The technical verbiage in exploration updates can often overwhelm, sometimes leaving us with more questions than answers. But fortunately Jeremy Martin, Chief Executive of Horizonte Minerals prefers a less complicated style of writing, so it was with relative ease and interest we note the company’s latest news release.
However as keen followers of resource stocks will note, explorers can be a cautious lot; preferring not to get investors overexcited at an early stage and leaving themselves hostage to fortune. That’s why one always has read such updates extremely carefully, paying great attention to all the detail.
If you just gave the announcement a cursory glance then you could easily have missed some key points. So here are some thoughts.
Firstly, we recognise that investors are yearning for crystallisation of value, and with the Lontra Nickel project due a JORC resource calculation by mid 2010, this looks like it could now be on the way!
Work here has been delayed by rains which is disappointing, but short of acquiring an industrial strength umbrella the size of Hamburg, there’s not much else the company could have done. We also note that, to complement drilling plans, the company have now engaged well respected lateritic Nickel expert, Roger Billington, which we see as a good endorsement for the project and will complement the successful metallurgical test work already undertaken to date.
In short, the company clearly views Lontra as a serious enough project and management are now demonstrating how they intend to work towards transforming it into a valuable asset.
This stage in Lontra’s development is a somewhat reminiscent of African Eagle’s progress with their Dutwa nickel project. With the scale of the resource potential and meticulous approach the company is taking, they may well achieve similar results with Lontra – at which point talk of value creation would be on a whole new scale.
Ah, but secondly there is Tangara, which many investors see as a bit of a dead duck.
This is something we find rather anomalous. Before Tangara was farmed out to Troy Resources there had been a successful period of exploration by carried out Horizonte. Troy started off by focusing on new areas of the licence and before one starts to bemoan their results todate, one also needs to consider the value of the original exploration work carried out by Horizonte.
And why do Troy Resources keep pursuing this apparent dead duck? Because, as outlined in today’s announcement, they are now actively developing new targets within the main project area. In today’s environment companies don’t sink funds into drilling programs without a good reason. So with Troy bearing all exploration cost and a free carry for Horizonte, we can afford to have an optimistic expectation of better fortunes ahead or, in the words of Wilkins Micawber, ”something will turn up!”.
And then thirdly there’s the Anglogold Alliance. This is where we sat up and really started to take notice. There is nothing to get the heart racing like seeing the phrase “significant anomaly” jump out of your screen. Significant anomalies are great, but then we read “we are confident that as this develops there is the potential for discovering numerous targets with scalability for a major gold discovery”....
...and then we read this “New concessions have been applied for covering this target and follow up work is underway to advance the anomaly to define drill targets.”
So there you have it, and the reason why the term “significant anomaly” news was gently lowered into the announcement earlier on.
Could they have found something material already? Could be. But as previously mentioned, exploration companies are prone to circumspection and whilst Jeremy might like to make more of the such an important significant development, there is always the hostage to fortune issue; not to mention the need to satisfy the nominated advisors who scrutinise all market news releases. They will no doubt have ensured he erred on the right side of caution in this case.
We will be keeping a very close eye on developments here in particular. Its early days yet, but we believe this has all the hallmarks of a major new find in the making.
So in summary:
- Slight delay to Lontra Jorc due to rains but confirmation of technical expert appointment and clarity on revised programme;
- Tangara evidently still alive (even though some would argue to the contrary);
- The Anglogold alliance is working and dare we say it may have found something interesting – watch this space;
- LGA work progresses successfully.
A great mix. Solid underlying value from the Nickel projects and blue sky potential from Gold. Keep your eyes on that Anglogold alliance in particular!
This summary represents the views and opinions of Miningmaven, has been prepared for information and educational purposes only and should not be considered as investment advice or a recommendation. All opinions expressed in this weblog are those of the author and should not be construed as being made on behalf of any featured Company.
Readers are advised to do their own extensive research before buying shares which, as with all small cap exploration stocks, should be viewed as high risk. Investors should also seek the advice of their investment adviser or stockbroker, as they deem appropriate.
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