December a time for bargains: Boulder Investment

Year-end tax-loss selling may be less of an issue in 2001 than in previous years, but Boulder Investment Partners analyst Dorothy Atkinson still considers December a great month to buy shares in Canadian mining juniors.

Atkinson recently put together a list of juniors she considers “real bargains,” which are outlined below.

– Trading below 70, Val d’Or-based Canadian Royalties (CZZ-V) is Boulder Investment’s favourite nickel/copper/platinum-group-metals explorer. The company is active in northernmost Quebec at the Expo-Ungava joint-venture property and the wholly owned Phoenix prospect, both of which are near Falconbridge’s Raglan mine.

Atkinson writes that the junior’s properties “have produced excellent results this year, and we anticipate 2002 will be as strong.”

In mid-December, Canadian Royalties retained Haywood Securities to offer, on a best-efforts basis, up to 1 million flow-through shares priced at 70 each.

Canadian Royalties has found more platinum group mineralization in decades-old core that is now being reanalyzed and relogged to take into account today’s higher values for platinum group metals.

– Second on Atkinson’s list is Vancouver-based Masuparia Gold (MPG-V), which has “had an excellent 2001 drill program” at its Greywacke gold project in northern Saskatchewan.

Greywacke is equally owned by Shane Resources (SEI-V) and JNR Resources (JNN-V), but Masuparia can earn up to a 70% interest by issuing 500,000 shares by May 2005 and by spending $2.9 million before May 1, 2008.

Masuparia has already confirmed and added to a previous resource at Greywacke, outlined by Cameco (CCO-T), of 328,000 tons grading 0.27 oz. gold per ton. The junior plans to continue drilling gold targets early in 2002.

Masuparia, which currently trades under 10, has more than $500,000 in the treasury and remains well-funded to continue exploration work at Greywacke.

– With its shares being beaten down to 50 in mid-December from $2 in June, Philex Gold is suffering from tax-loss selling and a lack of direction.

The company has a 30% carried interest in Anglo American‘s (AAUK-Q) new Boyongan porphyry copper-gold deposit in the Philippines. Atkinson writes that “results from this discovery have been spectacular, but the company has been slow to finance and has suffered the consequences as its debt load to its parent [Philex Mining] becomes a major concern.”

Indeed, following the release of the analyst’s report, Philex sold an effective 10% equity interest in Silangan Mindinao Mining, which holds the Boyongan project, to Anglo American for US$20 million.

Proceeds are earmarked for three areas of Philex’s balance sheet: its bank debts, which total US$14 million; its current liabilities; and closure costs associated with its soon-to-be-shut Bulawan mine, also in the Philippines.

For 2002 at Boyongan, Philex expects Anglo will carry out 15,000 metres of definition drilling and 3,000 metres of scout drilling in Magpayang, to the south of Boyongan, and other adjacent areas.

– Trading under 30, Vancouver-based Nevsun Resources (nsu-t) caught Atkinson’s eye for its high-quality gold assets in Africa. In particular, the high-grade Tabakoto project in Mali is at the final feasibility stage and could see construction of an open pit in 2002.

Nevsun has already wrapped up drilling at Tabakoto and contracted Snowden Mining Industry Consultants to update the deposit’s resource base and mining model.

Atkinson predicts Nevsun will be acquiring more assets.

– Turning to the diamond scene, Atkinson writes that exploration companies “have had a good run with the current rush in Nunavut and the Northwest Territories. We believe they will go higher as the play develops.”

For bargain-hunters, Boulder would buy Calgary-based Tyler Resources (TYS-V), which trades in the 8-to-12 range, and Edmonton-based Shear Minerals (srm-v), which has bottomed out under 20.

Neither company’s properties are close to Ashton Mining’s discoveries, but Atkinson says both have new discoveries that could be significant.

Randy Turner’s Diamondex Resources (DSP-V) has completed its earn-in obligation on Tyler’s Kelsey property, 300 km northeast of Yellowknife, and is now vested with a 60% interest. Tyler holds the remaining 40%, and a joint venture has been formed to explore the property further.

The partners are considering a program of ground geophysics and drilling to test several kimberlite targets during the first quarter of 2002.

Tyler has also acquired property in the emerging Coronation Gulf diamond district in Nunavut. The acquisition is being conducted in alliance with Northern Abitibi Mining (NAI-V), a junior with a portfolio of diamond projects in Quebec.

Tyler now owns 100% of the Crystal and Gem properties, under option to Navigator Exploration (NVR-V), as well as 30% of the Carat property under joint venture with Diamondex, and 40% of Kelsey.

Shear is active at six diamond projects in the North Slave region of Nunavut, the Lac de Gras region of the Northwest Territories, and northern Alberta.

Shear and partner Marum Resources (MMU-V) have applied for six additional diamond-exploration permits covering 600 sq. km immediately north of the Birch Mountains in northeastern Alberta. These permits, which are not included in the partners’ original Birch Mountain option agreement, cover an extension of a geological structure containing a cluster of aeromagnetic anomalies. Drilling of 10 anomalies is to begin this winter.