REY's copper/gold exploration results from Chilli are drawing near:
1. REY's "cornerstone project", The Fenix Copper Project - drilling has begun in late August (3000m of RC drilling). REY has already identified 40 copper outcrops with initial assays ranging from 0.01% to 17.24%.
"We lifted our holding in Rey Resources, which at 13¢ a share carries a modest market capitalisation of $9.4m. It has more than $3m cash and is about to begin a drilling program on a prime copper-molybdenum project in Chile.
Rey listed in June with an issued capital of 72 million shares and 37.8 million options exercisable at 20¢ by December 30, 2007. The shares have since traded down from a high of 20¢ to a low of 12¢.
We’ve held in the portfolio since last year 4000 Rey shares issued free to one-time shareholders in the listed Customers, the ATM operator. Customers spun off Rey, which held some coal--prospecting tenements in WA, and distributed 12.66 million shares to its own shareholders. Since the listing, many of those recipients who held small parcels have been selling, hence the price slip. We bought 16,000 at 13¢ to give us a 20,000 holding at an average price of 10.4¢.
Rey delayed a planned listing late last year while it completed a $1.9m share placement to India’s largest coking-coal company, Gujarat NRE Coke. That company now has 19.35% of Rey with options to maintain that equity to a maximum of 19.9%. Its CEO has joined Rey’s board, which includes executive chairman and secretary Julian Ludowici (also a director of the listed Ludowici, a maker and supplier of mineral-processing equipment).
Rey holds 3970 sq km of tenements covering the WA Canning basin where BHP in 1988 intersected a 15m-thick coal seam from 200m in its unsuccessful Petaluma oil exploration well. There are indications the coal seam outcrops near the surface further west, hence the Indian interest. Rey has applied for petroleum exploration permits for the same tenements and exchanged letters of intent with Arc Energy.
Of more immediate interest, however, is South America, where the company issued 13 million shares last year to acquire seven copper prospects in Chile and two gold projects in Peru. The immediate target is its 100%-owned Fenix copper-molybdenum prospect within tenements covering 64 sq km and located 40km south of Phelps Dodge’s Candelaria mine. Rey has identified more than 40 outcrops with assays ranging from 0.1% to 17.2% copper and up to 40 parts per million moly. An initial drilling program begins in mid-August."
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