Mining PRs and the Ottotrans™, Part 45

Today's foray into the wild world of the junior mining news release turns its attention to Exeter Resources (XRC.to) (XRA) and this finely worded missive emitted by the company this very morning.

This is what they wrote:

Press Release Source: Exeter Resource Corporation On Tuesday September 13, 2011, 6:30 am EDT

VANCOUVER, BRITISH COLUMBIA--(Marketwire -09/13/11)- Exeter Resource Corporation (TSX: XRC.TO - News) (AMEX: XRA - News) (Frankfurt: EXB.F - News) ("Exeter" or the "Company") is pleased to report that the Chilean government has granted the Company a 10,726 hectare water exploration concession. The concession provides a second potential water source for the Caspiche gold-copper project. The concession is located approximately 100 kilometres (60 miles) north of Caspiche, at an elevation of 4,700 metres above sea level.
The aquifer is within the same high altitude region of the Andes where other mining companies hold granted water rights. The source of the water is seasonal snowmelt trapped by volcanic barriers and which is considered unlikely to make its way to the coastal plains. Water harvesting from such a basin would not be considered to have a negative impact on present and future supplies relied upon by coastal communities.
The Company expects to initiate a water exploration program comprising field mapping, geophysics, drilling and pump testing during Q4 2011, weather permitting.
Applications for two additional water exploration concessions in the area are still being processed by the relevant government authorities. Following approval, exploration programs will be extended to cover these concessions.
A mine at Caspiche is estimated to require less than 100 litres/second for the initial heap leach gold phase of the mine, rising to as much as 1,000 litres/second for a full scale sulfide mining operation.
In addition to the water exploration rights reported in this release, on February 8, 2011 (http://exeterresource.com/pdf/2011_news/Exeter_news_110208.pdf) Exeter reported an option over water rights of 300 litres/second from local owners. The seasonal thaw in October will allow us to continue with the baseline water flow program covering these water rights started earlier this year.
Exeter has retained specialist consultants to develop a water balance in the area with the objective of demonstrating that the use of these water rights for a mine at Caspiche will be sustainable over the project life. This will provide a technical basis for an application to the relevant authorities for permission to proceed with the installation of the necessary pumping and delivery infrastructure.
Exeter is continuing to study the availability of water in the region and to negotiate with other parties for the purchase or rental of water rights. The Company and its consultants are taking a constructive approach to Caspiche's water needs and the overall sustainability of the water resources needed by the mining industry.
In addition, the Company is pleased to report that the Pre-feasibility Study for the Caspiche Project, including in-pit crushing and conveying of waste rock remains on schedule for completion before the end of 2011.
About Exeter 

 And this is what it means:

We got no water

Question: In gold deposits, what's more important: Size or Grade?

Answer: GRADE

Exeter Resources (XRC.to)(XRA): Count me in on the spin

I 100% agree with the fine-eyed Toby Shute over at TMF and his call on Exeter Resources (XRC.to)(XRA) as regards the spin out of the Cerro Moro gold asset in Argentina (apart from a small quibble over numbers, as the 646k oz Au is bound to go up while the 16g/t grade is bound to go down and Shute makes no mention that the current inferred resource is still in early days......check the maps, Toby).

Anyway, here's the link to Toby Shute's article on Exeter published today; it does the heavy lifting for me and I like his call, here so go read over at his house. A good, succinct report.

And by the way, If you're wondering where you heard the spin out story first, it was here at IKN on November 18th, 2009. Pip pip!

Inside Christmas with the Canadian Crew

A quick rundown of cool "quick let's file it while nobody's looking" inside transactions over the Christmas period.

Here's top of the pops, Rusoro (RML.v): Makes you want to burst into the Cat Stevens oldie 'Father and Son', doesn't it?

