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The Doctors Are In the Belt

A helicopter tour above the Arizona copper belt, where the Resolution Copper Mine is being built, is a call to action.  Grounded now, I find myself searching for more shares

A helicopter tour above the Arizona copper belt, where the Resolution Copper Mine is being built, is a call to action. 

Grounded now, I find myself searching for more shares of Desert Star Resources Ltd. ($DSR:CA). Desert Star optioned properties from two companies I own: Eurasian Minerals ($EMX:CA), which is doing a princely job of fashioning a royalty portfolio, and Pilot Gold Inc. ($PLG:CA) — 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. DSR is my back way — much more speculative — into both Eurasian and Pilot.

Those two, 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 its 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)

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. Now, If you think I am going to get into the etymology and epistemology of project names such as Swift Katie, well, ladies and gentlemen I am not going within 80 km of that neighbourhood. 

Miners will be miners, even doctorates.

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. Might we mention, Dan McCoy at Cayden is a U of A doctorate of geology — University of Alaska. Cayden (CYD:CA) is 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 for Howard Fitch's Scottsdale one-on-one conference later this month — 15 or 16 resources companies, all top talking heads giving their pitches to registered USA brokers, asset managers and financial planners. 

If I am not mistaken, this is the 20th such one-on-oner Vancouver's Mr. Fitch has staged in the USA and Canada. (The late April confab at a smarty-pants Arizona resort can I believe take one more certified broker type. Pingeth TCR for the format schedule and contact details.)

Back on earth, we'll have more soon on Desert Star, which is mulling three high-priority copper-porphyry targets in the desert there near Superior.

I own all of these except Riverside Resources ($RRI:CA)

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:CA) 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.

Yet Prophecy's revised preliminary economic study of its ambitious Chandgana project in central Mongolia — the second Prophecy mine — is turning some heads. It is out now.

The skinny is the project 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 financing

  • Be it time to give the man a break Mr. Lee is living in Ulan Bator to make all this happen. I am told we will see large insider buying of PCY shares.

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.

Thom Calandra  

@thomcalandra for Twitter

A weekly five-point roundup of critical events in the energy transition and the implications of climate change for business and finance.