Edgewater Exploration

Edgewater Exploration (EDW-TSXv) has 1.5M ounces of Gold in Spain and trading at a ~$20M enterprise value! That’s $15per ounce of gold for every share. And unlike many juniors that may be struggling to raise capital right now, EDW has close to $12M in the bank and plenty news flow coming.  This stock is starting to look DIRT CHEAP. 

If you like advanced stage gold assets, deep pockets and experience management, there is nothing to not like about what Edgewater has created for shareholders.

There are two ways to value this company right now: 

1)   Value Corcoesto (1.5M ounces in Spain) at $10 per ounce enterprise value (a fraction of peer comparables) and you are getting the upside the very exciting exploration Ghana prospect which looks like early days Bibiani (5M+ ounces gold and) or Chirano (5M+ ounces gold) for free.

OR…

2)   Value the Enchi Ghana exploration project at $15M   enterprise value which looks like early days Bibiani (5M+ ounces gold) and early days Chirano (5M+ ounces gold) and you are getting the value of Spain for free. The model of the Ghana project looks so similar to the early days Chirano and Bibiani that Kinross cut a cheque in the last $11M financing at $0.80 to control 12.5% fully diluted interest in the Company. (Yes – stock now trading below $0.50)

Here are a few more details on the projects:

The Corcesto Project in Spain is 100% owned by Edgewater Exploration; it has a NI 43-101 compliant resource of 1.5 million ounces @ 1.74 g/t Au (M&I+I) Further details found here

Studies are currently underway to demonstrate how this project will be mined, it is anticipated the project will be amenable to both open pit and underground methods. Edgewater currently holds a small-scale mining license yet the company has begun the permitting process for a larger scale mining operation as the gold deposit has grown and continues to grow since the last exploitation permit was granted. The Corcesto Project has 7 major veins running through it and with some more drilling I can see Edgewater further increasing the economically viable ounces of gold. Edgewater currently has three drill rigs turning on this project now.

Edgewater has been working on a Preliminary Economic Assessment on the Corcoesto Gold Project.  Results from the study are anticipated during Q4, 2011.

Once again this is currently being value at $15 per ounce enterprise value so investors would be getting the Enchi gold project in Ghana for free.

The Enchi Project is just south west of the producing Chirano and Bibiani mines, Ghana West Africa, elephant country. And it is looking like both of those highly profitable deposits in its infancy.

I urge you to review the power point presentation as it contains much more detailed geological review.  But below is a map that shows the proximity to the producing mines.

Enchi remains on strike, on the same shear zone, and multiple zones have replicated early days drilling to the highly profitable gold producing Bibiani and Chirano mines. The company currently has three drills turning on the project so exploration news flow should be continuous

Shouldn’t this play be worth the $20M enterprise value in the stock alone right now?

Please contact Ryan King, VP of Corporate Development for further details of the company. He is very approachable, factual and won’t feed you with the typical over-hype you get from most junior mining executives.

Contact

Ryan King

604-628-1010

www.edgewaterx.com

Unity Is Spinning Outta Control!!!

Unity Energy Corp  UTY.V

SP: $0.35
S/O: 21.26 Million
Market Cap: $7.4 Million

http://unityenergycorp.com/

Initiating coverage @ $0.35
Rated: Strong Buy
Discourse: Ownership of Stock

Has there ever been a more perfect time to invest in uranium? For those that missed the initial uranium rally earlier this year before Fukushima there is a “second chance” Unity Energy is aggressively developing there properties. This 7 million dollar company has the potential to be the next big developer in the Athabasca Basin. 

They are also spinning out a key gold asset in northern Saskatchewan. Never has there been a better time to buy uranium stocks and Unity in particular. In the words of their commander in chief  “Positive results indicated at Dickens Lake justify this gold asset creating its own market and raising funds for further exploration and to add shareholder value. Unity Energy's roots shall remain grounded in energy through exploration of its significant portfolio of prospective uranium properties in the Athabasca Basin." - Anita Algie President and CEO Unity Energy.

Uranium is going to get hotter than Fukushima  

The longer term fundamentals of the sector remain solid and many countries have publically stated their strong continued commitment to nuclear energy.