Rusoro Mining Ltd. (RML)						As of December 27th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Dec 26/09	Dec 23/09	Agapov, Andre Vladimir	Direct Ownership	Common Shares	11 - Acquisition carried out privately	53,428,167
Dec 26/09	Dec 23/09	Agapov, Vladimir Pavlovich	Direct Ownership	Common Shares	11 - Disposition carried out privately	-53,428,167

Next up is Exeter Resources (XRC.to) (XRA) and CFO Cecil Bond had himself a wonderful Christmas time:

Exeter Resource Corporation (XRC)						As of December 27th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Dec 24/09	Dec 21/09	Bond, Cecil Robert	Direct Ownership	Common Shares	10 - Disposition in the public market	-65,000	$7.960
Dec 24/09	Dec 18/09	Bond, Cecil Robert	Direct Ownership	Common Shares	10 - Disposition in the public market	-81,000	$7.820
Dec 24/09	Dec 16/09	Bond, Cecil Robert	Direct Ownership	Common Shares	10 - Disposition in the public market	-100,000	$7.650
Dec 24/09	Dec 16/09	Bond, Cecil Robert	Direct Ownership	Common Shares	10 - Acquisition in the public market	260,000	$1.200
Dec 24/09	Apr 12/05	Bond, Cecil Robert	Direct Ownership	Common Shares	00 - Opening Balance-Initial SEDI Report
Dec 24/09	Dec 16/09	Bond, Cecil Robert	Direct Ownership	Options	51 - Exercise of options	-260,000	$1.200

Moving on to MAG Silver (MAG.to)(MVG) and HEY WOW! WHAT A SURPRISE! It's another round of bare-faced shameless self service from the management crew:

MAG Silver Corp. (MAG)						As of December 27th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Dec 24/09	Dec 15/09	Rubenstein, Jonathan A.	Direct Ownership	Options	50 - Grant of options	7,715	$6.320
Dec 23/09	Dec 15/09	Harris, Jody Lynn	Direct Ownership	Options	50 - Grant of options	20,000	$6.320
Dec 23/09	Dec 15/09	Colterjohn, Richard Mark	Direct Ownership	Options	50 - Grant of options	7,774	$6.320
Dec 23/09	Dec 15/09	Carlson, Eric	Direct Ownership	Options	50 - Grant of options	6,602	$6.320
Dec 23/09	Dec 15/09	Megaw, Peter	Direct Ownership	Options	50 - Grant of options	8,203	$6.320
Dec 23/09	Dec 15/09	White, Derek Christopher	Direct Ownership	Options	50 - Grant of options	14,971	$6.320
Dec 23/09	Dec 15/09	Neal, Gordon	Indirect Ownership	Options	50 - Grant of options	32,883	$6.320
Dec 23/09	Dec 15/09	MacInnis, Daniel Thomas	Direct Ownership	Options	50 - Grant of options	8,379	$6.320
Dec 23/09	Dec 15/09	Jones, R. Michael	Direct Ownership	Options	50 - Grant of options	11,855	$6.320
Dec 23/09	Dec 15/09	Hallam, Frank	Direct Ownership	Options	50 - Grant of options	34,761	$6.320

Now B2Gold (BTO.to) and the mysterious Robert Shaw at it again:

B2Gold Corp. (BTO)						As of December 27th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Dec 24/09	Dec 24/09	Shaw, Robert Peter	Direct Ownership	Common Shares	10 - Disposition in the public market	-1,900	$1.220
Dec 24/09	Dec 24/09	Shaw, Robert Peter	Direct Ownership	Common Shares	10 - Disposition in the public market	-18,100	$1.210
Dec 24/09	Dec 23/09	Shaw, Robert Peter	Direct Ownership	Common Shares	10 - Disposition in the public market	-10,000	$1.150
Dec 24/09	Dec 23/09	Shaw, Robert Peter	Direct Ownership	Common Shares	10 - Disposition in the public market	-30,000	$1.140
Dec 24/09	Dec 23/09	Shaw, Robert Peter	Direct Ownership	Common Shares	10 - Disposition in the public market	-35,000	$1.110

And to wrap up, Avalon (AVL.to) and Robert Anderson just can't seem to take Jim Dines' advice about his own stock....way of the world, I suppose:

