"Cascabel to be a monster"-| User avatar ForrestG 1 star September 10, 2012 06:49 pm 7 cents per share and a market cap of $10 million for CGG is ridiculous B.S. Long suffering CGP shareholders deserve a break. We are going to get one soon. Someone very intelligent once said "a discovery is like a takeover on steroids".
CGP is on the brink of at least one MAJOR discovery. The MAJOR discovery will be at Cascabel’s gold-copper porphyry property... This is not my humble opinion alone... I will explain.
In September 2011, CGP posted maps of Cascabel. I did some rough calculations and arrived at some pretty unbelievable numbers. I am not a geologist, but if I was even half correct then CGP was going to soar. I loaded up with CGP shares. Here is the link to the Cascabel maps on CGP website.
On April 10, 2012, it was announced that Cascabel was being JV’ed with Solgold PLC (trades as SOLG on the London AIM exchange). SOLG wasn’t doing well. The price was declining seriously. This was surprising because SOLG brought in a very experienced management team with a record of success and the ability to take a project from exploration to production (IMO). I kept watching SOLG. I wanted to buy SOLG but setting up an account to trade on London seemed like too much aggravation and expense relative to the costs, benefits, price differential, exchange rate, and percentages. Besides, I could still buy more CGP if I wanted. Things changed on July 11, 2012. Prior to this date, SOLG had about 310 million outstanding shares, and a market cap of about 15 million British pounds ($25 million).
SOLG’s July 11, 2012 Placement at 4 British Pence per Share
On July 11, 2012. SOLG did a placement of 33 million shares at 4 British pence/share to raise $2 million Australian. The Directors of SOLG participated in the placement and took 11 million shares or approximately 1/3 of the placement. Following the placement, the Directors collectively held approximately 16% of SOLG’s outstanding shares. 2 of SOLG’s biggest institutional shareholders are Tenstar Trading with 66 million shares (approx 18%) and DGR Global with 33 million shares (approx 9%). So SOLG directors and SOLG’s two biggest institutional shareholders held approx 43% of SOLG’s outstanding shares. (Note: SOLG’s Director with the largest shareholding is listed as the Managing Director of DGR Global in DGR materials). Management seems to have quite a stake in SOLG. I like when management stands to gain from the success of the company more than I do. After the placement, the price of SOLG dropped below 4 pence. Here is the link to the SOLG website for these numbers and the news releases.
http://solgold.com.au/
The JV Agreement between CGP and SOLG for Cascabel
On July 24, 2012, the definitive JV agreement between CGP and SOLG was signed. SOLG gets 65% of Cascabel by spending $7.8 million over four years and making placements of $850,000 to CGP. SOLG gets up to 85% of Cascabel by doing further work capped at $20 million. The July 24, 2012 News Release formalizing the JV on Cascabel states the agreement provides for “an aggressive first year exploration program...Identified targets will be prioritized for drill testing in late 2012, pending receipt of the requisite permits”. This is excellent (IMO). (NOTE: CGP gets a 10% of the JV expenditures as management fees. CGP should earn about $2 million over the course of the JV for SOLG to earn 85%).
Will they find anything?
Certainly there are never guarantees. I have found some interesting opinions on this point.
DGR Global is an ETF type thing that trades on the Australia exchange. They hold 9% of SOLG. Page 4 of their July 17, 2012 investor presentation is titled “Buy Low- Sell High” and they display SOLG’s price chart. They include the caption “Ex Tujuh Bukit CEO – Cascabel to be a monster”. Here’s the link to the presentation.
SOLG’s current investor presentation devotes pages 8-12 to Cascabel.
On page 9, “Drilling to commence as soon as possible –Q4, 2012”. “Target > 1 billion tonnes, gold-copper”.
On page 10, “An outstanding opportunity. A mineralised porphyry system exists at surface”.
On page 11, “Comparable potential scale to the 1.7 billion tonne Tujuh Bukit gold-copper deposit in Indonesia held by Intrepid mines”. There are side by side maps comparing Cascabel and Tujuh Bukit. The link to the SOLG presentation is below.
Tujuh Bukit’s 1.7 billion tonne deposit has 25 million ounces of gold and 20 billion pounds of copper or so.
Yanacocha’s 47 million AU ounce deposit in northern Peru is 700 million tonnes of ore grading 1g/t gold (According to a 2010 43-101 for Odin Mining). If these estimates are correct then Cascabel’s target is easily larger than Yanacocha. Trelawney’s 2012 PDAC Investor Presentation states the 7 million ounce Cote Lake deposit was 250 million tonnes grading about 0.9g/t with a cut off of 0.3g/t. Cote Lake was only gold and TRR got taken out by IMG for about $600 million (in fairness, TRR also had $100 million cash, other land, and a good jurisdiction with good infrastructure). Cascabel’s target is 4 times TRR’s Cote Lake with 5 different metals, gold, copper, silver, lead, and zinc.
Cascabel is a massive porphyry multi mineral deposit at the surface. A large near surface massive deposit should be lower cost due to economies of scale and minimal overburden of the resource. CGP’s cut even at 15% will be worth a small fortune because the CAPEX to CGP for start up will only be 15% AFTER SOLG has spent the first $20 million. CGP has less than half the number of shares issued as SOLG so CGP’s 15% is significant. I still believe Gama is going to be another major discovery. CGP has other prospects, some of which Willie wrote about this week. With LD/WB, Shyri, etc. I think CGP will do just as well as SOLG. Regardless of how CGP does, SOLG scored HUGE with Cascabel. People on the other side of the world seem pretty excited about Cascabel. Me, I knew it was a winner the first time I saw it, but I’m just a lowly retail investor.
Full disclosure; I hold a lot of CGP and have never sold a share. I opened an account to trade London’s AIM exchange and bought SOLG over the past month.
I am bothered that I found this information by searching companies on the other side of the world. Has anyone else been able to locate this stuff anywhere through CGP? Just wondering.
Good luck to all...
As always, do your DD.
ForrestG
PS, you can follow SOLG on the London Stock Exchange website or on Bloomberg’s website.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
and from me, dickie3times -iii UK pportunity for years?
(20min delay)