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American Company Spotlight

 

Dhanoa Minerals Ltd. Website: Click Here

Information As Of May 25, 2007

Exchange: OTC:BB Market Cap: 41 Million
Outstanding Shares: 41 Million 52 Low / High: $0.51 / $3.60

Price May 25, 2007: $1.00

DHNA Recent Stock Quote and News: Click Here

“Even if Gold remains flat, Dhanoa Minerals is confident in projecting $40 Million pre-tax revenue per year (100,000 ounces at $680). They offer a tremendous upside and are worthy of a buy.” Mike King, Director - Princeton Research Inc.


Overview

Dhanoa is a production stage company formed for the purpose of acquiring, exploring, and developing natural resource properties. Activities during the production and exploration stage include further development of the Company's business plan and raising capital. The Company has recently initiated a new program to evaluate undervalued assets for potential addition to its mineral claim portfolio.


Investment Highlights

  • The company's three mines sit on the western end of the Ecuadorian metallurgical gold belt, which holds over 10 million ounces of gold.
  • Confirmed independent random sample testing of the company's three gold-producing mines show potential yields above the industry standard.
  • The acquisition of the Paraiso producing gold mine shows significant upside exploration potential. Currently the mine has existing production of approximately 2,000 ozs of gold monthly. Dhanoa will be implementing plans to increase gold production to 15,000 ozs per month in 2007 by upgrading the current facilities and technology.
  • Princeton Research, Inc. sets Dhanoa price target at $4 within the next 3 months.
  • Planned listing on AMEX and secondary IPO on Toronto Stock Exchange to increase visibility and expand investor access.
  • Modernization project includes increased labor force, underground expansion , open pit development, new processing plant.
  • Acquisition of new processing plant projected to increase efficiency from 50% to 90% recovery rate.
  • Projected production levels: 100,000 ounces of gold for the first year of production and 250,000 by year two.
  • Installation of satellite cameras increase mine security and provide streaming video on the company website.
  • Over the last six months, Dhanoa has raised $5 million for daily operations and upgrades for its mines.
  • Geology in Ecuador is world class and hosts similar mineralization as its neighbours Columbia and Peru, which host significant mines and mining districts.
  • All three mines from the Bella Rica Property are situated in the western end of the Ecuadorian metallurgical gold belt. From past production and actual reserves, the region is projected to host over 100 million ounces of gold.


Dhanoa’s Current Operations

Dhanoa’s Bella Rica project consists of three mines in Southwest Ecuador, with a current production cost of $280.00 per ounce. These mines currently operate at a cost of $280.00 per ounce and are producing enough to reach 100,000 ounces of high grade gold in 2007. With gold at $680.00 per ounce, this equates to $40 million dollars in revenue for Dhanoa.

Dhanoa’s Property Study Results

Dhanoa’s Bonanza properties were most recently part of a study performed by independent geologist Larry Sostad, an expert in geophysics, mining exploration, geology, and geochemistry. The random samples were taken using the various tunnels at the company’s three gold producing mines in southern Ecuador and then sent to an Assayers laboratory in Canada where they were certified. Of these, the following three were the most encouraging:

  • A2709-2 238.20 Au g/tonne
  • A2712-1 24.50 Au g/tonne 300.30 Ag g/tonne
  • A2712 78.20 Au g/tonne 144.00 Ag g/tonne

The industry standard is approximately 20 g/ton. Reserve estimates, resource samples and estimates are not Ni 43-101 certified.


Ecuador

Southern Ecuador has rapidly become an attractive choice for mineral exploration/development companies. Permissive geology in unexplored or under explored areas, a stable mining code, an opportunistic labour pool, no restrictions on capital flows, and relatively good infrastructure has led to the recent interest in the country.

Compounding the new exploration interest in Ecuador is a series of discovery/ development projects that have potential to be world class. The most recent find is Aurelian’s Fruta Del Norte epithermal gold discovery in southeastern Ecuador. With less than 20 drill holes in the discovery area ARU market cap is already at C$600 million.