Avalon Rare Metals Inc. (AVL)						As of December 27th, 2009
Filing Date	Transaction Date	Insider Name	Ownership Type	Securities	Nature of transaction	# or value acquired or disposed of	Unit Price
Dec 27/09	Dec 22/09	Andersen, Robert James	Direct Ownership	Common Shares	47 - Disposition by gift	-2,500	$2.670
Dec 27/09	Dec 21/09	Andersen, Robert James	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$2.940
Dec 27/09	Dec 18/09	Andersen, Robert James	Direct Ownership	Common Shares	47 - Disposition by gift	-2,500	$2.810
Dec 27/09	Dec 18/09	Andersen, Robert James	Direct Ownership	Common Shares	47 - Disposition by gift	-2,500	$2.810
Dec 27/09	Dec 16/09	Andersen, Robert James	Direct Ownership	Common Shares	10 - Disposition in the public market	-2,700	$2.950
Dec 27/09	Dec 16/09	Andersen, Robert James	Direct Ownership	Common Shares	10 - Disposition in the public market	-7,300	$2.940
Dec 27/09	Dec 16/09	Andersen, Robert James	Direct Ownership	Common Shares	10 - Disposition in the public market	-5,000	$2.930

Wow! An Exeter Resources (XRC.to) investment opportunity actually worth considering

I've had my issues about Exeter Resources (XRC.to) for a while (documented over the months on the blog), mainly because although the Cerro Moro project in southern Argentina has all the making of a good looking asset and eventually gold mine, the company continues to BS the world about the Caspiche dog thingy up in the frozen wastes of high Chile.

But news today is encouraging. Apparently XRC is mulling over the idea of spinning out Cerro Moro. If they do I'm a possible buyer, cos I've never been able to get over the idea of buying into that project and the large white elephant as well....but gimme a shot at Cerro Moro on its own and I'm listening to you, Yale.

The Prince of Morocco and Exeter Resources (XRC.v)(XRA)

In Bill the Quill's 'The Merchant of Venice', the beautiful Portia was being chased by a whole gang of suitors, one of which being the Prince of Morocco. Due to the way these things are (dead fathers' wishes and plot twists and stuff), at one point there are three boxes in front of the prince dude, one of which containing a portrait of Portia. If he picks correctly he wins her as his bride. The boxes are made of gold, silver and lead respectively and princedude picks the gold one. Inside? No picture of Portia (EpicFail) but a picture of death with the little ditty:

All that glisters is not gold
Often have you heard that told
Many a man his life hath sold
But my outside to behold
Gilded tombs do worms enfold

Portia and her decorative box (pardon the expression) came to mind when I read that Exeter Resources (XRC.v) (XRA) announced this morning it has an estimated 19.6m oz of Gold (plus silver and copper) at its Caspiche resource up in the wilds of Chile. We don't have a freakin' clue about how many of those ounces are economically recoverable (just check on the travails of Caspiche's near neighbours Kinross and the headaches they have trying to work out an economic plan) but we all like big numbers, don't we?

Cerro Casale capex and those dubious neighbour plays

Any professional analysts at the Can'o'corn feeling stupid about pumping the Exeter Caspiche story yet? Cerro Casale is just down the road from Yale's dog of a project, remember. Same rocks, same grades, same lack of water, same altitude...same same same. (Hint to Mr Z; Next time you go on a site visit make sure you leave the comfort of the deluxe hotels and spend more than four hours at the mine site.

Oh, then there's that dubious Volcan under Andina Minerals (ADM.v). Same place. Then those utter criminals at Capella (KPS.v). Same place. As mentioned many times before not all gold ounces are the same, so check out below what Kinross and Barrick have suddenly discovered! My, doesn't it remind you of that Noront Ring of Fire thing from a couple of years ago.......

Via the Financial Post:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

A key development project for mining giants Barrick Gold Corp. and Kinross Gold Corp. has run into massive capital cost escalation, raising more doubts from experts that it will get built any time soon.

The project in question is Cerro Casale, a huge, low-grade gold-copper deposit in northern Chile. Kinross filed a technical report this week that pegged the construction cost of the project at a whopping US$3.6-billion.

That is an increase of 86% over the last estimate of about US$2-billion, made in August, 2006.

"This number is obviously going to have pretty big implications," said Dundee Securities analyst Paul Burchell, who used to work at Cerro Casale.

"It suggests to me that a project difficult to justify five years ago is probably more [difficult] today."

Experts are also concerned with the aggressive pricing assumptions made in the Cerro Casale study. Kinross is using a gold price of US$725 an ounce and a copper price of US$2 a pound, which is actually higher than the current copper price.

"It's a tough project economically because of the capex and the prices required to make it work. In this market, it will probably be deferred," said David Whetham, a resource fund manager at Scotia Cassels.

