There are some aspects of the mining business that simply make no sense. Chile is the largest producer of copper in the world, being home to 5 of the top 10 copper mines in the world. Now take a look at a map of South America or look at a globe. You will notice Argentina and Chile are right next to each other and run for a couple of thousand of miles parallel to the other in a north-south direction.
If Chile produces so much copper, how come Argentina doesn't? I asked that question of Roberto Lara, Managing Director for South American Projects for TNR Gold (TNR-V) on a recent trip to San Juan in Argentina. He laughed and explained that he really didn't know. Maybe it was because Argentina didn't need minerals, they grow so much food. His simple answer probably makes sense. Argentina hasn't mined much because they didn't need to.
That doesn't mean they don't have the goods. They do and I saw for myself a week ago at the TNR's El Salto property 130 kilometers west of San Juan.
First of all, let me tell you everything bad about TNR so you won't buy the stock.
If you go to their website, you will understand everything on it as long as you have your PHD in economic geology. It's written just for you. If, however, like me, you are a simple soul who doesn't speak an obscure version of Sanskrit only spoken by five others on earth, you are going to have problems.
I went to their Project section and looked under the subheading Argentina, since that's where I visited. I found 9 different projects, all listed by their Spanish names and meaning absolutely nothing to me or to you. I had to look at my notes to see where I visited. It was there and if I was simply looking for information about the project, I'd have to wade through 8 other projects to find it.
So on a scale of roughly 1 to 100, the site has zero comprehensibility. I don't have a clue as to what they are saying. It's all very interesting and technical. I don't know what business they are in or how they are doing or where they intend to be in a year. Those are all things I think an investor should know. Certainly I'd like to know.
That said, there are only two reasons for buying the stock. You can take your pick and chose between hole 1 and hole 2 or you can pick either El or Salto.
Roberto picked me up late in the day in San Juan where he has his office. I had done a 20-hour tour in Santa Cruz in the south of Argentina the day before and gotten back to my hotel at midnight. In Argentina, that's suppertime. They work from 9 until 1 in the afternoon. Then have a lunch and siesta from 1 'til 5 in the afternoon and then work from 5 until 9 at night. So midnight is early for Argentina. But late for me, I had been up at 5:30 in the morning. In any case, I had dinner with the group from the Argentex tour and went up to my room at 2:30 in the morning. I had to be out at the domestic airport at 5:00 AM.
So I arrived in San Juan at about 8:30 AM. I felt like crawling off the plane, I was so exhausted. Roberto had thought about that, he knew I was coming in from another site visit so he had his lovely daughter pick me up and drop me off at a downtown hotel for a good rest. Roberto came to pick me up about 5. We went to his office and he gave me a short brief on the projects we were going to visit.
We left late in the afternoon but at this time of year, the sun is up until almost 10:00 PM, it's summertime in Argentina. We drove on a good highway some 110 kilometers to the west of San Juan to the El Salto property.
I am amazed Argentina isn't more developed in mining. You can see the rock alteration from 15 miles away. It's a giant system and TNR controls 3,300 hectares of it. There are gold and copper mines as part of the system in place so it's not like some early stage exploration project.
Roberto Lara focused on several well-defined 3-D IP targets. They intend on drilling 3,000 meters hoping to hit a major porphyry copper target. I'd say based on my observation, they hit it. I saw the entire core from the 2nd hole. The first hole drilled was 391 meters along the Northeastern margin of the intrusion. It intercepted mineralized rocks along its entire length. Drill results could come at any time. I saw the entire 450 meters of the 2nd hole and it was mineralized with chalcopyrite, and pyrites throughout. The core was loaded with massive sulfides. That's the kind of rock I would expect to see with a 1% or higher copper porphyry.
This is going to present an interesting problem to my readers. I think TNR has hit the core of a massive copper-gold-moly porphyry. I saw 450 meters of mineralization. By itself that doesn't mean much but depending on the grade of the chalcopyrite, it could be a giant find. 450 meters of anything is giant. It looked good enough to me to call my broker and buy some shares on the spot. At the time, the stock was $.24 and I wish I had bought more at that price.
I think they are onto a giant find. The project is next to a road, power is nearby, a small town is located just down the way, it has all the infrastructure you could want. I think they have the mineralization as well. TNR owns 100% of the project.
If you buy now, you are taking a risk. It may not be ore grade. So if you want comfort in safety, you could wait until they announce drill results shortly. By now hole 2 is complete and in a couple of weeks the assays will be back. I think they have the goods and if they do, add to any position with good drill results.
We stayed in a tiny motel in the town next to El Salto and the next day we set out on a two-hour jaunt into the hinterlands. We were on the Eastern slopes of the Andes; Chile was just over the hill.
We were off to visit the El Tapau project 130 kilometers west northwest of San Juan. This is a copper-gold project Roberto Lara vended into the company. TRN owns 70% of El Tapau based on making payments of $1 million over 5 years and spending $3 million on work commitments.
TNR recently completed an IP survey on the project that defined a strong chargeability high, about 1.5 km by 2 km. The 5,000-meter drill program will focus on a 600 by 400 meter area that generated sample values between a trace of Au to 19 g/t Au. The El Tapau project is 3,400 square hectares.
I could go on for an hour about the various projects of TNR. I won't because you will get as confused as I was. I'd like to see them focus on a core of company making projects and I think I saw two. The copper-gold-moly project at El Salto could be a slam-dunk and we will know in a few days just how hot it is. But don't discount the El Tapau project.
Roberto held on to the project for 15 years when you couldn't give copper-gold projects away. He thinks it's good and I happen to agree with him. It's another monster-sized alteration package that goes on for 10 miles. He has honed in on a very prospective area within the total package and will begin to drill there. Good drill results would drive the share price far higher and allow the financing the company needs to do this right.
The company has 14 major projects. At this stage it's a liability. But if the remaining 12 are like the 2 I visited, they have a lot of potential.
TNR is an advertiser. We own shares. I happen to really like the management, I think their biggest issue is visibility and if they will redo the website in plain English, I think that will help. They have accomplished a lot with a tiny amount of money and I think they are on the verge of delivering world-class results. If you trust me, feel free to pick up some shares now. If you are concerned about safety, wait until the drill results. If you see hundreds of meters of 1% plus copper, load up the boat.
TNR Gold Corp