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Aiming to shine yet again: UC
Resources (TSX Venture:UC) by Glenn
Wilkins - AllPennyStocks.com News Reporter
January 17, 2007 (AllPennyStocks.com Media, Inc.) - As all
roads once led to Rome, more thousands of pairs of eyes and
more thousands of shovels are setting their sights on Mexico
as the place to strike it rich. The youngest of the NAFTA
trade partners remains the world's largest silver producer,
and industry experts remain bullish on both gold and silver,
which are hitting new historical highs. Investors who have
gotten in early with other emerging Mexican silver and gold
producers have been handsomely rewarded with significant stock
appreciation.
Where it's at for UC
(TSX Venture:UC) these days is the Northwest corner of the
Durango province of central Mexico, home to the
150,000-hectare Copalquin gold and silver project, a region
which allegedly has parted with thousands of ounces in gold,
millions of ounces of silver, supposedly with lots more to
spare.
UC commenced drilling in Copalquin last spring, recently
re-commenced phase three of its exploration project. Results
released from the program in July were staggering; over a true
width of 5.2 meters the company encountered 1.5 ounces/tonne
of Gold and 50 ounces/ tonne of Silver. UC is now drilling at
this site, and is attempting to prove up a very nice size
resource to mine. Due to the nature of these results, the
company decided to expand its land holdings to 150,000
hectares, making it one of the largest holdings in Mexico.
Geochemical values are higher this time out than in previous
years in Cometa where preliminary drilling in 1998 and 2004 by
other operators intersected "bonanza" grade as well as wide
intervals of lower grade gold and silver mineralization -
promising news indeed for the company. This means that UC now
has a high grade prospect and a significant low-grade open pit
style deposit
In December, UC got cracking on silver and gold production of
its 600-hectare mining property in La Yesca, in Mexico's
Nayarit state, and announced "significant progress" with the
work, which UC Resources declared "on schedule and under
budget." Modifications have been made to the production
process, the company says the property will have an estimated
80% recovery rate for both gold and silver (historic recovery
rates are about 80% for gold and 50% for silver). Sources say
that this deposit could be twice the identified size and could
be in production at a rate of 200tpd (tonnes per day) for more
than seven years, generating significant cash flow. La Yesca
is the first UC production asset and cash flow is expected to
commence in a matter of weeks.
Last August, the company signed a Letter of Intent to buy 90%
of the outstanding shares of the Mexican company El Alizal,
thus adding to UC's Copalquin holdings. At the time, El Alizal
owned the La Dura mining project located in Copalquin. The
company plans to commit $2,000,000 in exploration work over
the next five years (all amounts in U.S. dollars unless
specified otherwise). The project comes along with a 60 tpd
flotation plant, which is upgradeable to 150 tpd, the mill is
also in close proximity to the Copalquin project. One goal for
this year is for UC to close El Alizal and bring into
production its La Dura Production Mill and conduct Phase 1
exploration.
The company in total has three mills and fully upgraded are
capable of 700 tpd, and there are reportedly plans for the
100-tpd portable mill to be mobilized in the very near future.
All in all, this attractive junior is set to have three
projects in production by the summer of 2007. Leveraged
exploration and cash flow are the objective at UC Resources.
The company has also fixed a lofty goal for this year: to be
self-funding through cash flow from imminent production...
with no debt on the books.
The makeup of the board of directors at UC has also changed
since AllPennyStocks.com readers last looked in during May of
last year; Neil Novak came on board in October as vice
president of exploration, along with Hamish Malkin, who became
Chief Financial Officer. Bruno Weiss, whose background has
been primarily banking, also joined the board.
In particular, Novak's experience has included piloting
multinational exploration programs with annual budgets of $15
million. He is also the president and CEO of Spider Resources.
The lavish cash outlay bestowed upon UC's latest projects has
made its presence felt in its bottom line. The latest period
for which financial information is available is the quarter
ending in September 2006 (the first quarter of its fiscal
year), at which time the company found itself running a
deficit of nearly $11 million Canadian, or about 2.3 cents
Canadian per share. The figure knocked the share price down
from a 52-week high of 80 cents shortly after Labour Day, to a
range in the 35- to 40-cent range (a 52-week gully was
experienced at 12 cents in mid-January).
The company is avidly looking forward to 2007. UC's stock
is a high-volume one with over 120 million-plus shares
changing hands in 2006. What's more, the merger and
acquisition climate is active and the forecast is bullish for
the precious metals sector, and for Mexico as a country for
mining investment. All of this bodes well for current and
potential UC investors, given its solid management team and
recent record of achievements in the mining field.
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