Finally, an update on our newest investment, TSX listed Kootenay Gold. As our unit holders know, we rarely invest in new holdings in the Fund, and only ever do where we see real upside potential, couple with great value. Kootenay provides that, plus as the name suggests, a great deal of exposure to the less liquid and smaller Silver market.
As detailed in last month's silvery newsletter Kootenay is actively developing mineral projects in the Sierra Madre region of Mexico (a highly prospective Silver region) and a number of license areas in British Columbia, Canada. The company's flagship project is the former producing Promontorio Silver mine in Sonora State Mexico which already boasts a NI 43-101 compliant resource of just over 10 million ounces of Silver (plus 112.7m lbs of lead and 125.1m lbs of Zinc). However, as of 3 February 2011 the company updated the market in regards to its continuing 10,000 metre drill programme which it is currently undertaking on its flag ship project. The aim is to dramatically expand the current 10 million ounce NI 43-101 resource and it seems the company is doing just that.
All 15 of the company's most recent drill holes intersected consistent Silver grades over a wide spread area of mineralisation extending outside of the company's already large delineated resource. Most notably Silver values as high as 149g/t and 108g/t over 10.5 metres and 16.5 metres respectively were reported. It is clear that the current NI43-101 is significantly underwhelming and in light of this the company has already mobilised a second drill rig to now test the deposit at depth.
So, a few weeks on from having added Kootenay to our portfolio it is safe to say that we are happy with the rarity that is a new addition. We would not be surprised to see even more positive news reported to the market over the next quarter and almost without doubt an upgrade NI43-101 compliant 10 million ounce resource. We are patient (but excited!) holders.
Source: Ross Jones, James Faulkner UKAnalyst
