www.internationalmetalsgroup.com
With four different enterprises including in this June Alaska's newest producing gold mine, colorful entrepreneur Harry Barr has four separate Up and Comers, Pacific North West Capital Corp.(PFN.TO), Fire River Gold (FAU.V), El Nino Ventures ( ELN.V) and Next Gen Metals Inc. (N.V) with great promise in platinum/palladium, gold, silver and base metals in North America as well as an exciting copper/cobalt play in the Congo. For a daring opportunist who once had to put one of his earliest deals on his own credit card, resourceful Harry Barr is showing what one man's positive attitude and persistence over three decades can accomplish.
By Robert J. Flaherty and Brian D. Flaherty
Under the umbrella of non public International Metals Group entrepreneur Harry Barr continues to be an innovative leader in mining opportunities. For over 30 years he has specialized in corporate finance for new enterprises, project generation, exploration, feasibility and commercial development with major participants, negotiating win-win deals. That is why Barr and his team have completed over 35 contracts with the world's largest mining companies. In addition they have entered into 15 option/joint venture agreements with mid-tier miners and over 300 agreements with junior miners. Collectively the four current public companies within the International Metals Group have raised over $500 million in equity and option/joint venture deals. This furthered project development and increase shareholder values.
IMG does not invest itself in the companies and all investments by those in the group are made individually. IMG's purpose is to provide the empowering expertise of its "brain bank" and help the new enterprises grow to the production stage. Non publically traded IMG's four current member public companies share IMG resources, people, engineers and IR expertise in IMG's presentations around the world.
Harry's Four Micro-cap Metal Opportunities.
Presenting at the New York Hard Assets Investment Conference on May 9, 2011 colorful Harry Barr began by asking, "Anybody ever hear about us?"
A few hands shot up. Many more will in the future. Harry's IMG is currently nurturing four separate metals Up and Comers, all of which he claims are currently undervalued bargains.
Micro-Cap Opportunity One: Harry is President and CEO of Pacific North West Capital Corp. (PFN.TO-0.35) traded on the Toronto Stock Exchange. PFN is a mineral exploration company focused mainly on the acquisition, exploration and development of the platinum group of metals (PGMs) Platinum, Palladium, Ruthenium, Rhodium, Osmium and Iridium, and also precious and base metals mainly in Canada. Platinum Group Metals are found mostly in Russia and South Africa. PFN's River Valley deposit is one of the newest stand alone PGM deposits found in North America and Pacific North West Capital owns 100% of the discovery.
River Valley is a prime example of how Harry's deal making skills can add value to a new enterprise. In l998 Harry became excited about some grab samples and knew that he was on to something special. PFN took options on what is now its River Valley Platinum Group Metals Project near Sudbury, Ontario. A year later PFN then optioned the property to Anglo Platinum which had the financial power to commence exploration and with subsequent drilling prove up significant mineralization. Anglo Platinum continued to fund the exploration and invested over $22 million for a 50% stake in the joint venture.
Then in 2008 the global financial crisis raised fears of a new Great Depression and Anglo decided to conserve cash and put developing the project on hold. The price of platinum suffered a corresponding nose dive from $2,200 an oz to $860 and palladium prices plunged from at an earlier 2001 all time high of $1,100 an oz to the $220 range.
In April 2011 to unfreeze the project, Harry's PFN and Anglo closed a new deal where PFN acquired Anglo Platinum's 50% of the joint venture in exchange 12% of PFN's shares. Through this share ownership in PFN, Anglo can benefit on any future success of the River Valley Project and PFN is free to raise capital to determine economic feasibility and dramatically increase the value of the property.
That is exactly PFN's current strategic plan. "We have made one of the only stand alone discoveries of platinum and palladium in North America in the last 20 years," says Barr.
In June 2011 with the wobbly world economy still continuing to improve, the price of platinum is back over $1760 and palladium, which is in greater abundance at River Valley, over $700.
Why the recovery? "In between the green revolution became a global phenomenon, especially warnings about global warming and the need to reduce air pollution from automobiles," says Harry Barr. "So palladium prices have soared back and PFN has announced a brand new $5 million two phase exploration program. Platinum group metals play a big role in catalytic converters used to reduce air pollution by the automotive industry. The push for green energy has changed the platinum group metals industry. Now the BRIC countries (Brazil, Russia, India and China,) responding to environmental concerns have to put catalytic converters in their cars. And about 40% to 50% of platinum /palladium are used in them. Other PGM demand comes from dentistry, Chinese jewelry and electronics."
PFN's current River Valley Resource calculation is 30.5 million tons containing 935,000 oz of palladium (0.97 g/t), 329,500 oz of platinum (0.34 g/t) and 59,500 oz of gold (0.061g/t). At recent metal prices the retail value of these metals would be over $1.5 billion. So this is the attraction. Naturally resources will not be fully recovered and deposits must be proved up before their value gap now versus out of the ground can be closed.
There has been no drilling at the River Valley project since 2008 and Harry is excited to have it active again. He stresses PFN has a huge potential to expand the resource. The River Valley Property is over 9 kilometers long, but only a tiny portion has been drilled. Moreover, drilling has only gone down to a depth of 250 metres, but two other mining companies in the area have gone down over 1,000 metres and found deposits.
