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Small-Cap Miner Benefits from Rival’s Gold Find
By: AllPennyStocks.com News
September 2, 2010
The charmed life the gold industry seems to be enjoying -- while the rest of the economic world is wringing its hands with suspense – continued into September with the news that yet another junior miner, in concert with a competitor, has hit upon yet another rich gold deposit.
Based in Rouyn-Noranda, Quebec, the hub of the gold industry in Canada, Richmont Mines Inc. (AMEX:RIC), has shown itself to be one of the major players throughout North America. RIC’s 20-plus-year track record of bringing early-stage gold exploration projects to their full developmental potential and, once in operation, cost-effectively managing underground narrow vein gold mines, has earned it a reputation as a reliable and well-managed gold mine operator.
On September 2, it was announced that competitor Mountain Lake Resources Inc. (Pink Sheets:MLKRF), reported encouraging initial results from barge drilling over the Leprechaun Gold Deposit, 55 kilometres south of Buchans, in central Newfoundland. One drill hole in the property’s main zone returned 2.38 grams per tonne (g/t) gold (Au) over a true width of 38 metres (about 120 feet). Latest analytical results from Leprechaun show mineralization ranging as high as 9.51 g/t Au.
In all, some 9,800 metres of drilling have been completed to date this year. Leprechaun is the first defined gold resource within the highly prospective Valentine Lake Property.
MLKRF currently holds a 30% interest in Valentine, with an eye to buying the remaining 70% interest from RIC, a stake RIC has held since the fall of 2007. It was in the winter of 2009 that RIC granted MLKRF the option to re-purchase the remaining 70% interest in the property, for about $650,000 Canadian, or about 26 cents Canadian per share. MLRKF then would have five years to exercise that option. Meantime, RIC maintains it will benefit from any future success on this property as one of MLKRF's largest shareholders.
Other projects of which RIC is mostly in charge (not merely bankrolling) include the Wasamac property, which this week reported eight drill holes completed, seven of which intercepted mineralized zones of more than eight metres true width. Mineralization on Wasamac ranged up to 6.46 g/t.
In August, RIC posted truly exciting second-quarter numbers; revenue came in at $20.7 million Canadian, a notable 32% year-over-year improvement over the $15.7 million Canadian of revenue generated in the second quarter of 2009, driven by an 18% increase in the number of gold ounces sold to more than 15,000.
The company’s 52-week stock range temporarily took it outside the boundaries of what would be considered “penny stock”; it craned as high as $5.25 in early January, having dipped to a depth of $2.65 a share last October. The news of MLKRF’s find on RIC’s property gave the price a small kick to $4.59 a share at time of publishing. Those looking for more gold exposure should consider the results RIC has produced in recent months, and consider its stock in their portfolios.
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