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Sacre-Coeur Minerals: The stealthy gold junior with multi-million ounce potential by John Lee 02/25/2008 Symbol: SCM.V, SCRMF.PK
Sacre-Coeur’s focus is a gold exploration company with properties in Guyana. Presently, it has an interest in approximately 850 square miles of mineral properties, including the Million Mountain project in north-central Guyana covering 21,768 acres in the Mazaruni Mining District. The Company has offices in Vancouver, Canada and Georgetown, Guyana. SCM’s Million Mountain property (Guyana, South America) is 6 kilometers north of The Peters Mine. The Peters Mine was the first significant gold producer in Guyana. The mine was put into production in 1904 and operated until 1909 by a New York syndicate. The main shaft was developed to the 300 foot level with the bulk of production coming from the first and second levels at 100 and 200 feet respectively. Mining widths varied from five to twenty five feet and all of the production came from oxidized quartz veins, with mill-head grades of approximately 41g/t Au. As mining progressed towards the primary (un-oxidized) ore recoveries dropped significantly and the mine was forced to close in 1909 after producing approximately 40 000 ounces of gold. The Peters Mine is currently being explored by John Tait’s crew at WSR Gold and has shown intercepts of 120 meters of 2.92 g/t Au. Mr. Tait (ex- Gold Eagle) has a big following and it’s always possible that SCM gets some coverage from the spillover of Peters Mine development. Under the guidance of SCM’s CEO, Irwin Olian (Harvard Law Grad), in two short years the exploration at Million Mountain Property has flourished, with multiple 100+ meters intercepts averaging 1g/t+ Au, including: 225.9 meters of 1.05g/t Au Full Drill Results can be found at http://www.scminerals.com/properties_million.htm.
Although there has not been an official resource estimate yet, looking at those intercepts you can figure out Million Mountain Property is quite sizable as it is. These thick intercepts from surface mean low strip ratios and a friendly open-pit scenario. There are several surrounding areas which could potentially develop into satellite deposits to the main pit. There is one top quality rig doing double shifts at Million Mountain. The management plans for a 43-101 in first half of 2008. Million Mountain is just one of several projects SCM managed to secure within its 1,200+ square kilometers claim area. SCM has recently discovered a new zone in its Northwest regional bloc. More details can be found here. According to the new release last September, the chip samples show exceptional grades including 115.38 g/t Au. In the January news release, the trench data confirmed high grade soil anomalies on the Northwest project with 12 meters of 7g/t Au. CEO Irwin Olian told me there were visible gold everywhere along the sampled 1 km stretch and the grades were higher than Million Mountain’s when they first started the Million Mountain program in 2005. A drill rig is being sourced and made ready to drill Northwest project. This just adds a whole new dimension to SCM. Guyana has demonstrated to be friendly toward foreign investment, and in particular to investment in natural resource development, during the past decade. General business, tax and mining laws are well developed and uniformly administered. Special facilities for natural resource development include duty and tax free import privileges for mining and forestry equipment. Several major successful natural resource ventures have been commissioned by foreign investors in the past ten years, including the world class Omai gold mine, a joint venture including two North American mining companies, Cambior (now IAMGOLD) and Golden Star. I have tracked SCM for almost two years now. I thought the company had a top property and management but it was a bit too expensive over $2. I waited patiently and began establishing a position since June as the stock came down from the exercise of warrants issued as part of the IPO. Now at $1.65, we are basically back to the pre-IPO level. I met with SCM’s CEO Irwin Olian several times in the past year. Irwin is a no-frill, all substance guy with an Economics degree from Princeton and a Law degree from Harvard. Million Mountain will only get bigger, and I can’t help but feeling warm and fuzzy whenever the Northwest prospect comes to mind. There is not a lot of guess work with SCM. I see the company as a safe bet with very good potential and a conservative management. Again, a safe bet in the junior mining means a good bet. Technically, the stock is at the major support level of a two year consolidation triangle of $1.60. The stock raced to 200 DMA (red) of $2.50 based on the NW chip sample news. While there is a risk of paying $35 million for a company without a 43-101 resource, the company does have over $5 million in the bank, and my study on the drill results compared to Keegan (KGN.v) and Pediment (PEZ.v), both trading at multiple valuations to SCM, suggests when the resource gets published it’s likely to surprise investors on the upside.
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