 
The uranium spot price looks like it is just about to break out again, the current price is $54 a pound, a far cry from this years high of $75.00, so if you missed round one on the uranium breakout this is the “second chance” we all hope for but never seem to get.
 
The power hungry citizens of China and India don’t care where the energy comes from they just want it, China has 25 nuclear reactors under construction and India is the cutting edge leader in developing Thorium based reactors, With oil once again rocketing Uranium stocks have never looked so cheap. 

 
Recently I have started to notice consolidation in the uranium sector, Bannerman Resources (BAN:TSX) recently has had a offer from a Chinese uranium company to buy them out.

 
Investors have realized that modern nuclear technology is safe and reliable, the mishaps that happened in Japan are all due to mismanagement and there poor safety record, At a meeting of the G8's Nuclear Safety and Security Group, held in Tokyo in 2008, an IAEA expert warned that a strong earthquake with a magnitude above 7.0 could pose a "serious problem" for Japan's nuclear power stations, In March 2006 the Japanese government opposed a court order to close a nuclear plant in the west part of the country over doubts about its ability to withstand an earthquake. Japan's Nuclear and Industrial Safety Agency believed it was "safe" and that "all safety analyses were appropriately conducted"
 
I believe that Unity Energy will eventually become a household name such as Hathor or Fission with the same or more potential.
 
Are you in it for the Green or the Gold?
 

Unity has the perfect combination! Uranium and Gold, I believe they both hedge each other out perfectly! Unity recently decided to spin out there Northern Saskatchewan gold project, into a new venture called Patrone Gold. I believe this is a great decision, the company is not getting any value for the gold properties, the recent spin out of Prophecy is a great example of a successful spin out, (NKL:TSX). Everyone knows about the uranium projects, but the golden question is who knows about Unity’s GOLD PROJECT IN LA RONGE GOLD BELT? Unity completed a VTEM survey of the Dickens Lake Project and final results and interpretation are expected in the near term This gold district has produced 600,000 oz in the past, The Dickens Lake Gold Project is getting NO value right now with current valuations,expect the stock to rocket when it starts trading.

Time to pick your favorite lake.
Waterbury Lake? McKenzie Lake? Close Lake? Lampin Lake? Thorburn Lake?  Hoppy Lake?  Kirkpatricks Lake?  Dickens Lake?

At least if the uranium mining business collapses Unity shareholders could profit from luxury lakeside condos!

The lake that interests me the most is Thorburn, the property is surrounded by Cameco claims and it is very close to Hathor’s Roughrider Zone. Surrounding companies have drilled with tons of success, uranium has been found in percentages as high as 10% over 9 meters in surrounding areas. Preliminary ore reserve calculations indicate that the project contains approximately 5 million pounds of uranium as a area is defined expect this number to rocket. The Thorburn property is 14.5km south east of the world's largest and highest grade uranium mine,Cameco’s Cigar Lake mine.

Surrounding Drillholes of Interest:

• 4m at 3.5% U
• 44.50m at 2.0% U
• 9.90m at 10% U
• 10.40m at 7.0% U

As you can see these grades are VERY high clearly there is mineralization running through the property. The geology is very similar to the large uranium deposits that are found in the Athabasca basin. 
 
Athabasca Basin 101
So investors unfamiliar to uranium are probably wondering what the hell is the Athabasca Basin? Why should I care about this Basin? Where is it? 
 
The Athabasca Basin is in northern Saskatchewan, it is 100,000 km squared. The Athabasca Basin accounts for 30% of the world's uranium production. The area currently hosts reserves upwards of 650 million pounds of uranium. 
 
The Athabasca Basin is host to unconformity-associated type Uranium deposits. Mineralization occurs at, above or below the unconformity. This area is largely controlled by AREVA and Cameco, although currently there are 20 or so Juniors drilling and outlining deposits. Unity has key properties in all the right places, they are a area play to Fission and Hathor, they are also conveniently located near Cigar Lake. Cameco as a large scale producer will only buy out the largest deposits, companies like Hathor and Fission need to increase their deposits sizes and land holdings in order to catch the attention of Cameco and AVERA.

