstanding of which 29.1% are owned by insiders and are subject to escrow conditions imposed by the TSXV. The largest shareholder of Mexgold is Gammon Lake Resources Inc. which owns 5,000,000 common shares representing 26.7% of the issued and outstanding shares. Mexgold also has a working capital of approximately $3,000,000, which includes the proceeds of a $2.25 million financing obtained prior to the reorganization. This financing satisfied a condition of the TSXV to complete a financing of $2.0 million.
Mexgold Resources owns a 100% interest in a single gold and silver mineral exploration property in the Republic of Mexico, known as the "Guadalupe Gold-Silver Project". The Guadalupe Gold-Silver Project is located in Sierra Madre Occidental physiographic province (See Figure 1), approximately 300-kilometres southwest of the city of Chihuahua and 200- kilometres west of the city of Hidalgo de Parral. The project is comprised of five mining titles, totaling approximately 439.24 hectares.
A report by Pincock Allen & Holt ("PAH"), a firm of independent Qualified Persons as defined by National Instrument 43-101 adopted by Canadian Securities Administrators, describes the regional and local geology, geophysics and geochemistry and results of previous limited exploration and concludes that the Guadalupe Gold-Silver Project contains a mineral resource that is worthy of exploration. The tonnage and grade of this inferred resource estimate is 11,800,000 tonnes containing 1,077,000 ounces of gold and 45,600,000 ounces of silver or 1,780,000 ounces of gold equivalent at 65:1, silver to gold. Average grade from historic work is 2.84-g/t gold and120 g/t silver. This estimate does not address other mineralized structures and potential for significant strike extensions that are known to be present within the Guadalupe Gold-Silver Project boundaries. Successful exploration results in any of these areas could significantly enhance overall project potential.
Recent News: PAH has recommended a 40-drill hole exploration program along with field mapping and geochemical sampling for a total cost of USD555,000.
The first stage of exploration will consist of two phases drilling program. For the first stage of exploration at Guadalupe y Calvo diamond core drilling methods will be employed with the over all program budgeted at 4800 meters. This phase one will consist of 20 holes designed to test both the near surface and deep high grade targets. After the results of these hole have been analyzed an additional 20 holes will be drilled. Environmental and surface use permitting is nearing completion and drilling will commence upon receipt (expected in October).
Fundamental Considerations
1,077,000 ounces of gold and 45,600,000 ounces of silver represent USD33 per outstanding share which at present trades around USD1.10.
Gammon Lake Resources which has been one of our best performing recommendations hold 29.1% of Mexgold. This would indicate that this excellent company sees a bright future for Mexgold.
Technical Considerations
The gold price remains in a solid up-trend. A price target of $380 to $420 over the next six months seems to be attainable. Strong resistance exists around $400 - $425 but will eventually be overcome.
The shares of Mexgold started trading in Canada on September 18 at CAD$1.20 and they closed at CAD$1.54 for a gain of 23%.
The fact that there is no trading history, it is anybody’s guess where these shares will trade a few weeks from now. You may wish to watch them a bit and try to pick some up on any day of weekness.
Our recommendation: Try to BUY below CAD$1.75!
Peter Zihlmann
www.pzim.com
investment@pzim.com
September 29, 2003
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Disclosure: The author has not been paid to write this article, nor has he
received any other inducement to do so. The author is a shareholder in the
company and will benefit from any increase in the company’s share price.
Disclaimer: The author’s objective in writing this article is to invoke an
interest on the part of potential investors in this stock to the point where
they are encouraged to conduct their own further diligent research. Neither
the information, nor the opinions expressed should be construed as a
solicitation to buy or sell this stock. Investors are recommended to obtain
the advice of a qualified investment advisor before entering into any transactions in the stock.
GoldSeek.com does not own any shares at the time of this release in this company or
has it received compensation for publishing this report.
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-- Posted Wednesday, 1 October 2003 | Digg This Article
