El Condor Minerals Inc. has signed a definitive property purchase agreement with Quetzal Energy Ltd. in respect of the previously announced (May 11, 2011) acquisition of the Horden Lake property, a copper-nickel property with precious metal credits located in the province of Quebec, approximately 200 kilometres north of Mattagami, Que.
Under the terms of the purchase agreement, El Condor will purchase the Horden Lake property for a price of $5-million, comprising $3-million in cash, of which $100,000 has been paid as a non-refundable deposit, and $2-million in common shares of El Condor. The common shares will be issued at a deemed price equal to the lesser of 20 cents per share, and the price per share of a private placement of common shares that will be undertaken by El Condor for proceeds of not less than $3-million and which will complete concurrently with, or in conjunction with, the acquisition.
El Condor has completed its due diligence of the Horden Lake property and has engaged an independent geological consulting firm to prepare a National Instrument 43-101-compliant technical report on the property. Completion of the acquisition continues to be conditional on regulatory approval. El Condor will complete the private placement funding, the terms of which are currently being negotiated, in conjunction with the acquisition.
Leigh Freeman, El Condor president and chief executive officer, stated: “We are excited about this new important asset. Horden Lake is a Canadian legacy deposit, having been discovered in the 1960s as a result of some of the earliest airborne electromagnetic surveys by a joint venture between Inco and Noranda. A combination of increased metal prices and improved infrastructure make this NI 43-101-qualified resource relevant today, and we feel strongly that the district will continue to yield additional discoveries.”
The Horden Lake property is a copper-nickel property with platinum group and precious metal credits located within a 40-kilometre-long layered ultramafic rock sequence. The total land package comprises 106 mineral claims and is in excess of 52 square kilometres.
Working capital private placement
El Condor is also pleased to announce that it has completed the working capital private placement financing, previously announced May 20, 2011. The size of the offering was increased from 6,666,667 units to 7,350,036 units, for gross proceeds of $1,102,505. Each unit comprises one common share and one-half of one share purchase warrant. Each whole warrant entitles the holder to acquire an additional common share at a price of 25 cents per share for a period of one year.
The proceeds of the financing will be used for general working capital and corporate purposes. Finders’ fees of 8-per-cent cash totalling $61,800 and 412,000 warrants to purchase common shares at a price of 25 cents per share for a period of one year were paid on portions of the private placement. All securities issued under the private placement are subject to a four-month-and-one-day hold period that expires Oct. 15, 2011.
CC – Looking for Assets
With the recent market correction it has been a difficult to find anything positive to talk about. But with all challenges, opportunities do present themselves and although “Go Away in May” seems to be an accurate moniker, history may have the answer as we search for those opportunities to profit from. Recent statistics indicate that
“May and June have delivered two of the three worst average monthly returns since 1962. However, based on the past couple of years, investors should have been looking to “sell in May, come back in July, sell again in September and come back in October. Selling in May 2010 was fine but July was the second-best month of the year while staying out of the market in 2009 meant missing out on a strong July and August and an eventual gain of 21 per cent.”
So then if July is to be a shining star and August too … what do we look for?
Assets. Look for and buy companies with assets on the books. Assets that are not yet fully valued or assets that can be expanded. Assets that have become cheaper by the herd mentality of ‘Sell in May’. Assets that have potential of growing through the drill bit. Or assets backed by a management team looking at further acquisitions.
Several companies on my watch list fit this criteria. Two of which are familiar to those reading Caliber Comments: EnWave (TSX-V: ENW) and Tosca Mining (TSX-V: TSQ), both I believe are undervalued for the above stated reasons. However, a new company which has presented itself with a worthy asset is El Condor Minerals (TSX-V: LCO).
El Condor recently signed an agreement to purchase a copper-nickel deposit in Quebec. The Horden Lake project is termed as a ‘Canadian legacy deposit’, having been discovered in the 1960’s by a joint venture between Inco and Noranda. The much improved local infrastructure combined with increased metal prices has made this 43-101 compliant deposit a valuable mining opportunity for the company. The purchase price of what I am told is just a penny a pound for the indicated and inferred copper alone is very attractive, but with a deposit open at depth and with copper prices anywhere above $3 per lb., the project becomes an enormously profitable situation for El Condor.
My ‘back of the napkin’ calculations from the resource outlined in the 43-101 indicate that there is somewhere in the vicinity of $2 billion of copper in the ground and at $4.25 copper (today’s price) the mining operation would gross well over $1 billion dollars without adding in the nickel or precious metal credits. (platinum, palladium, silver, gold)
El Condor trades in the 15c range and looks to be excellent value with just an $8 million market capitalization. I have included their most recent news release and as usual have put my money where my mouth is … and have been building a position in the stock in this price range.
A larger more inclusive report on El Condor is forthcoming but I thought it best to inform you today in case the realization of what the company now has in their possession becomes more apparent to the market come July!
DR!
The head of Daimler AG recently said he expects the new vehicle market in China to reach 30 million units, which would be almost twice the size of the very best sales year in the former world’s No. 1 market, the United States. – Fortune Magazine May 2011