Eric Coffin Talks About Almadex, San Marco, and Vendetta

On my radio show last week, Eric talked about three of “our picks” and they are our picks, thanks to Eric’s initial research. I want to pass along in writing some of Eric’s comments regarding Almadex Minerals, San Marco Resources, and Vendetta Mining Corp. You can listen to my interview with Eric here:­taylor20170801-3.mp3.

Almadex Minerals Ltd. (Trades Toronto AMZ/USOTC AXDDF; 47,950,369 shares @ US$0.90 = US$43.2 million market cap) – We have been reporting on some good drill results from the Norte Zone on the company’s copper, gold porphyry target named El Cobre. Eric noted that it is likely that hundreds of millions of tonnes of lower-grade material has seemed likely but more important have been the higher grades of 1+g/t gold

material. And in talking to management, Eric is of the impression that they think higher-grade areas are looking as if they will hang together. That’s important because it may bode well for higher grades early in a mine life that enhances present value and provides a quicker return of capital.

But the Norte Zone is not the only promising target on the El Cobre Copper-Gold Porphyry System. Management is drilling on the Encinal Zone where some new areas of porphyry mineralization have been noted. But Eric told me on my show that he is most excited about a newly discovered porphyry outcrop known as the Ray Tembrillo Zone, south of the Norte Zone and east of another target named the El Porvenir Zone.

Eric believes, with good reason, that there could be two or three near-surface deposits, and based on his discussion with management it seems that, as with its previous success, management will focus almost all of its time and financial resources on this one project. That means we can expect Almadex to start vending out more of its sizeable portfolio of exploration properties because it simply cannot be everywhere at the same time.

Eric also noted because of prior successes, Almadex has several royalties, one or two of which are expected to soon start to drive some cash flow to the company in the near future. It has a 2% NSR on the Ixtaca Deposit located near Norte. Discovered by Almadex Minerals management, it has a gold-equivalent resource, 97% of which is in the M+I category of 3,522,000 ounces. With gold at $1,150, a PEA showed an IRR of 40%. It holds a 1.5% NSR on the Caballo Blanco Deposit, in Mexico that this same management team discovered. It is currently being advanced toward production by Candelaria Mining Corp.  This project has a resource of close to 1 million ounces of gold and approximately 4 million ounces of silver. A 2012 PEA calculated with gold at $1,200 revealed an IRR of 37.5%. And it has a 2% NSR on the Elk Deposit in B.C., which is now owned by Trek Mining Inc.  That project has a resource of 211,900 grading 6.32 g/t in the M+I category and 209,600 oz. in the Inferred category.

Eric stated and I agree that the company is getting zero value for its royalty assets. Most importantly this is a company headed by a very honest, hard working, and competent management team with a proven track record. Eric has helped me remember why I personally own shares of this company and expect to do so for the foreseeable future.

San Marco Resources Inc. (Traded Toronto MN/USOTC SMREF; 56,051,832 shares @ US 0.18 = US$10 million market cap) – This stock has begun to move a bit lately. The news here is a new understanding of the property’s geology. Previously, it was viewed as a shear zone and indeed some high grades have been observed along the shear zones. But what has management excited now is the realization

that the property hosts a high sulfidation/intrusive deposit, which has been verified by the first couple of holes drilled. (See photo below.) Eric noted that these kinds of intrusive deposits are difficult to figure out but they tend to be of very large size. He recently reported in his letter that the smallest such deposit he found hosted something like 4 million ounces of gold and the largest was something like 20 million ounces.

Eric noted that when he visited the company the other day in Vancouver, management was on the phone talking to a couple of geologists who are experts in exploring the high-sulfidation/intrusive targets. No doubt management will be seeking their expertise in helping to gain a geological understand of Chunibas geology to ensure efficient drilling programs going forward.

Eric also talked about the company’s 1068 Project, which is located nearby and is also a very exciting target. The 1068 Project is a multi-phase porphyry system with evidence of gold, silver, and copper. In part, based on a massive litho cap that lies over the porphyry, it is believed to be a very large porphyry system. As Eric noted, this is a company managed by a level-headed, prudent team with exploration skills. They will weigh their alternatives and take these two projects forward as far as they can in optimizing shareholder value. This company’s market cap is still a miniscule $10 million. Imagine what a major discovery could do in terms of percentage gains for this company. Personally, I’m a happy camper with my holdings, which are up about 42% since I added this name to this letter.

Vendetta Mining Corp. (Traded Toronto VTT/USOTC VDTAF; 107,916,491 shares at US$0.23 = US$25 million market cap) – Based on Eric’s views, if they are correct, this could be a huge winner from its current price. Despite some very good drill results and good prospects for outlining a deposit of 15 million tonnes of high-grade lead/zinc mineralization from the company’s Pegmont Deposit in Queensland, Australia, the market has basically yawned at the results. That could be a big mistake because a back-of-the-envelope calculation in a what-if scenario suggests the deposit could have an intrinsic value of 5 to 10 times this company’s current market cap. What makes this story especially compelling is the fact that it is located very near two or three lead/zinc mines that are running out of ore. Eric said at a recent Metals Investor Forum that he thinks Vendetta will be a takeout target before the end of this year. Given prospects outlining that critical 15-million-tonne lead/zinc deposit at Pegmont and a potential competitive bid from the two or three neighboring mines running out of ore, it is my sincere view that this almost entirely unrecognized stock could provide us with some very big gains, which is why I have chosen to add this to my personal holdings this week. And I have not even mentioned a very promising nearby copper porphyry target that Eric talked about in my interview with him. You can listen to that interview, here:

About Jay Taylor

Jay Taylor is editor of J Taylor's Gold, Energy & Tech Stocks newsletter. His interest in the role gold has played in U.S. monetary history led him to research gold and into analyzing and investing in junior gold shares. Currently he also hosts his own one-hour weekly radio show Turning Hard Times Into Good Times,” which features high profile guests who discuss leading economic issues of our day. The show also discusses investment opportunities primarily in the precious metals mining sector. He has been a guest on CNBC, Fox, Bloomberg and BNN and many mining conferences.