Grounded now, I find myself searching for more shares of Desert Star Resources Ltd. ( TSXV: DSR). Canadian banker Vince Sorace’s Desert Star optioned properties from two companies I own: Eurasian Minerals (TSXV: EMX), which is doing a princely job of fashioning a royalty portfolio, and Pilot Gold Inc. (TSX: PLG) — a member of our TCR 8.
I bought 10,000 Desert Star shares at market while we were skyscaping the copper district around the town of Superior (photos attached.)
Coming soon — a metric ton of material to share about Desert Star and those company connections that Mr. Sorace put together in Canada, Denver, Nevada, New Mexico and Arizona.
DSR is my Jim Morrison back door — much more speculative and so much cheaper — into mid-stage multinational resource developers Eurasian and Pilot.
Those two larger prospectors, owned here, are either budding smelter royalty generators, in Eurasian’s case, or a font of actionable metals properties and ventures in Nevada and Turkey, in Pilot‘s case.
Moira Smith, Pilot’s chief geologist, is working Kinsley in Nevada and delivering potent gold core. She is a doctor of the rock science, and she tells me today, “Eurasian has the greatest collection of geological talent in the industry.”
These days, I am in our TCR research increasingly breaking bread and rocks, and sharing choppers, with doctorates.
“Neat that they all seem to be University of Arizona geology Phds,” says John-Mark Staude, a U of A geology doctorate who schooled with U of A doctorate David Maher.
If this is getting too involved, just skip to the brief interview we gave this morning with Small Cap Power in Toronto. It’s at the close of this report.
David Maher, Dr. Maher I rephrase, is one of our hosts on these DSR flyovers of the Arizona-optioned properties from Eurasian. He works for Eurasian via Bronco Creek Exploration, a Tucson arm of Denver and David Cole’s Eurasian Minerals (EMXX in USA). Dr. Maher is going to be one heck of a geology professor one day; right now, in his early 40s, he has time to make his fortune among the saguaro and sage of the Arizona desert.
Eurasian has at least four doctors of rock and maybe five. It’s active in USA, Russia, Turkey, Australia and elsewhere.
John-Mark is not a Eurasian Minerals doctorate. He is CEO doctor of rock at his own Riverside Resources, a smaller version of Eurasian and adept at using other people’s money to explore in Mexico, Arizona, Haiti. John-Mark, a member of our TCR family, just laid out Riverside’s exploration plans, with a unit of mammoth Antofagasta, for Swift Katie, an 80-square-km copper-gold-silver porphyry property near the town of Salmo, BC, in the Nelson Mining District, Canada.
Dr. Staude is a Yankee living in Vancouver, Canada. Swift Katie, well, ladies and gentlemen, the name is now what you think. Miners will be miners, even doctorates. Still, this Dr. Staude has a gorgeous family, and our UofA geologist might even know an athlete at home named Kate. But what do I know?
At any rate: all of these PhDs, all this rock around them in their assorted option pacts, JCs and earn-ins, and none of these companies here are getting attention from individual investors these days. Not Desert Star, not Riverside, not Eurasian.
Pilot Gold is the exception, a bit like Cayden Resources operating in Mexico; in that Cayden and Pilot assays are showing extreme high-grade precious metals at serious lengths, not too deep, either. Cayden means warrior in some language. Pilot means pilot.
Might we mention, Dan McCoy, pulling all the geology levers at Cayden, is a U of A doctorate of geology — University of Alaska, that is. Cayden is CYD in Canada and its stock is on fire, thanks to two Mexico projects.
Now if you think I am spending too much time on the U of A theme because I attended graduate school at the University of Arizona for English and Journalism, well, what can I say. I like Arizona. I am headed back later this month.
Back on earth, we’ll have more
about Desert Star, which is mulling three high-priority copper-porphyry targets in the desert there near Superior.
(Photos attached of flyovers; includes Vietnam-era fighter pilot and 321gold researcher Bob Moriarty)
I own all of these except Riverside Resources, which is RRI in Canada.
Prophecy: We keep visiting the theme: thermal coal — about the only thing in commodities that has not staged a thrust upward. John Lee’s Prophecy Coal is struggling on all fronts, getting plans in place to railroad its high-grade northern Mongolia coal into Russia and across Mongolia.
Sadly, recent financials for Prophecy (PCY in Canada) are riddled with gaping losses. The management discussion hints at lost opportunities in the booming nation. John Lee often takes heat for his pay package, and how he might have sold his Wellgreen Platinum shares a week or three too early in 2013 and early 2014.
Yet Prophecy’s revised preliminary economic study of an overreaching
Chandgana project in central Mongolia —
a second Prophecy mine — is turning some heads.
The skinny is the project, designed to power cement plants and utiilities across the region and into southern Russia, is cheap, and the coal, which I saw with my own eyes 5 weeks ago, is real and plentiful.
- 28% Internal Rate of Return
- 5.3 Years payback on US $30.9 million capital (I like that part)
US $47.8 million net present value (“NPV”) at a 10% discount rate
An after-tax financial model was prepared using an initial mine gate price of US $17.70 per tonne, 30 year mine life and 100% equity financingIt might be time to give Mr. Lee a temporary pass on the cred-gauge. That is, see if the 40-year-old dealmaker, who is living in Ulan Bator, can rescue Prophecy andmake all this happen. I also am told we will see large insider buying of PCY shares in an imminent filing.Nothing in my world looks cheaper these days — excepting perhaps a Colombian mine project or three. If British Columbia securities regulators give PCY a green light on a technical concern, a nagging one, the stock looks ripe for a 5-cent pop. I likely will buy after this report is out.