http://www.sortweb.com/cwsimages/Mis...
Geodex Minerals (GXM.V;
C$0.75) recently released the final
results from its 2007 drill program,
and this batch of news featured
some outstanding holes on Zones I
and II. In addition, the company
reported new, highly encouraging
results from the higher-grade East
Flank Zone at its Sisson Brook
deposit, plus the discovery of a
new “Ellipse Zone” a few hundred
meters west of the previously outlined
mineralization.
As you’ll remember, in 2007,
Geodex focused on the large tungsten-
molybdenum resource in
Zone III. In fact, most of the
16,000 meters of drilling was in
this zone, which was also the subject
of a scoping study released in
November 2007. That study projected
a net present value for
Sisson Brook of $693 million, at
an 8% discount rate. That’s obviously
far more than the company’s
current market cap...
and the scoping study didn’t even incorporate
about two-thirds of the 2007 drill
results.
A new resource estimate,
incorporating all of the 2007
drilling, should be ready in April.
It’s expected to upgrade most of
the Zone III resources to the measured
and indicated confidence
levels, and the revised resource
will then be used as the basis for a
pre-feasibility study. Geodex plans
to have the study in hand by
September.
Amazingly, despite the tremendous
value of Zone III, there’s considerably
more to Sisson Brook.
The two northern zones, Zones I
and II, were also discovered and
drilled by Texasgulf Minerals in
1979 and 1980. At the time, these
elongate, parallel deposits were
reported to have a non-compliant
43-101 copper-tungsten resource.
The two zones extend over a
strike length of 800 meters and
appear to be contiguous with Zone
III, but a thin layer of glacial till
hides the exact relationship.We
also don’t know why they contain
more copper and less molybdenum
than Zone III.
Geodex completed 3,151
meters of drilling on these two
northern zones last year. This
new drilling, combined with
previous Texasgulf holes, will
be used to calculate the first
resource estimate for Zones I
and II this spring, when the
resource estimate for Zone III
will also be updated. The drill
rig will be back on the job about
then, having completed a
mechanical overhaul.
I’ve been buying Geodex
below C$0.75, glad for the
opportunity to pick up a company
with a project NPV worth
nearly 14 times its current market
cap.
Remarkably, the latest
results testify to the potential for
the resource and NPV to grow
even larger. Also testifying to its
undervalued nature: The company
recently closed a financing, a feat
that hasn’t been easy for most
companies to do in the depths of
the recent market malaise.
But Geodex was able to close the
financing at more than a 50% premium
to the current share price.
The company also adopted a poison
pill shareholder plan, so it also
believes the current share price
doesn’t reflect the underlying
value.
I’m getting to sound like a broken
record, but Geodex is a major
buy at these levels.