Infrastructure points of outlining a uranium deposit in the Athabasca Basin

• Ample power supply nearby
• Easy access to mine site from road
• The Athabasca Basin is the hub for all uranium core sample testing
• Abundant water supply
• A workforce that is highly experienced in developing uranium deposits

 

Anita’s Running A Tight Ship 

When I first got involved with Unity, the key reason that got me interested was the share structure, this company has a tight float with only 21,142,000 shares outstanding and a market cap of around 7 million dollars this thing can move really hard and when  there are any indications of serious mineralization this stock can easily go up 10x and still have a market cap lower than Fission and Hathor. Another key point I would like to put out is that  49 North (FNR:TSX) owns 2,490,000 shares or almost 12% of the float. 49 North is a Saskatchewan based resource company, when it comes to knowing the right plays in Saskatchewan I would trust them to know what is best in there own back yard.

 
Another point I would like to mention is that Unity has never done any dilutive financings, all financings have been higher than the previous financings or the same, the company recently did a PP that just came free trading which shows in the stock because the recent financing was almost 18% of the float.

The golden time to buy gold!

Never in my years of investing in commodity stocks have I seen gold stocks trade at such low valuations.
Producers are trading at there lowest price per earnings!  Why? People are doubting this gold rally! Gold is not in a bubble, gold will be in a bubble when gold stocks are trading 30-40x earnings; When everybody and there grandmother is filling there portfolios and pockets with gold shares then I will be the first to say that we are in a bubble, and trust me gold will one day be a bubble. Legitimate deposits are trading at 60-100 dollars a oz. something has to give!
We are going to hit 1700 dollar gold this year mark it on your calender, the catalysts behind it will be Qe3, the gold rally in September, Investors rushing into gold as a safe haven from depreciating currencies, inflation, debt downgrades... The list is ENDLESS.
Now that I have gotten rid of the preface of this article lets get into the goods, here are the stocks that I think will outperform the markets, and unlike other bloggers  that like to PUSH stocks I will give you my 2 cents on why  I think they will outperform. The stocks mentioned below will be split into three asset classes; explorers for the dare devils advanced exploration for the gamblers and producers for the risk adverse!

Explorers: 



1) ROG.V   Rox Gold


Shares Outstanding: 49 Million
Cash: 6.5 Million
Market Cap: 20.85 Million
Most Recent Stock Price: .55  


The main project Rox Gold has is the Yaramoko project in Burkina Faso, they optioned this from riverstone resources. The company has had great success in there drill program highlights include 6 meters of 24.62 GPT, 62 meters of .62 GPT, 12m of 5.6GPT and 20m of 2.20GPT.
The company is planning on another aggressive drill program that will consist of 5000m, the company is cashed up, management seems to be top notch. They are also in a very hot gold district. I expect phase 2 drill results to be in line with phase one drill results. The geology seems like the project is of significant size.
This is a high risk high reward stock, if drill results are inline with phase one drill results expect the stock to rocket, a PP was done at .75 cents recently so you are getting in at a lower price than the big boys.



2) RPM. V   Rye Patch Gold

Shares Outstanding: 142 Million

Cash: 9 Million

Market Cap: 48.2 Million

Most Recent Stock Price: .34

Rye patch has a excellent management team, together the management has found 80 million oz of gold, seems like to me that these guys are magnetically attracted to gold! The company has 3.1 Million oz of gold outlined and 40 million oz of silver. They have a LARGE land position and they are located in mining friendly Nevada. Management puts this company in the best words, they are a supermarket for large mining companies, RPM does not have the desire or plans to become a producing miner, they want to sell or spin out properties. There goal is to become a 10 million oz junior and they are well on the way with a limited drill program they have been having great success.
The key project for RPM is the 100% owned Wilco project but they also have another 3 great projects. Insiders own 8 % of this puppy while Kinross owns 15% and a few us funds own 35% of it.


