Home' Australian Resources and Investment : March 2010 Contents 36 • MARCH 2010 • AUSTRALIAN RESOURCES & INVESTMENT
WYO WELL, WESTERN AUSTRALIA
Wyo Well Project consists of a single Exploration Licence E28/1294
located approximately 90 kilometres east-northeast of Kalgoorlie and
immediately east of the historic Kurnalpi Gold Mining Centre known for
its copper-gold discoveries.
Previous drilling and surface geochemical sampling programs have
been performed in the area with 72 RAB drill holes for 2276 metres.
Promising results have been achieved with two drill holes returning
greater than 1.0 g/t Au results with a best result of 4m @ 2.26 g/t Au
located at the western end near the edge of the tenement which is also
in the vicinity of old workings located on the adjacent tenement.
ElDore will also focus on an area where past exploration has
identified an area containing a highly anomalous Nickel(Ni)-Copper(Cu)-
Platinum(Pt)-Palladium(Pd) geochemistry of surface rocks. Historic
drilling completed failed to explain the anomaly however there will be
further drill testing to explain Ni-Cu-Pt-Pd as well as gold anomalies.
“Previous drilling has created a solid base for further exploration
work on the tenement”
ElDore intends to raise up to $5m through the issue of 500m EDM
shares @ $0.01 per share plus 1 option for every 2 shares held @
$0.03 cents expiring December 2012. ElDore will also be issuing 150m
listed options @ $0.001.
The company’s cash balance should sit at $5.1m following the
raising. This will provide ElDore with funding for working capital and for
new projects subject to shareholder and regulatory approvals. Further
capital raisings are likely to be required within the next 12 months as
exploration activities are ramped up.
Junior resource explorers and producers possess higher operational and
exploration risks compared to bigger and more established peers.
Juniors have yet to set a track record, begin production and commence
ElDore’s exploration risk is somewhat mitigated compared to other
junior players in the industry due to the farm out agreements it has in
place. The risk is reduced, however so is the potential return on the
The main risk for ElDore lies in the drilling of the projects which are
still in its early stages with historic drilling and soil/rock chip sampling
providing information. Bad exploration results will negatively impact
the share price as future asset and earnings potential would come under
The political stability of some countries in the West African region have
come under question however Burkina Faso’s government is ensuring
that it remains an attractive proposition for foreign mining companies.
The Mining Act was designed to encourage investment in its mining
industry. The increasing number of companies mining in Burkina Faso is
a reflection on the perceived risk/return on projects there however any
civil or political unrest can cause a negative impact on the share price.
ElDore does not generate any revenues and therefore relies on external
capital or farm out agreements to fund its exploration activities. If for
any reason the company cannot raise new funds for further
development, its share price is likely to suffer.
THE BULLS & THE BEARS
THE BULLS SAY
3 Management looking to capitalise on high precious metal prices by
focussing on exploration targets with the potential to be significant
3 Previous soil and rock chip sampling have provided enough
confidence for further drilling to commence immediately.
3 The teaming up with highly regarded groups such as Predictive
Discovery and Pacific Niugini adds credibility and confidence to the
exploration efforts and de-risks the projects.
3 Peers exploring in PNG and Burkina Faso have discovered world
3 Drilling planned for 2010 will be a key share price driver with first
results due within the first quarter and results from PNG in first
THE BEARS SAY
3 Disappointing exploration results will have a negative impact on
the share price - PD is allowed to abandon exploration program if
results are poor.
3 Projects are at the early stages of exploration therefore investors
need to be patient for this story to take shape.
Imran Valibhoy, Sven Restel and Tim Morris
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