We are happy to once again present three promising junior miners. We had a short interview with François Perron, the CEO of Golden Goose. Wildcat has an increadible resource estimate, while Woulfe is valuated rediculously low by the market.

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Golden Goose Resources, Inc.

Company Statement

Golden Goose Resources is a Canadian junior exploration company engaged in the acquisition, exploration, and development of resource properties. The company owns eight mining properties in Quebec and Ontario, and is currently focused on the 100% owned Magino gold project in Northern Ontario.
The company recently reported the final results of the winter drilling program on its Magino property near Wawa, Ontario, Canada. Several higher grade areas were intersected including a new zone discovered in the volcanic rocks in the footwall to the deposit. The program, which started in November 2009, consisted of 14 diamond drill holes totalling approximately 4,000 of drilling around the Magino resource envelope. Results include 4.5 g/t gold over 2 m from 51 m in hole 10-4.metres
GGR plans to return the mine into production and to use existing assets, infrastructure and properties as a base for further growth. Conceptually they are targeting production of 50,000 oz/annum. We have a limit-order at C$ 0.25.

43-101 resource as of 04/30/2009


Category Tonnes Grade (g/t Au) Ounces
Measured resource 222,900 5.97 42,749
Indicated resource 1,869,000 6.83 410,440
Total Measured and Indicated resources 2,091,900 6.74 453,189
Inferred resources 5,828,800 6.29 1,178,124

At a cutoff grade of 3.0 g/t Au, minimum width of 1.5m

Question & Answer Interview

On Monday April 12th, we had a clarifying chat with François Perron, CEO of Golden Goose.
Their scoping study, which they planned to release before the end of March, is due in a few weeks from now, as they are now finishing the investigation of some parameters. You can read the very short Q&A interview below.

We estimate the start of production could be in 2013, do you agree with that view, or are we too optimistic here?

I tell people I expect 3-5 years to productions (yes, 2013 may be too optimistic).

Is there a possibility to use the capacity of a nearby Richmont-mill to reduce your own capex? Are you already in talks to negotiate a toll-milling agreement?

We have had normal discussion with them, and view them as a constructive neighbor. As for their mill, our understanding is that it is presently operating at full capacity.

With the latest (great) winter drill results, do you foresee a new resource estimate coming out?

Thanks for noticing, it’s too early for a new resource, the drill program was designed to find new areas so we tested close to but around the current resource. We found new mineralized structures and a better understanding is giving us new modeling info and further potential. Even the next drilling will be to expand our understanding aggressively. Once we unlock the structure it becomes worthwhile to drill, we don’t need to find more of the same, we need to find better ounces as the current resource is large enough. To find better ounces, we need to drill iteratively. Drill, learn, test, learn some more and so on.
Those good intercepts we are investigating are approximately 4x times the resource average on a gram-meter basis, our hope would be to identify zones that could materially change the startup economics.

Thanks to your high-grade deposit, we are estimating cash costs at ± 425 USD/ oz. Is this too optimistic?

Our neighbor is operating at approximately 650 usd/oz, use that until we can show otherwise.

As for the complex structure of your deposit, aren’t you afraid of an ATW Gold- scenario? They had to stop production as they encountered a complete different mineral structure in the ground than they expected?

It’s only a problem if there is no gold. More seriously, two things comfort us; firstly, this deposit produced 100,000 oz in 3 years in 1988-92 at $400/oz so we are pretty sure the gold is there, not easy but there, secondly, part of the plan of going to production will involve dewatering the ramp for infill drilling and a bulk sample (going slower to make it ‘surer’).

I was wondering if you could give us an update on the cash position of the company?

Last public information indicated $2,000,000 plus, since then I have drilled 4,000 m at $100/m plus burn of 100k per month approximately. This is an exploration company our mandate is to explore, we have cash, Nemaska securities (4.2 million shares) plus a debenture (1.0 million) so we can last more than 12 months without doing anything.

We are keen to follow some of the concepts we are in the process of elaborating. This will require additional financing and we believe current shareholders support the idea of making the project advance. We always have several scenarios because financing is never certain. GGR does not need to finance at any cost but has plans to deliver value for each financing scenario.

With a market capitalization of only 12.5M fully diluted, the market is heavily discounting your company and deposit. Do you have a logical explanation for that?

1. The market is discounting many projects as the junior space is moving down on average. The market cap of GGR was more than 20M, 60 days ago, since then we have released good drilling and progress. The stock price will do what it does over the short term when there are more sellers than buyers.

2. I don’t think its the current management team…

3. The Magino mine was in production from 1988 to 1992 and was shut down because of difficulties. Cash cost of $400 with the gold price at 400 does not make for easy operating conditions. The reputation of the deposit is there and we have not changed the name so people recognize it and attach a stigma to it. (the fact that gold was less than 400$ is less important in peoples’ memory…)

4. Actually I think that it may also be related to the fact that the project is not progressing quickly enough from what it used to be. So far, we have deployed funds balancing value creation with dilution, in that context we get no reward for trying to protect value by not diluting excessively before warranted by the improvement of the knowledge of the resource.