Advanced Exploration: 


1) NES.V   Newstrike Capital

Shares Outstanding: 111 Million

Cash: 20 Million

Market Cap: 260 Million

Most Recent Stock Price: $2.50

Newstrike Capital is a gold exploration company based out of Vancouver with there main project being in mexico.
There main project the Ana Paula project was bought from Goldcorp in 2010, Goldcorp has done a lot of work with the project, lots of early exploratory drilling. The company has a large portfolio of properties. Luckas Lundin is also a significant shareholder in the company.
The drill results this company has put out this year are the creme of the crop, the best drill holes I have seen all year, highlights include 190M of 3.52 GPT and 116m of 4.71 GPT and 112M of 2.51 GPT
The company already has a project that I think is mineable all the projects in this district are well over 3 million oz, significant players in the region are Goldcorp and Torex gold. This Jr is on its way to being a producer in a few years!

2) GCU.V  Gold Canyon Resources

Shares Outstanding: 96 Million

Cash: ( I could not find the exact number but I am saying ~ 14 Million)

Market Cap: 230 Million

Most Recent Stock Price: $2.43

Gold canyon has a very very interesting management team, the company spends all there dollars on drilling. I have never seen a exploration company spend LESS on promotion; This isn't a bad thing trust me, if all junior miners played the way Gold Canyon did the venture exchange would be a great place to invest. I think they are trying to drill out a 10 million oz deposit and then there ultimate goal is to sell it. They have quite a few other projects that they want to dip there hands in once they have ample cash.
The downside to this is that the company isnt fairly valued at these prices at ALL. The company is trading at around 60 dollars a oz! In Canada!! The worlds safest mining district!
The company recently did a PP, they are fully cashed for the foreseeable future. There main project is the spring pole lake project. highlights include 28.5m @ 19.75g/t au within 100.5m @ 7.23g/t au and 4.5m @ 36.21 g/t au within 111m @ 2.03g/t au,  30m @ 5.69g/t au within 50m @ 2.56g/t au.
These are monster drill results for a monster company, right now I am sure GCU wants to get the grades up and bring the tonnage alot higher. I can see GCU north of 12 dollars within a year if gold keeps up the pace and if the boys at Gold Canyon keep getting lucky!


Producers: 


1) GBG.TO Great Basin Gold

Shares Outstanding: 453 Million

Cash: 68 Million

Market Cap: 1.1 Billion

Most Recent Stock Price: $2.05

Great Basin Gold, the producer that trades at the valuations of a driller. GBG has 453 million shares outstanding, yes it is high but there are also two producing mines backing up this baby. 
Great basin Gold is a mid tier producer that is focused on becoming a large producer. The company is slated to produce 330,000 oz a year in 2012 with a average cash cost of about $500.
The Company has 13.6 Million oz in the measured and indicated category, these guys have gold and TONS of it.
Great Basin also has tons of exploration potential, but I am buying this because a senior will snap this company up soon, its just a matter of when. With Burnstone and Holister in production this will be a cash cow. I know this company isn't as exciting as the latest gold play in the Congo but expect this to be a ten bagger in a few years, that is if they can get the poison pill in place.
Shorters be warned....


2) BGM.V   Bakerville Gold Mines


Shares Outstanding: 87 Million

Cash: 12 Million as of November 2010

Market Cap: 135 Million 

Most Recent Stock Price: $1.70

The little gold company that could! The best way to describe Bakerville, the company is slated to produce 40,000 Oz of gold this year, tiny I know but when you compare it to the market cap of this lil company you realize how undervalued this thing really is. This year they will prodce 62 million dollars worth of gold at a average cost of 1550 a oz.

The company has been very careful about selling the gold in strategic times, and they are also not growing "too fast" thereby avoiding dilution. A resource update on Bonanza ledge is pending. The company has a few good projects in the pipelines, I can seem them producing 250,000 Oz a year in 2013. Lots of growth and the exploration potential is massive, they are permitted to drill 300,000m in one project alone. This is great potential and usually unheard of. 

Well that was alot of writing, I am sure it was a chore to read but now you have the greatest gold companies in your hands, be very careful with what you do with this POWERFUL information. Please rate my blog a 5 on stock house and make sure you guys subscribe! I will be posting great articles and my thoughts on the market on a weekly basis.


Thanks for reading!