I don’t know if anyone ever reads this stuff, but I’m always on...

I don’t know if anyone ever reads this stuff, but I’m always on the search for undervalued ‘littlies’ that offer excellent risk/reward prospects, and this one certainly fits the bill. I’ve been accumulating on the back foot for a while and will continue to do so. I’m set with a few now, so I don’t mind sharing with others.

With the share price at just 5.5 cents and 101.5m shares on issue, Latin Gold at Friday’s close has a market capitalization of just $5.6m. The company has about $1m in the bank, and merely as a ‘shell’ is worth about $2-3m.

But this is where it gets interesting…


GOLD

LAT now has a JORC-compliant inferred gold resource of 220,000oz at its Paron project in Peru. And there are excellent prospects of finding more!

So let’s just do some sums on that.

220,000 x AU$858.51 = $188,872,200

Yes, that’s right!…The ‘in-ground’ value of the gold at Paron at the current gold price is almost $189 MILLION DOLLARS – or about $1.86 per share!!! This, remember, in a company whose shares are trading at just 5.5c!

Now, before everyone jumps down my throat over a shonky ‘in-ground’ valuation, let me flesh the story out some…

Note these extremely encouraging factors:

- A large amount of the mineralization outcrops. As a result the strip ratio under any mining operation would be expected to be less than 1.

- The mineralization is located on the side of a hill making pit design relatively simple.

- The mineralization shows good lateral and vertical continuity within the ore envelope and this will bode well for any future mining operation.

- Previous studies of the Paron mineralization have shown it to be leachable with base recovery rates in the sulphide zone of +88% and averaging around 92% in the oxide zone.

- The drilling programme has highlighted a central core to the mineralized zone where intersections grading over 5g/t gold are common and bulk intersections average greater than 20 metres at +2.5 g/t from surface.

- The drilling programme has also indicated some additional potential for near surface mineralization to extend to the northwest of the mineralized zone.


An in-house scoping study is presently underway, and speaking to Latin’s geo, the likely back-of-an-envelope yield from Paron would be a $50-$70m profit to the company.

Let’s call it $60m. That’s 60c per share!

SIXTY CENTS PER SHARE!!!

But wait…yes, like in the ads…there’s a whole lot more to this story than just Paron!


COPPER/GOLD

During the December quarter, Latin Gold announced its intention to lead a consortium consisting of Latin Gold, leading Peruvian mining identity Augusto Baertl and an ASX listed mid tier company with a market capitalization of greater than A$700 million with Latin American experience (who for commercial sensitive reasons does not wish to be named) in bidding for the Michiquillay copper project in the Cajamarca department in Northern Peru.

The project, which is owned by the Peru government controlled Minero Peru, is a porphyry copper deposit that according to Pro-Inversion, contains “reserves” of 544 Mt grading 0.69% copper, 0.1-0.5 gpt gold and 2-4 gpt silver using a 0.4% cut-off.

To describe the Michiquillay bid, if successful, as a “company maker” is an understatement. These guys are hunting elephants…and if they bag THAT particular heffalump…well, the shareprice won’t be south of 50c, let alone where it is now!


URANIUM

Finally, and possibly of most interest to folk given the current climate, these blokes even have a uranium project for LAT!

Yep!…management evidently understands that as good as their other projects are, the ‘flavour of the month’ principle is the life blood of the spec sector. They’ve actually already tasted success in the uranium sector with the recently listed Uranium King (UKL) - and for LAT, are looking to repeat that success with Coyhaique, a 100% controlled project in Chilean Patagonia, which turns out to be highly prospective for uranium and base metals.

Coyhaique has always been a gold target because of outcropping epithermal vein systems. However, preliminary results from a new study have recognized the potential for the project area to host possible base metal and uranium mineralization.

This is founded on both the interpretation of the likely rock lithologies under shallow cover, as well a number of remote sensing surveys, in particular a suite of geophysical data including airborne EM and radiometrics.

Patagonia is rapidly becoming the international “hot-spot” for uranium exploration.


So there you go…Latin Gold (LAT)…fingers in several pies – gold, uranium, base metals – a steal at 5.5c.

Even discounted for sovereign risk (overstated in my view!), this thing should have a market cap of at least $15m in my view.

LAT is a BUY.