�
Tirex Resources (TXX-TSXV) Digging
in a Dinosaur District
Have you ever
watched a stock triple right under your nose without participating? Don't
worry; it happens to the best of us. But I'm a big believer that a
stock trades well for reason, so it's best to look under the hood and
find out why to make sure we're not missing out on the next
big discovery.
Tirex Resources (TXX-TSXv) came roaring out of the gate on October 19th,
2007 (Black Friday actually) and has never looked back. A $.50 cent IPO
now trading at well over $3 with over half of its float traded since
the IPO date. What's all the hype about?
It's the chance for
multiple, "Company Maker" deposits.
Tirex acquired the 344 square km
"Mirdita" project that covers most
of the historic mining district in Albania. This is a very
interesting story and it reminds me of our Albanian oil play three
years ago. Though this is a mining deal, the circumstances of the
opportunity are the same.
For years the
former Soviet government ran the natural resources exploration efforts
in Albania.
Generally they made a mess of things due to their archaic exploration
methods and their disregard for efficiency. As a result, Albania's
mining prospects have never been truly explored using modern mining
methods. Based on the historic data that had been locked up for years
in an old dusty filing cabinet in the Ministry of Mines office, it seems
the Russians were actually scratching the surface of a potential world
class Volcanogenic Massive Sulphide (VMS) District in Albania.
This could be a
really big deal for Tirex. VMS deposits
account for some of the most famous mineral deposits in the world and
represent true "company-maker" potential. What Tirex may have here is not just a portfolio of
deposits but a significant Mining District akin to Noranda
or Flin Flon.
VMS deposits are a
result of metal-rich hydrothermal solutions discharging onto or near
the sea floor to form bodies of copper, zinc, gold and/or silver-rich
mineralization.
"Historical
data suggests that the Tirex property has the
potential to host a large VMS base metal district." (NI43-101
Technical Summary Report, Mirdita Project, Albania, 2007)
Sifting through the
43-101 report also suggests that the project is host to not just one,
but 17 known deposits. An estimated 10 Million tonnes of copper bearing
rock of un-specified grades were mined by outdated mining
methodologies. Exploration was only conducted at surface, once again a
very archaic way to look for multi billion dollars worth of ore. Tirex was the first to recognize there were several
deposits that were left untouched but had rather large exploration
potential. These virgin deposits were not mined because they contained
high concentrations of zinc, a very valuable metal at today's price. This
presents another interesting opportunity for Triex.
Untapped copper/zinc deposits plus the zinc that had been mined as a by
product ended up in the mine tailings that can now be retrieved.
In early 2007, Tirex flew the first ever airborne electromagnetic
survey in the country to help identify drill targets for a 2008
exploration campaign. The strong speculation surrounding this stock is
based on the fact that the old Soviet data, though non-compliant, is
still very prospective. Investors are betting that Tirex
is indeed sitting on a VMS District. If true, this stock could go to
the moon. As I always say though, the drilling will tell the tale.
Tirex has a huge upper hand
having the status of a "first mover" in the country. With the
first airborne survey in hand, they were able to clearly define the 17
known deposits and also outline many more potential deposits that were
analogous to the known areas.
So what do we do
since the stock has already tripled? We look at some valuations. The
three hottest discoveries in Canada (NOT, VMS, KXL) all
commanded market caps in the range of $300M to $600M off a couple of
outstanding drill holes from one area.
TXX has a market
cap of around $150M now -obviously historic mining was already
profitable with metal prices a fraction of what they are today so what
could market cap be worth if they pulled out some economic grades in
today's market? I'll leave that up to you to decide.
TXX is clearly
going to be one of the most exciting exploration plays this junior
market has seen in a long time. Watch it, watch it closely, and don't
let it slip from your radar. This one could be big; speculation could
drive it even higher when they start drilling and maybe we'll even see
that $5 target that some European analyst just pegged it at. Who knows,
it's still an exploration play but with the historic data in hand and
the application of modern mining methods, they have an above average
shot at success. Stay tuned.
And
as a side note - one of the found directors Tookie Angus was also a
founding director of First Quantum and the real money wasn't made from
$1 - $3. It was made from $3 to $103.
For further information go to www.jameswinston.com DISCLAIMER
DISCLAIMER
Winston's Growth Stock Report is an independent electronic publication
committed to providing our subscribers with factual information on
selected publicly traded companies, politics, business, and economics.
All companies are chosen on the basis of certain financial analysis,
and other pertinent criteria with a view toward maximizing the upside
potential for investors while minimizing the downside risk, whenever
possible with the added aid of technical analysis.
Winston's Growth Stock Advisor and its editors do not accept
compensation from public companies featured in this publication.
All statements and expressions are the sole opinions of the editors and
are subject to change without notice. A profile, description, or other
mention of a company in the newsletter is neither an offer nor
solicitation to buy or sell any securities mentioned. While we believe
all sources of information to be factual and reliable, in no way do we
represent or guarantee the accuracy thereof, nor the statements made
herein. The staff of Winston's Growth Stock Report are not registered
investment advisors and do not purport to offer personalized investment
related advice. The publisher, staff, or anyone associated with, or
associated to, the Winston's Growth Stock Report may own securities
mentioned in this newsletter and may buy or sell securities without
notice.
The profiles, critiques, and other editorial content of the Winston's
Growth Stock Report may contain forward-looking statements relating to
the expected capabilities of the companies mentioned herein. The reader
should verify all claims and do their own due diligence before
investing in any securities mentioned. Investing in securities is
speculative and carries a high degree of risk. The information found in
this profile is protected by copyright laws and may not be copied, or
reproduced in any way without the expressed, written consent of the
editors of Winston's Growth Stock Advisor. We encourage our readers to
invest carefully and read the investor information available at the web
sites of the Securities and Exchange Commission ("SEC") at http://www.sec.gov
and/or the National Association of Securities Dealers
("NASD") at http://www.nasd.com.
We also strongly recommend that you read the SEC advisory to investors
concerning Internet Stock Fraud, which can be found at http://www.sec.gov/consumer/cyberfr.htm.
Readers can review all public filings by companies at the SEC's EDGAR page. The NASD has published
information on how to invest carefully at its web site.
Kin Communications (KinCom)
provides, for remuneration, corporate communications and investor
relations services to the above mentioned client(s). The information
contained in this email is based on existing disclosure documents or
other publicly available information. You are encouraged to seek
independent verification of any information that is important to your
decision and speak with an investment advisor regarding any of your
decisions. KinCom nor the above mentioned
client(s) is not offering securities or advising or soliciting the
purchase or sale of securities.
|