CMM owns 260,868 Poderosa shares. The market value has moved a bit in the last few days. Still small potatoes, but it gives us access to C$430,000 in short-term investments (it moved from around C$350,000 I think).
Module Resources recently made an option payment to Century in the form of 1M of their common shares. I think there might be more option payments required in the future also. Century will retain 10% ownership of the Carolin Mine, plus back in rights for 50% in total. Module's share price is $.10, and their shares are thinly traded. Century would probably have to trade for about 2 months in order to cash in those 1M shares, and not drop the $.10 share price average too much. Our million shares carry a market value of C$100,000.
Module announced yesterday that they have hooked up with another company to do some studies on the feasibility of processing some old tailings. I think a lot of tests have to passed first before they actually get to sample the tailings. I think it's all months away though. They are trying to generate a bit of cash flow from the old tailings - they're using a company that has had good success with this in the past. It would be tiny potatoes, but if it works then theoretically Century might be entitled to at least 10% or more depending on the stage of the option buy in (although, 100% of the cash flow would naturally go directly back into developing the project).
4 comments:
Quick follow up note on the Module option. Unless the deal has been altered, it looks like Century will get (or has gotten) a second 1M shares in payment from Module (ending Oct. 30'09). By that date, Century is suppose to own 2M Module shares (or equivalent cash). The 2M shares currently carry a market value of C$200,000.
Also, it looks like Century currently still retains a 33.4% ownership of the Carolin Mine, and will continue to retain that percentage for the foreseeable future.
Hello Production05, enjoy your comments. On speaking about Module, have you ever noticed who is on the board and the management team. Was surprised at how many CMM and Tam People are here.
Drag8750
Module Resources is where PK et al. will head once they are told to promptly leave CMM by the major shareholders. One can only hope!
Hi drag8750,
I am not familiar with the TAM people, as I don't follow them closely. I did notice a few CMM people though. I think it's partly due to Module's core project being an option from CMM and partly due to Module sharing the same office as TAM and CMM - it helps to reduce the G&A costs for all 3 companies.
I don't own any Module shares personally, but I think they have some decent potential on a longer term basis, as I believe the Carolin property is legit in a US$1,060 gold price environment. It produced around 43,000 ounces from 1982 - 1984, just missing the last gold bull run (although the Carolin Mine share price took total advantage of the high prices while the mine was in development prior to 1982). I think it closed down after 1984 due to low gold prices.
Actually, here are some share prices from the last gold bull run:
1) Carolin Mines:
Dec'78 share price - $3.10
Jan'80 share price - $21.00
Share price peak, Oct'80 - $57.00
2) Sigma Mines
Dec'78 share price - $36.00
Jan'80 share price - $47.00
Share price peak, Sep'80 - $57.00
Sigma Mines back then was the Sigma underground portion of what we call Lamaque today (the Century Mining portion). The Lamaque portion from 1980 was owned by Teck Corp (Teck Cominco/Teck Resources). Actually, I numbers I posted above doesn't show it but I think Sigma Mines had done a prior move from about $3.00 to $36.00 prior to 1978. I heard John Embry talking about that. I think he said he owned from about $3.00 to about $20.00.
Of course, we have yet to see this type of frenzy in the junior gold space this time around. I think this gold bull market is different though. I think economic impact is much more global this time around and more drawn out (of course, the debt market crash completely hammered the junior space this time). I think the factors driving the gold price this time are far different from last time also (i.e. no double digit inflation, although monetary inflation is coming due to massive "quantitative easing" that was done around the world to prevent a 2nd great depression, and no severe middle east crisis as yet). As such, last time was one giant spike with no sustainability (everything crashed relatively fast), while time it is much more calculating with pullbacks to build foundation. In my opinion, this bull run is much better for investors who are looking for a multi-year investment. Maybe more dollars will come back into the junior gold space once institutional investors are ready to take on a greater risk/reward profile. I highly though we will see the same type of share price frenzy that was realized in the last gold bull run though. It should be rewarding to junior gold investors nonetheless.
Anyway, back to Carolin and Module. I think Module's progress as been terrible slow due to the lack of cash. They should be doing much better for a semi-advanced stage project. I Carolin/Module will likely have to take a back seat in this gold price run (at least compare to Carolin's performance last time), but there is still plenty of time for them to do well if they begin to show some progress.
The ideal scenario is for Module to expand the resource base at Carolin/Lader over the next couple of years (they have about 200,000 historical, non-43-101, ounces identified already) then eventually bring the project back into production in this rich gold price environment. The Module shareholders can enjoy a good share price run, then eventually merge with Century to realize full benefits from a more robust mid-tier company for both Module and Century shareholders. That would be the ideal scenario for Carolin, but we are a long way away from that.
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