Tiddlers enjoy their day in the sun

TORONTO: Trying to fathom the depth and breadth of mining information on display at PDAC takes some time to get one's head around.

More than 70 countries are represented, there are 114 speakers, and about 650 companies have booths at the show.

Without being too flip it is entirely possible to walk the isles of the show and tour the world.

The majority of those showing their wears are small cap Canadian juniors. And at first blush their stories seem to be better understood and received than their southern counterparts. Certainly the share price ratings awarded to some of these juniors travel at a distinct premium when compared to Australian companies.

But the most staggering thing is the diversity of locations in which these companies are willing to explore and mine. Here's a quick spin of the compass, which shows three typical juniors exhibiting at PDAC.

Hudson Resources

Toronto Stock Exchange (venture) listed Hudson is exploring for diamonds in Greenland.

Started 1.5 years ago as a capital pool company it has a ridiculously low (by Australian standards) 8 million shares on issue and just C$600,000 in the bank.

It has a large land package (533sq.km 100% controlled and 765sq.km 80% interest) in the Sarfartoq region of the country. Sarfartoq is probably best remembered as the area Perth-based New Millennium Resources was exploring for tantalum.

President James Tuer said Hudson had journeyed to remote Greenland to discover a large volume kimberlite in what he thinks is one of the most prospective regions in the world.

"We like Greenland because it has a very stable political environment, excellent tenure regulations and no native land claim issues," Tuer said.

"We also have a superior kimberlite indicator mineral data set on Hudson property which is a good as or better than that found in the Lac de Gras region."

Hudson also puts a lot of store in the fact that Greenland's geotherm is colder than the one at Lac de Gras. In diamond exploration the higher the pressure, the lower the temperature, the better. If a cold geotherm occurs to great depths it helps preserve the diamonds as they are carried to the surface.

But apart from the unique location and numerous indicators of kimberlite Hudson is still short on tangible results. A sample program (just three samples totalling about 57kg) found 20 micro diamonds but the company is yet to drill any holes.

Tuer says the next stage is to raise more money and begin a broad reconnaissance drill program. What that will do to the share price is anyone's guess. However, already at press time Hudson has a share price of 37c.

Caledon Resources

Caledon is not Toronto listed but one of the new breed of explorers that has popped up on the Alternative Investment Market of the London Stock Exchange.

Spawned in March 2003, Caledon has been a standout winner for investors. It raised its money at 1p a share before gaining its listing on a moribund IT company. By Christmas the stock had zoomed to 14p on the attractive mix of China and gold. Adding to the mix is well-known Canadian promoter and executive chairman Stephen Dattels.

The company has five projects in the so-called "Golden Triangle" of China and all are small and undercapitalised past or current producers for the Chinese: Mojian, in Yunnan province (70%), Hengxian (70%), Gaolong (85%), Badu (85%) and Longtoushan (85%) in Guangxi province.

Caledon exploration director George Salamis said most of the mining to date had focussed on near-surface oxide material. Caledon plans to target proximal and more laterally extensive transitional and sulphide ores. All of the projects have proven sediment-hosted disseminated gold mineralisation with the potential to host much larger ore deposits than what is currently known.

"We believe the Carlin type gold districts in China are similar to those in Nevada," Salamis said. "The Chinese have really only scratched the service.

"It's not their fault, they've just had to undercapitalise in drilling because there has been no money for diamond drilling. Diamond drilling is as expensive as it is here.

"But what people don't realise is that there is a lot of relationship building built into this country. It took us seven years to put this together – and a lot of bouncing around in Jeeps on back roads.

"But to do business in China the relationships are as important as the exploration itself."

North Atlantic Nickel

Despite the confusing name (which will soon be changed) North Atlantic Nickel is in fact a TSX-listed gold explorer working in Mali.

Although it has no minable resources in that country the stock trades at C$2.30 giving the company a market capitalisation of about C$40 million.

Well funded with C$12 million in cash, NAN has acquired five gold projects in Mali which is now Africa's third largest producer behind South Africa and Ghana.

Mali is well known for the 11Moz Morila deposit, which is one of the lowest cash cost producing gold mines in the world (US$74/oz in 2002). In southern Mali NAN's Sinzeni, Foulaba and Dalakan properties cover geochemical anomalies with or without artisinal workings in similar geological environments to Morila.

In western Mali the company's Kantela and Diokeba projects tie on to the 20Moz Sadiola mine and cover the southeast trend of the Kofi formation.

NAN also has a nickel exploration property in Quebec containing an inferred resource containing 1.24Mt grading 1.8% Cu, 0.6%% Ni and 0.5gpt PGE but this now plays second fiddle to the gold.

Such is the fascination with NAN's Mali ground that in January this year respected Octagon analyst Julian Baldry put a "buy" on the stock at C$2.35 and 12-month target price of C$5.00.

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