This suggests to us the market believes ARU is on to a 5-6 million oz target (using US$100/oz Au). Corriente’s Mirador Copper (Cu)-Gold (Au) project is 14km north of Aurelian’s new discovery and based on current development plans could be operating by 2008, and within 18 months of start up producing about 250 million lbs of Cu/yr. In south central Ecuador, IAMGOLD is developing its Quimsacocha high sulphidation Au project. The company has outlined thus far a 2.8 million ounce gold resource. The resource is open as evidenced by step out drilling along strike and we expect an updated resource calculation this fall. Preliminary mine plans suggest that an open pit operation could produce about 230,000 ounces of Au per year.


Bella Rica Property

Dhanoa's Bella Rica mine package hosts over 85,000 ounces of gold and consists of the Bonanza, Gunanza and Mollopongo Mines. All three mines are situated in the western end of the Ecuadorian metallurgical gold belt. From past production and actual reserves, the region is projected to host over 100 million ounces of gold.

A resource extraction estimate for three mines project first year production (ending June 2008) at around 100,000 ounces of gold, generating revenues of around $40 million, with production costs at $280 per ounce. By the second year, production is projected to reach 250,000 ounces of gold per year. Even if gold remains at its current value , the company is confident that it will generate gross revenue totaling $170 million each year after year two of production. By the third year, Dhanoa projects that its properties will produce 300,000 ounces of gold per year, resulting in revenues and profits of $204 million and $120 million, respectively.

In January 2007, Dhanoa entered into a purchase agreement to acquire 80% of the ownership and capital of Promenasa, S.A., an Ecuador mining company for $2,400,000 and $5,000,000 shares of the restricted common stock at a deemed price of not less than $3.00 per share. Dhanoa also agree to loan $7,300,000 to Promenasa during a six month period after the closing. This infusion of $7.3 million will be invested into mine upgrades and operations to bring the mines up to a profitable production capacity.


Paraise Property

Paraiso is located in the sector Paradise, Pueblo Nuevo of the Canton Camilo Ponce Enriquez, County of the Azuay. The property is approximately 150 km south of Guayaquil, which has an international airport and seaport and 52 km from the city of Machala and Port Bolivar.

Currently the mine has existing production of approximately 2,000 ozs of gold monthly. Dhanoa will be implementing plans to increase gold production to 15,000 ozs per month in 2007 by upgrading the current facilities and technology.

The Paraiso mine has been worked for the last 25 years and past production is estimated at 128,000 oz. of gold. The mine has 7 principal veins, with the focus of current activity on 2 of those veins. Reserves have been estimated recently at approximately 2.5 million ozs of gold.

Located in Southern Ecuador, where exploration activities have recently generated world class discoveries, such as Aurelian Resources Inc. 189m @ 24g/t gold and 135m @ 9.78g/t gold at its Fruta del Norte Project. This is one of the biggest discoveries made in the last decade, which could contain more than 11 million ozs of gold.

Geology in Ecuador is world class and hosts similar mineralization as its neighbours Columbia and Peru, which host significant mines and mining districts.

Ecuador has been previously under explored and developed, political and economic advancement in Ecuador have provided excellent opportunities for junior mining companies. Good mining laws, access to labor and good infrastructures makes Ecuador an excellent choice for exploration and development.


Growth Strategy

Dhanoa Minerals LTD is on schedule to complete its acquisition of an 80% interest in three gold mining operations in Southern Ecuador, referred to as the Bella Rica project. The Guanache Mine is the lowest in elevation, the Mollopongo Mine is at the top of the mountain, while the Bonanza Mine is in between. The vertical extent is a little more than 1000 feet, and the continuity of the gold vein systems run horizontal as well as vertical. It has become very clear that Dhanoa has established itself on favorable ground for extraordinary expansion and development.

Part of Dhanoa’s growth strategy is to undertake underground expansion, open pit development, and creating a centralized modern treatment plant for the production of gold and silver. Dhanoa anticipates the Bonanza mine to reach a rate of 100,000 ounces of gold through the next 12 months and then building to 300,000 ounces annually, as indicated by increasing production levels already being achieved. The goal is to produce 12 gr. per ton average in high grade gold.

