Casey Investment Alert #292: More Mexican Metals
April 11, 2008, by Mr. Louis James
On this trip, I took a close look at the projects of four different junior companies. Two aren't of interest at this time, and one requires more due diligence before bringing it to your attention. But I did want to give you a quick heads up on the one that caught my eye as having the sort of upside potential we are constantly on the lookout for.
Nayarit Gold (V.NYG) looks like it might be on the cusp of discovering something important. They have a district-scale land package that, so far, appears to contain at least one high-grade shoot of substantial thickness. The new management team comes across as well organized and is visibly getting the job done. The prior team had trouble gaining traction, which explains the negative slope of the stock chart, so hard-charging new management is an important development.
I also found the technical people to be competent and very knowledgeable. Best of all, they have the full attention of an experienced drill crew (having just bought two new rigs for them) and a drill plan to put their mineral hypotheses to the test this year. The amount of paper out is not ideal, but we've certainly seen a lot worse. I'd be tempted to call it a great speculative buy, except that they want to spend C$3.5 million to C$5.0 million on exploration this year (a good thing), but only have C$1.5 million in the bank (not a good thing). So, my thinking is to watch like a Mexican vulture for a private placement, and if the terms are at all appealing, try to get a seat at the table. A good price and full warrant for two years would open my wallet. We'll keep our ears to the ground for news of a possible financing, but it won't hurt for you to contact the company directly and let them know you are interested in participating in any new financings they might do.
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