CONTINUES HERE

Related Posts
All gold resource ounces are not the same (Cerro Casale)
Steve Saville, you're wrong about Andina Minerals (ADM.v)

Whatever makes you think........

......that Wendell Zerb and Canaccord are all nice and snuggly with Exeter Resources (XRA) (XRC.v)?

Click to enlarge

Nothing to see here...move along now, please.......

Exeter (XRA): C'mon guys, keep buying......

.......because this is setting itself up as the short of the year.

Right now it's not a case of if but when I reverse on this thing, so first job is to watch and gauge and try to guesstimate just how far this thing will travel. When a suspect asset is so overhyped by the full Canadian pump machine the opportunity is just too good to miss. DYODD, but something around the U$4 point (as mentioned yesterday) is my idea of a killer short position.

Meanwhile, I'll leave you with a music video to ponder.

Ventana Gold (VEN.to): How placements can be done to benefit all concerned

"If it looks like a duck....."

There were plenty of readers for this post yesterday entitled "The boyz are back in town" where I had a go at the greedy and self-serving way many Canadian junior mining companies raise capital, often urged on by 'The Houses' that freeload juicy finder's fees and options deals. All this is, of course, to the detriment of the people that they have a fiduciary duty to, i.e. the shareholders.

As is often the case, along with the spike in views for a particular post there came mailbag (always welcome from strangers when swearwords aren't included). And one mailer, initials GG, asked a good question, the key quote from which was:

".....all these companies need to raise capital so the alternative is what...?"

Yep, it's a good point. Everyone and anyone that buys a Canadian junior knows (or should know) that its working capital doesn't just grow on a tree and it will have to go to market from time to time to get the money it needs to add asset (and therefore shareholder) value. Until the company actually starts producing (or is sold) that's just the way it is.

My beef isn't against placements, bought deals, dilutive rounds of capital raising etc etc. My beef is the way it's done, and to illustrate the difference between the kind of insult shareholders of Colossus Minerals (CSI.to) had to suffer yesterday and the right way, here's another example from yesterday.

Ventana Gold (VEN.to) is a company I've already mentioned on the blog (in this post entitled 'Ventana Got Gold'), due to its recent and very interesting drill results published earlier this month. Yesterday it announced this placement to sell 6m units (each unit is one share at $0.56 and a warrant at $0.90) to raise $3.36m in working capital. As a bonus to the PR, the company also announced it had snagged a very experienced and well-regarded geologist as its new Veep of explorations for the Colombia property. Here's the chart of yesterday's action in VEN.to.

Click to enlarge

What we note here is that the dilution actually added share price value. It made the stock suddenly popular (check those volumes). In a little over an hour the stock moved up 20% and everybody is happy. The new guys on board, the already-in shareholders and the CFO.

Why is this so? Simply because VEN.to is being responsible. It's raising the modest amount of working capital that it needs via a placement that doesn't add massively to existing shares out (less than 10% in this case). Ventana is not adding an extra layer of fat to its coffers and screw ing the retailers the same way XRC.v or JAG or CSI.to has done (to name but three recent examples). VEN.to is thinking about all concerned, and it's notable that insiders at the company hold a significant percentage of those outstanding shares (over 30%) which means they're looking after their own pockets, too. Reader BF knows all about this part of the equation.

So kudos deserved by VEN.to, and we get a timely example of how placements can benefit all concerned, not just a bunch of lardasses sitting up there in Vancouver or Toronto. Ventana Gold just went up another notch in my personal estimation....certainly one to watch, people.

Finally, let's take a guess at the next gluttony dilution, and by the way Canaccord (Wendell Zerb David Pescod et al) has been pumping International Tower Hill (ITH.v) (along with the track record of its BoD), I'd say that one is high up on the list. DYODD, dude.

Exeter

A large sucker

Now we know why Exeter Resources (XRC.v) (XRA) has been pumped so hard recently by Canaccord's Zerb, by Canaccord's Pescod and by all the other self-servers that populate the Canadian markets.