Dhanoa wants to continue to pursue new exploration interests using revenues (projected at $ 40 MM for 2007) for acquisitions and facility upgrades or installations. All the properties, and most formidably the Bonanza mine, are also located in an area where Dhanoa is strategically positioned within an emerging gold arena of international stature.

They are actively employing state-of-the-art concepts for production and security. In mines such as these, where grades are high and the gold grains are visible, losses may exceed 15%. By the end of June, they will be installing cameras for 24X7 monitoring of their gold processing. Their intent is to make the live camera feed available on-line through their website as a means of providing security and enabling shareholders to view the extent of the operations up close.

Dhanoa’s Modernization of Operations

It’s expected that modernization will cost about $5 million and be complete by the end of 2007. This upgrade process is expected to increase production by 3x, meaning an increase of revenue from these properties to roughly $120 million or 300,000 ounces by 2010.

Dhanoa’s Acquisitions

Expert evaluation from industry and regional professionals are ongoing on properties that can contribute long term quality production and revenue. Working with the benefits of shareholders in mind, and cash obligations complete, financing of such activities may be accomplished based on revenue generated cash and stock.


Recent News and Press Releases

Dhanoa Minerals Projects Annual Revenues of $170 million by Second Year of Production (Fri, May 25)

Dhanoa Minerals Hires New Chief Financial Officer (Fri, May 25)

Dhanoa Minerals Hires New President (Fri, May 25)

Dhanoa Appoints Daniel Kuhn as Consultant to the Company (Wed, May 9)

Dhanoa Minerals Announces Installation of Cameras (Tue, Apr 10)

Dhanoa Announces Production Plans (Thu, Apr 5)

Dhanoa Minerals Arranges U.S. $1.3 Million Financing at $1.90 per Share (Wed, Apr 4)

Dhanoa Minerals Successfully Fullfilling Financial and Operational Obligations (Tue, Apr 3)


Management

Lee Andrew Balak - President

Daniel Kuln - Chief Operations Officer

William McNerney - Chief Financial Officer

Michael A. Dehn - Director

Contacts

Dhanoa Minerals Ltd.
1330 Martin Grove Road
Toronto, Ontario M9W 4X4
Phone: (416) 838-4348
Email: info@dhanoaminerals.com
Website: http://www.dhanoaminerals.com/


FORWARD LOOKING STATEMENTS

This report includes forward-looking statements that reflect Dhanoa Minerals Ltd. current expectations about its future results, performance, prospects and opportunities. Dhanoa Minerals Ltd. has tried to identify these forward-looking statements by using words and phrases such as "may," "will," "expects," "anticipates," "believes," "intends," "estimates," "plan," "should," "typical," "preliminary," "we are confident" or similar expressions. These forward-looking statements are based on information currently available and are subject to a number of risks, uncertainties and other factors that could cause Dhanoa Minerals Ltd.'s actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks, uncertainties and other factors include, without limitation, the Company's growth expectations and ongoing funding requirements, and specifically, the Company's growth prospects with scalable customers, and those outlined above. Other risks include the Company's limited operating history, the Company's history of operating losses, consumers' acceptance, the Company's use of licensed technologies, risk of increased competition, the potential need for additional financing, the terms and conditions of any financing that is consummated, the limited trading market for the Company's securities, the possible volatility of the Company's stock price, the concentration of ownership, and the potential fluctuation in the Company's operating results.


Disclaimer

AllPennyStocks.com feature stock reports are intended to be stock ideas, NOT recommendations. Please do your own research before investing. It is crucial that you at least look at current SEC filings and read the latest press releases. Information contained in this report was extracted from current documents filed with the SEC, the company web site and other publicly available sources deemed reliable. For more information see our disclaimer section, a link of which can be found on our web site. This document contains forward-looking statements, particularly as related to the business plans of the Company, within the meaning of Section 27A of the Securities Act of 1933 and Sections 21E of the Securities Exchange Act of 1934, and are subject to the safe harbor created by these sections. Actual results may differ materially from the Company's expectations and estimates. This is an advertisement for Dhanoa Minerals Ltd. The purpose of this advertisement, like any advertising, is to provide coverage and awareness for the company. The information provided in this advertisement is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use would be contrary to law or regulation or which would subject us to any registration requirement within such jurisdiction or country.

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