A Cheap Gold Lottery Ticket
Nov 8, 2011
I made a most interesting trip to Rwanda
in May of 2010. I've had to wait ever since to be able to write
it up. Face it; Rwanda is one of those places that you have to
look up on a globe to even figure out where it is. (Hint: It's
west of Tanzania, south of Uganda and east of the DRC.) I didn't
even have a clue there was gold there even though Banro
has some major deposits in the DRC nearby.
Gold was first discovered at the Miyove Gold district about 1938
and mined on a small scale at three mines contained within the
Miyove project. Historic government reports estimate that between
80,000 and 125,000 ounces were mined in the 1930s and 1940s.
Between 1984 and 1988, a Belgian company operating in conjunction
with the UN conducted a basic exploration program and drilled
some 2200 meters. The best results were a blazing 99 g/t over
A Russian company called Rogi did more work and came up with
a SWAG estimate (absolutely not 43-101) of about 400,000 ounces
of gold. Simba Gold did a deal on the 2937 hectares property
in March of 2011. Simba is paying Rogi 5.7 million shares and
$2.750 million for 100% of the project over a four-year period.
With only 34.5 million shares outstanding and a price of $.14,
the market values Simba at a tiny $4.8 million and the company
has $3.5 million in the bank. Basically the company was being
run on a caretaker basis for months with little or no news. With
the appointment of Werner
Ullmann as President a few weeks ago, you can expect a lot
Mr Ullmann founded Simba three years ago and it has taken this
long to get the company public and do the deal on the Miyove
project. Along with the appointment of Mr Ullmann as President
came the appointment of Allan Armitage as Senior Technical Advisor.
I've been to the project as I said, about 18 months ago. There
is gold there and it comes right to the surface. I bought shares
in the company two years ago and bought more shares in the PP.
I have been a buyer of shares in the open market since I think
it's really cheap.
The only issue here is grade and tonnage. It's a proven past
producer, gold can be found in oxide form right at the surface
and there have been several very high-grade intercepts. What
the company needs is a good well-directed technical program to
advance the project. It's an early stage project with nice potential.
I've spent a lot of time in Africa over the past three years
in Tanzania, Ghana, Mali and Kenya. Rwanda was a pleasant surprise.
It's far more developed in terms of infrastructure than most
of Africa. It's in the hills so even though it's near the equator,
the climate is cool at night and warm in the day. I don't think
I came across any mosquitos. The project is a quick 45 minute
trip north of the capital, Kigali.
No one knows enough about the project to make any projects but
at $.14 the stock is a very cheap call on the price of gold.
With a successful technical program it has a lot of potential.
It's located in a business friendly environment with far less
corruption than its neighbors.
Simba is an advertiser, we own shares and we are biased. I had
a most enjoyable visit to the project and I'm looking forward
to progress on the exploration side. With the treasury cashed
up and new management in place, Simba has a lot of potential.
As always, you are reminded that you alone are responsible for
your own due diligence. We share in neither your profit nor your
Simba Gold Corp
SGD-V $.14 (Nov 07, 2011)
SMBGF-OTCBB 34.5 million shares
Simba Gold website