Western Prospector WNP.V
The basic facts: 23.5 million shares outstanding, 29 million shares fully diluted. On a fully diluted basis, management holds 17% and funds or institutions 30%.
Assets: C$6 million working capital.
Carried exploration interests: C$7.5 million.
Liabilities: no long term debt
Market cap: C$31 million.
Key personnel: John Brock, CEO. Mr. Brock has 40 years experience including work for Dynasty Exploration at the time of their Faro mine discovery in the Yukon, and for Welcome North at the time of their Marigold find in Nevada. He's also served as a governor of the Vancouver Stock Exchange and the Canadian Venture Exchange. We did not meet Mr. Brock in New Orleans, nor did we attend his presentation on geothermal power.
Wayne Roberts, P. Geo., VP Exploration. Mr. Roberts has 36 years experience in mineral exploration. He directed exploration for Northern Crown in Mexico and Welcome North in Nevada, as well as American Bullion in "British" Columbia and Columbia Gold in the Yukon. He participated in the discovery of the Marigold find in Nevada and the Cirque zinc deposit in "British" Columbia.
R. E. Gordon Davis, P. Eng., Director. Mr. Davis is from Dynasty Explorations (later Cyprus Anvil Mining) where he served as a director from 1964-82. He's also been a director for Pine Point Mines, Cabre Exploration, Golden Knight Resources, Silver Standard Resources, and the creatively named Canplats Resource Corp.
Kenneth de Graaf, P. Eng., VP Ops, Mongolia, Director. Mr. de Graaf has ten years experience working in Mongolia. He worked for Cascadia Mining, which at one point had 50 licenses covering 4.3 million hectares, made the Gatsuurt discovery, and sold Gatsuurt to Cameco Gold in 2001.
The Saddle Hills property is now 100,659 hectares in the Saddle Hills "uranium basin" in northeastern Mongolia. The Saddle Hills property includes the Gurvanbulag target, which reportedly contains 42 million pounds of U3O8 or uranium oxide. Various press releases may be seen on the company web site relating to this property and surveys confirming it prospective for much uranium.
Yalbag is 4,200 hectares in north central Mongolia straddling the southeast side of the Khenteii Graben. The property covers a portion of the bounding graben fault and subsidiary cross structures. The rocks host extensive rich, placer gold deposits and bedrock gold mineralization. Previous drilling intersected 5.2 meters with a cut (to 30 g/t gold) weighted average of 16.75 g/t gold. Approximately 70 klicks away is Cameco's Gatsuurt deposit. Western Prospector has an agreement with Brant Enterprises for 100% of the Yalbag property.
The Hulgar property consists of three contiguous licenses totaling 37,500 hectares or 375 square km. A state road and power line cross the property. Hulgar covers a widespread porphyry-style molybdenum-copper mineralization. It is in the eastern part of the Southern Mongolia porphyry belt - the same belt that hosts the large Oyu Tolgoi deposit being explored by Ivanhoe Mines. Western Prospector has an agreement with Brant for 100% of the Hulgar property.
The Ishgent property is 26,500 hectares. It has at least six geochemical anomalies prospective for gold, copper, zinc, bismuth, mercury, tin, and molybdenum. Again, Western Prospector has acquired 100% of the property.
The Lakemount property totals 3645 hectares covering precious metal and base metal occurrences as well as kimberlite. It is about ten klicks east of Wawa in northWestern Ontario. Optioned to PTM for 150,000 shares of PTM stock by 31 December 2008 and C$150K cash; PTM to perform $2.5 million in exploration and development; PTM to earn 51%. The property has been prospective for precious metals since 1928 when gold veins were uncovered that yielded samples grading three to ten grams per tonne (g/t). Copper-nickel mineralization was discovered in 1942, and by 1957 there were 146 drill holes partially defining the open-ended deposit along 800 meters length and 243 meters depth. The highlight hole was number 11, assaying 1.1% copper, half percent nickel, 4.2 g/t palladium, 1.5 g/t platinum over 17.4 meters. More recently, PTM has drilled 23 holes totalling 4,700 meters. We saw four results for Pt, Pd, and Au combined totals over 1 g/t, some 17 results showing over half a percent nickel, with the best results showing a meter of 2.5% nickel in one hole and 8 meters of 1.46 g/t Pt/Pd/Au in another. Two gold veins have been exposed over a length of 400 meters, with grab samples averaging 6.9 g/t gold, 4.9% copper, 6.7% zinc. One zone contains chip samples assaying 12 g/t gold over 3.1 meters. An additional ultramafic intrusive at Sunrise Lake, measures two kilometers by 600 meters, with additional platinum group prospects. Roscoe Postle Associates of Toronto have been retained to complete a resource estimate.
The Indian River property is 778 placer claims covering a twenty-one klick length of the Indian River drainage. It is in the Southern part of the Yukon's Klondike gold fields, which are historically productive. (Forty-two percent of the 2.1 million ounces produced from the Klondike fields have been in Indian River drainage; this particular property has already produced 225,000 ounces gold.) Two extensive white channel valley benches (upstream and down) with large-scale bulk tonnage potential remain to be mined. Initial sampling shows 1.3 g/t gold and an estimate of the two benches in hand suggests potential of 110 million tonnes. In other words, there is a potential for 4.6 million ounces gold. The downstream bench is also prospective for tin, titanium, and scandium metals. The downstream bench is Y-shaped, exposed over 15 kilometers, averaging one km wide.
Western Prospector has optioned the Indian River property to Boulder Mining
for C$300,000 cash, a million shares of BDR.V, a half million warrants priced at market at issuance, by 31 December 2007; BDR to incur C$5 million exploration expenditures in the same period. BDR is to earn 70% joint venture interest, subject to a 2% net smelter return to the underlying vendor.
Political risk: Western Prospector is exploring in Ontario (hardly "Western" Canada, but what's in a name?) and the Yukon, as well as in Mongolia. Both countries are stable politically, with strong gains by the freedom-oriented party in Mongolia suggesting a good climate there for mining exploration. The company is exploring and developing resources in gold, copper, molybdenum, nickel, and platinum group metals, which have low political risks. The company is also exploring and developing resources in uranium, which is less afflicted with political risk than it was twenty-five years ago when protestors were opposing nearly every nuclear project in north America or Western Europe.
As with our other suggestions, we feel that a net asset analysis shows this stock to be dramatically under priced. The cash, gold, and uranium underlying value for each share, fully diluted, comes to about $50.22/share. Although this stock was the eighth best price performer in 2004 on its exchange, it still seems to be dramatically undervalued.