SWITZERLAND (ResourceInvestor.com) -- In my essay “The Aurelian Bonanza and its potential role in the Junior Mining Bull Market,” I postulated that the market would be looking for the next junior exploration company to produce some drilling results in or close to the same class as Aurelian, and start a similar hausse on the junior metals market.
Etruscan [TSX:EET], based in Nova Scotia, Canada, could be about to become one of the hopefuls in this contest with their drilling results published today on the Diba property in Mali, West Africa. On the news, EET stock jumped almost 15%.
But first, here’s a bit about the company. Their home page has the following summary of their mining and exploration activities.
“Etruscan Resources Inc. is a diversified Canadian mining company that has been exploring for gold and diamonds in Africa for over 12 years. Today, Etruscan holds one of the largest strategic land positions in West Africa covering over 8,400 km² in the prolific gold belts of Mali, Niger, Burkina Faso, Côte d'Ivoire and Ghana. The Company is also active in diamond exploration and production in South Africa. Etruscan's interests include operations that produce gold and diamonds together with advanced stage projects and earlier stage regional exploration opportunities.”
Etruscan near-term growth:
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Gold production profile from three advanced stage gold projects;
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Gold production of 140,000 ounces per annum by 2008;
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Gold production fiscal 2005: 36,908 ounces at $247;
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diamond production expanding in proven diamond district.
“West Africa's exploration history is in its infancy with first generation discoveries - second generation discoveries await,” according to the company.
EET has C$116 million shares outstanding fully diluted, and a market cap of C$388 million at its quoted price in Toronto of C$3.35 at the close of its last trading session 30 June.
On 5 June, EET reported they had made a “very significant new gold discovery” in Mali. Since these reults were based on Auger drilling to a maximum depth of 30 metres, they caused some interest and a modest rise in the share price, but the market awaited the first rotary air blast drilling results, capable of giving more accurate high grade results to greater depths than auger drilling.
The RAB results published today on the first two holes are very promising, (good grades and intersections) if somewhat frustrating, because the holes stop in mineralisation at relatively modest depths (63 and 69 metres). Highlights include:
So the next stage must be to get a diamond core drill to the site and drill down to several hundred metres accross the whole anomaly to assess the size of the deposit. (The first two holes are the appetiser, but when you are hungry you are longing for the main course.)
Conclusion
The purpose of this short note is merely to provide a headsup to precious metals investors of Etruscan’s potential in Mali, which looks set to become the star of their properties in West Africa. We can look forward to ongoing results over the next few months and await with baited breath whether it turns out to be world class or not.
EET shares closed at C$3.85 today, up 50 cents - nearly 15%.
Disclosure: The author has been a shareholder of EET for several years. Everybody should note the particular risks of investing in exploration companies associated with extreme share price volatility after the publication of exploration results.Readers are advised that the information contained herein is issued solely for information purposes and is not constructed as an offer to sell or the solicitation of an offer to buy. The opinions and analysis included herein are based from sources believed to be reliable and in good faith but no representation or warranty, expressed or implied is made as to their accuracy, completeness or correctness. Readers are urged to consult with their own independent financial advisors with respect to any investment. All information contained in this report should be independently verified with the companies mentioned.
