New Kid on the Block
I went to a gold show in Miami a few months before starting 321gold in 2001. There may have been 10 companies attending. There were so few visitors and so few companies interested in telling their story it played a big part in convincing Barbara and me to start our gold site. Either no one was ever going to invest in gold or silver mining ever again or it was the greatest opportunity in 5,000 years.
It turned out to be the greatest opportunity in 5,000 years and in 2001 through 2004 you could throw darts and pick winners. Everything was flying, even the turkeys.
Now we have a situation with record prices across the board in every commodity I can think of. Attending a gold show is like going to a revival. I think there are something like 3,000 juniors out there, most of them begging for attention.
Take my word, the stories are compelling, there are some simply wonderful juniors, all wilting on the vine. It's hard to get the attention of anyone when you are standing in a room with 2,999 other people screaming at the tops of their lungs, "Buy me! Buy me!" So I spend a lot of my time traveling, visiting new stories, in an effort to help guys get their story out.
So when I go to see some entirely new kid on the block and he has a story worth telling, it gives us great pleasure to visit the project, write about it and post it on the website.
Other than the bats; I hate bats almost as much as I hate heights and I got both of them on this trip. Don't think that writing up gold projects is all pleasure; sometimes you have to wade through bat shit after climbing creakity wooden ladders.
Yale Resources Ltd
I met Ian Foreman, President of Yale Resources (YLL-V) on a trip to Tanzania two years ago. At the time Yale was working on a project on Namibia that never came to fruition. During 2006, Ian made the decision to move the focus of the company to Mexico.
He's done well since then, assembling a host of properties across Mexico. I've seen him several times over the past two years and each time he said that he wanted me to come visit but not until he has something really interesting. When I saw him in Vancouver recently he indicated that it was time. He's got some barnburners.
I went down a week ago and spent a couple of days, first near Hermosillo, and then we took a short flight into the Sierra Madres.
I flew into Hermosillo and we drove an hour or so northwest to his Verde Grande project, part of the La Verde property. In mid-2007, Yale agreed to pay $1.6 million for a 100% interest in the 300 hectare La Verde property. Ian has staked an additional 2,000 hectares surrounding the original La Verde project.
The property has 5 known past producing deposits of silver, zinc, copper and gold. It has an historic resource of about half a million tons of over $200 rock. Yale has averaged 1.54% copper, 57.9 g/t silver, 1.32% zinc and .12 g/t Au over 181 samples taken over 500 meters of workings.
We climbed down through the 7 levels of drifts and 5 shafts. The place was filled with bats, the floor covered with you know what. You can catch a deadly disease from bat poop so we were wearing safety equipment and masks. I hate bats. But I hate climbing down ladders into old mines too, so this was a double header.
The visit was well worth it. You can see the mineralization, it's that rich. It's copper oxide so there is a good chance tests will show it can be leached. When it was mined before, it was mined as an underground mine, the material was floated and the concentrate shipped. Ian wants to mine it as a bulk tonnage, open pit and leach it. If he can, the costs to go into production will be low and potential profit high.
As I said, the rock is worth about $200 and there is a historical resource of about half a million tons. Yale's team wants to increase the tonnage through drilling to around 2 million tons and then go into production. $200 rock is about the same as 5-6 g/t gold and it's not earthshaking. And 2 million tons is tiny. But the idea of putting this puppy into production is brilliant.
I've said it before, I'll say it again, anyone not planning on production at these prices should be using the land for moose pasture, that's all it's good for. Yale still has a tight share structure. If Ian could get this into production, he could use the cash flow to finance further exploration. That's simply brilliant and what every junior should be striving for.
I like the La Verde property. The potential is wide open and if Ian used cash flow to finance exploration, certainly he is in a position to widely expand the resource and tonnage.
The next day we flew into the wilds of the Sierra Madre. Yale is deep in the midst of big game country and Ian is carrying a high-powered elephant rifle. The Urique property is in the middle of the prolific Chihuahua-Sonora gold belt, bordered by the Goldcorp's El Sauzal 2.1 million ounce mine on the south and Kimber's 45 million ounce silver. 8 million ounce gold deposit on the north.
The Urique property consists of 11 concessions over 28,800 hectares. Yale entered into a joint venture with Exmin in August of 2006 on the property. The terms of the JV call for Yale to spend $4.5 million over a five-year period and to issue 1.5 million shares to Exmin.
Basically, Ian has purchased a rock solid project, not cheap. That's a really good idea if you like the future of silver and gold. I do. The company has spent most of the last two years funding the basic, grass roots work necessary on any good target. They now have a number of excellent drill targets.
Yale is at the stage where the rubber meets the road. Geophysics and surface mapping indicate a 2.5-kilometer long, 2 to 9 meters wide structurally-controlled breccia area hosting 2 sets of prior historical workings. The target is called the Cerro Colorado target and drilling began early this month. Chip samples returned grades of 2.2 g/t gold and 150 g/t silver over 3 meters and 5.46 g/t gold and 35 g/t silver over 9 meters from another zone.
This is the sweet spot of investing when you are buying juniors. They are lottery tickets. It is gambling. But the best time to buy the tickets is just before the balls pop out. At least you know if you win or lose. Yale is in the midst of a 1500-meter program in 12-13 holes. Some holes are already in for assay and I'd expect results in 2-3 weeks. Should the drill results match the chip samples, Yale is going a lot higher and quickly.
Ian Foreman has done an excellent job of building a base of good projects in Mexico. He has committed to spending a lot of money on those projects and I approve. Far too many managers of juniors act as if all they are interested in doing is spending money and collecting a paycheck. Ian has bet his future on success. I fully support him. Exmin is currently the operator of the Urique project and this gives Yale technical and logistical support. If Yale hits, there will be lots of money from investors.
Yale began in Mexico with a few silver projects near Zacatecas that are the result of a joint venture with Impact Silver. At this point, he is and should be concentrating on La Verde and Urique. His plate is full and we may be hearing the sound of his ship coming in. He can sort out the silver projects when he has more people on board.
I was impressed enough with what I saw to buy some shares. Yale is not an advertiser. As a shareholder, naturally I am biased so you should take that into account. I asked Ian to only contact me when he has something red hot and I think he has it. Results will be out shortly.
As an investor you earned your money and any profit is yours to enjoy should you invest wisely. It's your money, do your own due diligence.
Yale Resources Ltd