This PR out 30 minutes ago:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

VANCOUVER, BRITISH COLUMBIA--(MARKET WIRE)--Feb 6, 2009 -- Exeter Resource Corporation (the "Company") announced today that it has entered into an agreement with a syndicate of underwriters to sell an aggregate of 10,500,000 common shares of the Company at a price of Cdn.$2.40 for gross proceeds of Cdn.$25,200,000 on a bought deal basis in Canada and a concurrent private placement in the United States to institutional accredited investors (the "Offering"). The Company will grant the underwriters an option (the "Over-Allotment Option") to purchase up to an additional 1,575,000 Common Shares at a price of Cdn.$2.40 per Common Share to cover over-allotments. The Over-Allotment Option shall be exercisable by yada yada continues here

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

And thus Yale&Co adds 20% to shares outstanding at a price 20% lower than recent trading. Retail holders should stock up on KY Jelly for today's opening.

I can't be bothered to find out who the underwriters are right now (got coffee to drink), but what's the betting that it turns out to be the can of corn? So anyway, now expect glowing reports about how XRC.v is able to get funding even in this tight market blah blah blah and more BS about how its 90% non-leachable heap leach project* is "potentially world class" blah blah blah and tuna on white guns all night blah blah blah. All we do know now is that XRC.v has plenty more money to whisk Zerb and friends off for another lavish beano in FY09.

Watching XRC.v is like watching the bigger fool theory in slow motion. It only remains to be seen if the company (read shareholders) is the biggest fool of all or whether a major is stupid enough to step up and buy this Caspiche moneypit. On the other hand, its Cerro Moro thing is promising and a potential mine. Every cloud has a silver lining albeit still early stage.

*as explained to Otto by a very smart geologist friend

Exeter Resources and the art of insulting your shareholders

With the downturn in metals prices, junior mining companies have quite rightly changed tack and become parsimonious. Every day we hear of drill programs being cancelled, expenses being cut, concessions on option agreements being handed back etc.

Not at Exeter Resources (XRC.to) (XRA), though. Because XRC managed to put $35m in the company coffers due to lucky timing of a placement (March 2008), it thinks it is now awash with cash and can splash shareholders' money on super-duper beano site visits for analysts and suchlike. Of course analysts visits are a part of the game, and when you have something to show the world it's good to get the big brokerages' scribes on your side. However in these budget-conscious times, the Exeter site trip that started today is nothing less than an insult to shareholders who thought they were adding cash for constructive reasons. Chairman Yale Simpson....

.... has spared no expense for the visit that starts today (November 13th), including:

1) A six day tour for 9 analysts, several high-rolling investors and up to 16 staff of Exeter (four of whom will accompany the party on the whole trip, including Simpson of course)

2) Accomodation in four luxurious hotels in Chile and Argentina for the whole party (see photos of three of the four underneath).

3) Chartered private plane transport for the whole group, including short-distance and long-distance flights.

4) 4x4 transport to project sites and also overflights of the same projects.

5) A meet-up and talk with Stephen Leary and Keith Barron (both ex-Aurelian and the duo responsible for the FDN discovery) at one of the luxury hotels.

6) Etc etc etc. These guys are pushng the boat out, so expect no expense spared at any given moment.

The tour starts today, with the party huddled together in Chile as we speak. But you don't need to take my word for it as you can view all the details of this luxurious freebie trip right here. Otto has got his grubby little hands on a copy of the official tour itinerary as published by Exeter Resources. Isn't it strange how they forgot to mention all this to their shareholders? In fact, this is the kind of document that companies, especially small junior mining companies like XRC, are keen to keep away from the retail investors' eye so Otto is breaking a rule or two here. But frankly these idiots at XRC need a lesson in basic manners.

So when the XRC 4q08 results come out, ladies and gentlemen of the investment community, take a good look at the filings (I suggest the SEC filings, as Exeter is obliged to give more detail to US authorities) and find out how much money this charabang has cost the company. And wouldn't it be amazing to find a glowing report or two from the analysts on board (including Wendell Zerb of Canaccord, John Hayes of BMO, Duncan Haye of Galena, Andrew Jackson of Global Resource Investors etc etc etc). You scratch my back...........

Moral of the story is that old expression companies use about shareholders: "If they can't take a joke, f*** 'em". But if you're a shareholder of Exeter and feel like complaining about the way they are splashing your money around on this ridiculously expensive site visit, the itinerary publication linked above (or even here, just to make sure) has all the necessary telephone numbers and contacts to the company to make your voice heard.

Hotel Miramonte, Copaipo, Chile

Hotel Los Españoles, Santiago, Chile

The view from Hotel Candil, Bariloche, Argentina