Epstein-Research Blog | Skeena Resources, Gold Junior Buying Assets, Aggressively Drilling | Talkmarkets
Founder, Chairman, CEO, President, Treasurer, Analyst at Mockingjay, Inc.
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In 2011 Peter Epstein, CFA, left a $3 billion hedge fund where he was a senior natural resources analyst to help increase awareness of a number of natural resource companies in which he's invested in. 


Skeena Resources, Gold Junior Buying Assets, Aggressively Drilling

Date: Friday, October 9, 2015 5:44 AM EST

Skeena Resources Limited (TSX.V: SKE) ["the Company"] announced the acquisition of 100% of the GJ Property, "GJ" from majority owner Teck Resources Ltd. (TSX: TCK) and 49% partner, NGEx Resources (TSX: NGQ) ). Skeena Resources picked up GJ for a song. These days, when no one wants to (and can't afford to anyway) explore, drill, develop or buy assets, Skeena is on the hunt. Recall that the Company recently relinquished an acquisition attempt of Dolly Varden Silver (TSX.V: DV) when CEO, Walter Coles and team couldn't get it at a rock bargain price (my opinion only). The deal announced on October 6th is important in a number of ways,

++ A low-cost, long-term call option on the price of copper,

++ Diversification into a 2nd prospective opportunity, adjacent to the east of Skeena's Spectrum Property

++ Substantially more property (GJ roughly 10x the size of Spectrum) and the flexibility to use it in synergistic ways,

++ Diversification into a 2nd commodity, copper. No longer solely a gold play,

++ GJ includes the Donnelly & North Donnelly, porphyry copper-gold deposits, with a historic Measured & Indicated resource of 1.1 billion lbs copper & 1.8 million ozs gold, according to a NI 43-101 technical report from 2007, {Note: this data needs to be updated, M&I figures are not currently NI 43-101 compliant]. {Note: the yet to be re-submitted, no longer complaint resource, is contained in well under 5% of the entire land package.}

++ More than $30 million in exploration work done at GJ by various operators since the mid-1960s, including nearly $25 million spent by Teck & NGEx alone between 2000 and 2014. In today's dollars I image that $30 million would be considerably higher.

Can anyone throw cold water on any of my six claimed benefits? In my opinion, this is very good news, an attractive acquisition, with strong optionality, even before considering very appealing transaction terms. Red Flag? Why would Teck & NGXe abandon this property given that combined, they and predecessors had spent more than $30 million on GJ dating back to the mid-1960s? That includes nearly $25 million spent by Teck & NGEx alone between 2000 and 2014.

Is it that since Teck and NGXe are under pressure to curtail cash outlays, lower debt, slow spending on their pipeline of assets and reduce headcount? Is this a vote of non-confidence in DJ since Teck and NGXe sold it instead of another asset? NO! DJ was the definition of a non-core asset. Neither Teck's nor NGXe's corporate websites or presentations made a single reference to GJ. Red Flag resolved.

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