Apogee Minerals Ltd.: Silver for $0.7 an oz
by John Lee
http://www.goldmau.com/ape.php
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02/07/2008
Symbol: APE.V, AGEEF.PK
Recent Price: C$0.305
Shares O/S: 53 M
Market Cap.: C$16.3 M
52 Week Range: $0.210 - $0.680
Apogee Minerals Ltd. is a Canadian company developing the giant Pulacayo-Paca silver-zinc-lead project in Bolivia. The project is a Joint Venture (JV) with Apex Silver where Apogee stands to earn 60%.
I visited the Pulacayo mine in September of 2006. Historically, it was Bolivia’s second largest silver mine with 600 million oz of past production. Most of the silver was mined from the Tajo Vein System with approximately a 1 kilometer strike, 300 - 500 meters in width and mined down to 1,000 meters in depth. I went in the 1km+ San Leon adit perpendicular to the vein system, and saw the main shaft. I was told there were at least 20 levels of under-workings which were flooded. Visible silver veins can be seen throughout the tunnel with many branches. The system had never been systematically drilled and explored other than the limited drilling done by Apex silver in 2002 and Apogee since 2005.
The company started out below 30 cents before the Pulacayo JV in 2005, and ran to $1.50 in 2006 on spectacular drill results (several 40 meters+, 300g/t Ag) from Paca, a small satellite pit 5 kilometers from the main system. In 2007, Apogee released a Paca 43 - 101 compliant resource of 25 million oz Ag; along with 500 million pounds of zinc and lead combined.
Since then, over the past 18 months the stock has come all the way back to 23 cents from $1.50 due to the uncertainty about Bolivia.
Almost two years after president Morales came into power, Bolivia has not confiscated any western mines and Apex silver just successfully commenced its massive silver-zinc (target production of 20 million oz Ag and 400 million pounds of Zinc a year) commercial production at San Cristobal. Apogee also received signed agreement to exploit the Pulacayo project in late 2007.
Apogee underwent a change of management in mid 2007 and brought on a 20 year seasoned veteran professional geologist in David Gower from Falconbridge. David chose to explore the upper 300 meters of the Pulacayo system since late 2007 and so far has seen excellent drill results of 60 meters of 260g/t Ag.
From
(m) |
To
(m) |
Width
(m) |
Silver
(g/t) |
Lead
(%) |
Zinc
(%) |
PUD |
043 |
31 |
146.90 |
0.31 |
0.96 |
PUD |
045 |
61 |
262.51 |
0.79 |
2.93 |
PUD |
046 |
84 |
106.29 |
0.86 |
2.26 |
PUD |
047 |
12 |
207.08 |
1.55 |
0.82 |
http://biz.yahoo.com/ccn/080111/200801110435698001.html?.v=1
Throughout 2007, APE consistently produced similar results yet the stock failed to get any meaningful traction. These January results however, were greeted with enthusiasm and the stock raced up 50%+ with the largest trading day volume seen over the last 18 months. This tells me that the bottom is now in for the stock at 30 cents.
These intersections confirm the presence of a thick zone of silver, zinc and lead mineralization in the center of the upper part of the Tajo Vein System and APE thinks this part of the Tajo Vein System and has excellent potential to develop into a resource with significant grade and tonnage, perhaps greater than Paca. The company has three rigs turning and intends to complete the resource drilling and resource calculation at Pulacayo in Q2, 2008 so it can be included in upcoming scoping and pre-feasibility studies.
Technically, the stock has retraced to 50 DMA (blue) presenting a good entry point at 30 cents. Next level is 200 DMA (red) of 40 cents. This is a big resistance but if it’s overcome then next level is 70 cents.
At its current $15 million market capitalization with 25 million oz of silver and growing, I can’t think of a better value for silver than Apogee in the junior league, or in any league for that matter.
John Lee
johnlee@goldmau.com
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