Terraco Gold: Drill Success Continues
Dr. Michael Berry Morning Notes: Wednesday July 25th, 2012
" This AM Terraco Gold announced another set of drill results from its Almaden (Nutmeg Mountain) property in Idaho. The stock, like almost all Canadian Venture Exchange companies, has been under pressure since March 2011. The Terraco graph is not pretty.
Still, the company has adequate cash from the royalty (on Midway�s Spring Valley) deal we discussed a few months ago. In addition, the company has very strong institutional backing in Canada. Perhaps more important, we think the management is very aware of the situation and is husbanding its cash stash.
Few people realize that the company controls a very sizeable royalty asset � worth, at present value we believe, over $80 million. This asset is very, very liquid.
Here�s more good news for Terraco shareholders. Gold is finally through resistance at $1600 this AM. It does now appear that The U.S. Federal Reserve will move to ease once again. This is not a surprise to us. If our Pols (both sides) in Washington decide on a fair resolution of the �Fiscal Cliff� we could have a roaring rally of the U.S. and Canadian equity markets. This will positively impact the Canadian Juniors first and foremost.
At Almaden, Terraco has now drilled 50 core holes. As in this AM�s press release several of these holes are showing 1 + gram gold grades. We hope for a PEA by year end that will establish a recoverable resource of 700,000 to 1.2 million ounces (my opinion only) of open pittable gold. At $1600 gold this will be a very nice wealth creating and sustainability factor for Terraco shareholders.
Please remember that 887 holes were drilled in the deposit by previous owners. However these were either RAB (lost grade) or RC holes. Below we show the current drill results � there are more to come and quite likely a Preliminary Economic Assessment (PEA) by year end.
Potential (not certain) Catalysts for Terraco Gold:
1. Grade bump up possibility from average of .8 gpt to 1.0 +?
2. Extend the tonnage?
3. Improve the recovery?
4. Much higher gold prices in the next year or two to increase cutoff grades?
5. Barrick eventually needs Moonlight?
6. Someone wants the Terraco�s royalty?
Regarding the Almaden drill results Todd Hilditch, President and CEO of Terraco, said: �We are excited about this second set of results, from our Idaho advanced �stage project, which include the best intercept of grade and thickness drilled by Terraco to date. Terraco looks forward to the results of the remaining drill holes to be released in the coming weeks�.
Four holes are pending assays at Almaden. If any of these catalysts are realized, it is easy to see that the company�s shares are worth more than its current share price. We own Terraco Gold stock and we are advisors to the company.
www.DiscoveryBoard.com
Fair Warning. We are sitting on the offer price and we reserve the right to purchase the stock within 48 hours of delivery of this Morning Note.
Addendum: Drill Highlights Include:
Hole MET-2 intersected 76.2 m averaging 1.195 grams per tonne (�gpt�) gold from surface to 76.2 m, including 27.0 m averaging 2.168 gpt gold to 40.9 m, with 5.0 m of that inclusion averaging 3.220 gpt gold to 29.4 m;
Hole TAL-781C intersected 61.6 m averaging 1.100 gpt gold from surface to 61.6 m, including 7.6 m averaging 1.488 gpt gold to 18.3 m , 18.3 m averaging 1.408 gpt gold to 39.6 m;
Hole TAL-785C intersected 44.2 m averaging 1.182 gpt gold from 3.0 to 47.3 m, including 18.3 m averaging 2.032 gpt gold to 29.0 m." --- Dr. Michael Berry Morning Notes: Wednesday July 25th, 2012
Dr. Michael Berry's Bio:
Dr. Berry formerly taught at the Darden School University of Virginia and was a Chaired Professor at James Madison University. He managed money for Heartland Advisors in the Value Investing class before developing the discipline of Discovery Investing. He is a frequent lecturer at the federal reserve and has testified to Congress on natural resource issues in the US and globally. His current research is focused on Value Chain Analysis for industrial infrastructure development. Morning Notes by Michael Berry, Ph.D. daily. This publication is distributed to clients worldwide to identify current market opportunities and behavioral anomalies.
I believe the Discovery Investing Scoreboard is currently available on a complimentary trial basis:
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Thank you as always for your time.
Matt
Please find the updated Terraco Gold Corporate Presentation contained in the link below: http://www.terracogold.com/i/pdf/Terraco_CorpPresentation.pdf
Please find the Terraco Gold Corporate Video with contained in the link below: Terraco Gold Corporate Video
Please visit our website at: http://www.terracogold.com/
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