re: dlux ~ in a nutshell G'day Dlux,FYI, read on...........Most...

re: dlux ~ in a nutshell G'day Dlux,
FYI, read on...........

Most investors expect junior exploration companies to be enthusiastic
promoters of their properties. But there is a fine line between enthusiastic
promotion and blind faith, says The Mine Canary
Chameleon Mining NL (ASX: CHM) recently wound back its activities in Fiji,
where it had been exploring since 1996. This change of heart came barely one
year after the company listed on the ASX in a 20-cent float. Chameleon's
share price is today hovering between three and four cents.

Chameleon's prospectus contained many positive comments about the Fijian
properties. The prospectus listed the company's two most important
exploration priorities as a target adjoining the Emperor gold mine and the
Ndakunimba Structure, where "based on previous exploration drilling of only
5% of the structure, directors have estimated a geological resource of
500,000 ounces of gold".

A clutch of Australian gold projects were given their share of praise, but
from the Chairman's Letter right through to the Independent Geological
Report, Fiji was the number one priority in Chameleon's prospectus.

Chameleon's managing director is Gregory Barnes. Not to be confused with his
republican namesake from Tasmania, Barnes is a consultant geologist from
Perth with over 30 years experience. Readers may recall his recent
association with New Millennium Resources, an AIM-listed company which owns
a niobium deposit in Greenland.

Anyway, in March this year Chameleon announced it had terminated the
services of its Fijian exploration consultant, Nationwide Mineral
Consultants Pty Ltd, and that ongoing work would be conducted by Suliana
Niurou, Chameleon's exploration director and a Fijian national.

In its Explanatory Statement for an EGM held in late June, Chameleon
revealed that "following the termination of the consultant for Fiji, the
company has discovered that it has considerably less data than previously
realised to commence its fieldwork and drilling program in Fiji."

Which raises a few questions about the directors' prospectus estimate of
500,000 ounces!

The author of the Independent Geological Valuation, Terry Willsteed,
concluded the Fijian properties had a Most Likely value of $5.8 million, yet
Willsteed clearly states he "has relied substantially on information
provided by the directors and consultants of Chameleon Mining NL".

Now we find Chameleon doesn't have enough data to even begin fieldwork and
wants to spend only the minimum amount required to keep the tenements in
good standing.

Chameleon clearly wants to put Fiji behind it. The company has just paid the
first instalment (US$50,000) of the US$4.5 million purchase price for the
Cerro Negro copper mine in Chile.

This is one of those deals that mining promoters dream about, while the rest
of us can only scratch our heads. Instalment payments of US$600,000 must be
made by December this year, with a further US$1.4 million payable in January
2005 and US$2.5 million in April 2005.

Chameleon believes the mine will make a profit of US$3.4 million in 2004 and
US$5.4 million in 2005.

But wait, there's more!

Chameleon's September 9 announcement informs us Cerro Negro set up an
agricultural project in 1999 to utilise the mine's abundant waste water and
high quality soils in the area; "today there are 45 hectares of avocados,
artichokes and olives being produced and sold". Delicious, although "peak
production is not expected until 2009".

Chameleon expects revenue from agriculture will be US$336,340 in 2005, but
by 2009 this will grow to US$3,675,620 (such a specific forecast suggests
Chameleon may have forward sold artichokes, but the Canary cant be sure,
since he haven't got the 'heart' to ask).

The profitability of the salad business raises the important question of
whether Chameleon will remain listed as a Mining and Oil company, or whether
it will be transferred to the grocery index alongside Coles and Woolies.

The Mine Canary hasn't visited Cerro Negro and must take Chameleon's word
that it is as good as it sounds. Your correspondent certainly has no reason
to doubt the quality of the project, just as he had no reason to doubt the
500,000-ounce resource estimate in Fiji.

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