With cash flowing steadily from its Crofoot-Lewis mine and exploration plans taking shape in Nevada and South America, Granges (TSE) is “seriously undervalued.”
So argues David Williamson Associates, a firm of analysts based in London, England.
Most of Granges’ cash flow stems from Crofoot-Lewis, a gold-silver, heap-leach operation 60 miles west of Winnemucca, Nev. The mine started up in 1988, since which time it has yielded more than 575,000 oz. gold.
The mine lies on the western flank of the Kamma Mountains, with gold mineralization hosted in a 4.8-km-long, 2.5-km-wide belt that trends in a north-south direction.
Reserves stand at 66.5 million tons averaging 0.019 oz. gold per ton, and exploration over the past year is expected to add to these figures.
The report by David Williamson suggests that gold production will rise from the current level of 100,000 oz., peaking at 137,000 oz. by 2000, and that the mine will endure beyond 2001.
Silver production will likely rise as well, peaking at 685,000 oz., and operating costs are expected to fall to US$191 from US$255 per oz.
Meanwhile, Granges has broadened its exploration focus to include prospects in Peru and Ecuador.
In Peru, the company has agreed to acquire the Cerro Conor Punta property, which lies between Newmont Gold’s (NYSE) Yanacocha gold mine and the Maqui Maqui copper-gold porphyry deposit.
It has also gained a 41% stake in Zamora Gold (CDN), which is the largest holder of exploration concessions in Ecuador, and controls more than 90,000 hectares in southern Peru. Zamora is looking to discover disseminated or stockwork mineralization in skarn deposits or volcanic rocks.
The junior has outlined several geochemical anomalies, one of which comprises 6 sq. km.
Granges has cash balances exceeding $30 million.
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