Thanks for the short but clarifying interview!

You’re welcome.

Wildcat Silver Corp.

Why Electrolytic Manganese (EM)

Wildcat Silver Corporation is a Vancouver-based mineral exploration company with an 80% interest in the Hardshell property in Arizona. Hardshell hosts silver, lead, zinc and manganese mineralization.
The Hardshell property is located about 80 kilometres southeast of Tucson, Arizona, approximately 13 kilometres north of the U.S. border with Mexico. The property is 100% owned by Arizona Minerals Inc., which is 80% owned by Wildcat Silver.
Fully diluted the company has 109.5M shares, so the Fully Diluted Marketcap at C$0.54 is only 59M CAD, for a rough in-the-ground value of 11 BILLION dollars (Manganese calculated on 1 USD/lbs, but if the company decides to produce Electrolytic Manganese, the upside potential is tremendous). With these grades, we see silver production at a very negative cash cost. A negative point would be that Hardshell is their only project.

We first bought Wildcat Silver on January 11th at C$0.47, and averaged down at the end of January at C$0.36 (see our alerts), but with this resource update, we will continue to buy on the dips. This company won’t be anonymous much longer.

The New Resource Estimate

Wildcat Silver (WS.V) reported a new resource estimate on its owned Hardshell deposit. After seeing the new resource estimate, we are extremely confident this company will reach our target, and we hope it’ll appear on some radar screens soon!
Their attributable share of the project (Indicated + Inferred resource) is as following:

96.7M oz Silver
6.73B lbs of Manganese
1.45B lbs of Zinc
1.14B lbs of Lead

What to expect in the future?

Somewhere halfway this year, Wildcat hopes to have a new Preliminary Economic Assessment ready. We are
100 km southeast of Tucson; 13 km north of Mexico looking forward to it, as the PEA will probably use higher commodity prices than the last one (and that one already yielded a NPV of 450M, and an IRR of 32%), but we are also hoping

– the company will now build a mill with a higher capacity than anticipated in 2007

– the company will decide what to do with the manganese. If they want to produce Electrolytic Manganese, and their metallurgical test succeed, this company could really be a cash cow.

Woulfe Mining Corp.

Company Statement

The Company’s current projects include the Sangdong tungsten-molybdenum mine, historically, one of the largest tungsten mines in the world; the
Muguk gold-silver mine, formerly South Korea’s largest gold producing mine, as well as a number of other properties with significant known mineralization and excellent regional potential
Woulfe Mining attracted our interest after the recent drop. Last month, they revealed the economics of their Tungsten project in South-Korea.

– IRR of 26.4% in the base case scenario
– CAPEX of 290M
– NPV of 462M

Warning: the base case scenario anticipates APT-prices of 250 USD/ metric tonne, where the prices now are 220 USD/tonne. So the base case scenario already is anticipating higher Tungsten-prices.


Located south-east of Seoul, the Sangdong tungsten-molybdenum mine was one of the world’s largest producing mines between 1947 and 1992. The mine closed prematurely in 1992 due to low metal prices. The Sangdong Mine had historical production rates of 600,000 tpa mainly from the six-metre thick Main Vein. Drilling by KORES during 1980- 1987 discovered a deep molybdenum deposit below the remaining tungsten skarn resources.
Both tungsten and molybdenum prices have increased significantly since the mine’s closure. Price increases are based on favourable supply
and demand balances, making this a highly attractive deposit for re- evaluation.
Tungsten markets are tightening as China has restricted exports and imposed taxes. APT demand is increasing and the supply side has barriers to development. Sangdong is well positioned to be the
worlds next large tungsten mine as it has infrastructure and underground development in place. Sangdong is well placed to be commissioned in 2013 which will coincide with the high tungsten prices as market friction and barriers that other projects have towards development.

So why is the stock dropping?

Simple. Back in December 2009, the company issued 82M shares as part of a private placement. The hold period ended last Sunday, so when the market opened on Monday, the buyers of the Private Placement started to drop their shares in the open market. The private placement was done at C$0.08 so there still is downside potential, but we start to buy shares now, and will continue to buy more if the stock price drops further. We also anticipate a new capital raising within the next few months.

Why we are buying Woulfe

At current scenario, and after a severe dilution to 625M outstanding shares (currently: 250M fully diluted), operational cashflow per share comes in at C$0.14. So right now, we are trading BELOW the operational cashflow, even after a dilution of 150%. Besides the Sangdon Tungsten- project, Woulfe Mining also holds a 100%-interest in the Muguk Gold project, an earlier producing deposit with non-NI 43-101 compliant resources (NI 43-101 compliant recalculation currently underway) of 1.4M tonnes at 13.5g/t gold and 72.8g/t silver.
We are buying Woulfe Mining with a limit order at C$0.12.

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