I continue to wind down Grandich Publications and once our obligations to our clients end, we will no longer comment on them. As always, I urge you to ignore what most anonymous posters on Internet chat boards claim. I’ve made it clear on several occasions and in many interviews recently where my business and personal life is heading.
These are our remaining clients
In regards to Geologix Explorations, I “resigned” (was not terminated) over differences with CEO and will not comment on it further (and please don’t write or call as this will be my only comment on the matter). I still own approximately 5 million shares.
My engagement with Precipitate is ending but they are deserving of a final outlook from me
The Critical Ingredients to Survive and Thrive Through these Markets
Precipitate Gold Corp. (PRG.V)
With capital markets continuing to leave many investors uncertain about precious metals equities, the longer term rationale remains that these markets are cyclical and although this seems to be an unprecedented wait for the turnaround, at some point e the best of the bunch can rise and investors can be rewarded for not only having been patient, but for identifying the companies with the greatest potential to survive the current markets and position themselves to thrive in the future.
As anyone who reads my posts will know, in the high risk business of mineral exploration, where the odds of success are skinny at best, there is simply no overstating the importance of having qualified, experienced, and proven individuals at the helm. Precipitate Gold (PRG-V) stands out from the crowd boasting a well-balanced group of founders, directors, and officers who have been responsible for some of the industries’ most notable recent successes stories, both in terms of discoveries and buy-outs. In addition this management team, under the guidance of President & CEO Jeff Wilson has shown incredible prudence in streamlining the Company’s expenses and financial obligations, including restructuring of all underlying property option deals to eliminate any near term property payment obligations and preserve the Company’s treasury and share structure. This team understands what it takes to become lean and mean with the ability to operate successfully through difficult markets by preserving treasury, efficiently advancing projects, and identifying possible new acquisition opportunities at (what we all hope is) the bottom of the market.
Precipitate’s assets are located in highly prospective regions, with year-round access and infrastructure and are located in mining friendly jurisdictions – the Dominican Republic and Mexico.
The Company has positioned itself such that these assets are primed for discovery (about the only thing that seems to be exciting the junior markets these days). The prospects are all in good jurisdictions, good access and infrastructure (which means relatively inexpensive exploration costs to advance), and have limited option and holding costs which means the Company can keep the projects in good standing without onerous cash calls that might otherwise deplete their cash.
The Company’s flagship project is located adjacent to GoldQuests Romero discovery in the Dominican Republic. While GoldQuest was exciting the market with its world-class discovery results back in mid-2012, the principles behind Precipitate were working behind the scenes to acquire the Juan de Herrera and Hato Nuevo concession immediately adjacent to GoldQuest’s discovery project.
Location is one thing, but results are what this company really wants to be about. So after a first pass sampling and mapping program late last year, earlier this month Precipitate announced results from and initial grab sample program including assays of 6.3 g/t gold and 4.0 g/t gold. Most recently, Precipitate trumped those initial results with additional results assaying 11.8 g/t gold and 39 g/t silver, and 5.8 g/t gold and >100 g/t silver in a newly identified target area called Ginger Ridge.
In a very short timeframe from acquisition to initial results, Precipitate’s prospects are now displaying the type of grades and geology that can draw increased market attention as the Company looks to advance these projects to a drill stage in the coming months. Adding to the interest in this region, Precipitate’s neighbor, GoldQuest recently reported the completion of its first resource estimation with an indicated and inferred resource of 3.2M oz gold equivalent.
Management believes the Company is very close to receiving the drill permits and all-important final concession grant that would allow the Company to trench, complete a geophysical survey to identify the most prospective targets, and then drill the project in the coming months. The results of this near-term work could be the tipping point for Precipitate and its shareholders.
Potential (through Cash and Corporate Structure):
At last review, Precipitate should have just under $1.0M in working capital. With no property payment obligations or work commitments, the Company has full discretion on its spending (as opposed to facing looming and escalating property option payments required to maintain its assets and/or unnecessary overhead and operating costs). As such, depending on what expenditures and work programs the Company elects to do in the coming months, the Company’s current working capital should see it through at least the next 12 months without the need for an equity financing. This, of course means that the Company is not facing undesirable dilution to its existing shareholder base. That said, with only 28.0M shares issued and outstanding today, even if the Company sees an opportunity to raise money and deems it in the best interest, I would not expect the outcome to leave the Company with an unreasonable share structure, and it’s my expectation that, with some pending exploration success in the Dominican and/or Mexico, the next financing requirement might be on the back of some compelling new drill targets that could position the Company for a possible new discovery, which again, seems to be about the only thing that is exciting investors in this market.
Simultaneous, I am also aware that management is actively evaluating and reviewing an extensive number of prospective possible acquisitions that could be acquired under very favourable terms, given the distressed nature of the current conditions for many of PRG’s peers. Having the foresight and capital structure to acquire and hold good discounted opportunities now, could pay substantial dividends in the future.
Assuming capital markets, gold price, and the junior exploration space come back into favor within a reasonable time frame, companies like Precipitate Gold and their shareholders could be positioned to not only survive, but thrive as the markets turn.
I wish them well.
I will be a keynote speaker at the World Outlook Financial Conference January 31st-February 1st
To my Canadian readers who have heard me speak about an alternative to traditional financial planning and a gentleman named Paul Philip who’s an expert on this process and can assist Canadians, please note he shall be exhibiting at the conference.
Alderon Iron Ore and Excelsior Mining are also exhibitors.
I hope to see many of you there and as I always do, I will stay after the show to answer questions