PFN's new $5 million exploration program will start at the top of the project and systematically drill down deep so it will expand not only in length but in depth. The first phase of this exploration began in early April with a combination of 3,500 metres of infill drilling and 3D IP surveying. Also some of the past deposits will be moved upward from inferred to indicated and measured categories dramatically increasing their values. New mineral zones also will be sought.
In the short term a new updated NI 43-101 resource report should be completed within one year. Preliminary economic assessment should be completed within 18 months and pre-feasibility within 36 months. "Production could be possible in 48 months," says Harry.
He is also pleased that two well known platinum industry veterans have joined IMG's advisory board. With further exploration and more definition of its deposits PFN's River Valley project could turn into a major find. Best of all, Sudbury, Ontario is Canada's premier Ni-Cu-PGM mining and smelting district, boasting the perfect infrastructure and community support for mining activities.
Here is tiny micro cap with major institutional shareholders. The world's largest platinum company Anglo Platinum owns 12%, North America's largest platinum producer Stillwater Mining, which recently purchased the platinum assets of Marathon PGM for $118 million, owns 7% and Toronto- based Pine Tree Capital owns 8%.
PFN also has some other arrows for its bow. Its Destiny Gold Project near Val d'Or, Quebec, one of the world's most famous gold and base metal producing regions, is under option. PFN can earn a 60% interest in the property over a four year period by completing $3.5 million in expenditures, paying $200,000 and providing 250,000 shares to Alto Ventures Ltd. A recent NI 43-101 reports 247,000 inferred oz and 364,000 indicated oz of gold. PFN also has a "Rock & Roll Pollymetallic Project in British Columbia and other PGM, gold, silver and base metal projects Quebec, Ontario, Saskatchewan and Alaska. PFN continues to look for new acquisition of additional platinum group metals and precious metals on an international scale.
PFN has no debt and over $8 million in working capital and securities. Recent share price: $0.35 fully diluted shares outstanding 94.4 million. Market cap $23.7 million.
Micro Cap Opportunity Two:
Even though you may be a geography student, you will never find the Fire River. "I hate the meaningless jumble of letters used for so many gold producers so I saved "Fire River Gold" until we needed a name for a new gold company," explains Barr. Actually, sheepishly he admits he still has a list of 30 other names he likes and they include some zingers.
By reopening and developing the underground high grade production deposit Nixon Fork Gold Mine, Fire River Gold Corp. (FAU.V-0.44) will become Alaska's newest gold producer in the summer of 2011.
When gold prices sharply fell in the l990s many mines began shutting down because they were losing money. These properties had plenty of gold but it could no longer be recovered at a profit. One casualty was the Nixon Fork Gold Mine in Alaska's Tintina Gold Belt. That meant opportunity to Harry Barr.
In September 2009 Nixon Fork was acquired and PFN still owns about 7% of its shares even after attracting development partners and raising $30 million in growth capital. From l995-2007 the project produced about 175,000 ounces of gold at an average grade of 42 grams per ton. (1.14 ounces per ton or 1.23 opt after additional silver and copper credits). The mining and processing facilities at Nixon Fork are permitted and bonded. The gold-rich copper silver deposit is known in the mining industry as "skarn". At Nixon Fork the higher grades are found in steeply plunging pipe-like bodies oxidized to depth of up to 350 metres below the surface. Oxidation of the system has resulted in both secondary copper and gold with high grades and a "nuggety" distribution. All permits and the facilities in place have a replacement value of over $150 million in U.S. dollars.
Operating expenses could be around $447 per ounce and with gold prices recently over $1,500 and $1,000 considered as an impenetrable price correction floor by many experts, the formerly abandoned mine now could become a bonanza.
Stepping back, Harry has chosen a new team. Richard Goodwin as President and R. David Russell as Chairman will transition Fire River from a junior explorer to Alaska's newest producing mine. Both are seasoned veteran mining engineers with years of operational experience.
Five River Gold is a fully funded start up with approximately $12.5 million in the treasury. This will ensure the project can overcome unforeseen difficulties and also fund operations between the lag of initial production and payment by the smelter or refiner.
The underground mine fleet has been rebuilt and new units are being added by this summer.
The other major facility at the site is the completion of the CIL cyanidation plant inside the mill, which will mean a higher percentage recovery of its deposits.
Fire River Gold is a near term production company with an experienced technical team focused on bringing its flagship project back into production in summer of 2011. The Nixon Fork Gold Mine is a permitted and bonded mine which include a 200 ton per day processing plant with a sulphide flotation separation circuit and gold recovery system. The mine also includes a fleet of surface and underground mining vehicles, two company owned Hagby diamond drills, a self contained power plant, maintenance facilities, drilling equipment, an 85 person camp, office facilities and a 1.2 km long air plane landing strip.
The old tailings promise some easy money with an estimated 30,000 recoverable ounces. The results of a Preliminary Economic Assessment for Leaching Historical Tailings at the Nixon Fork Gold Mine vary from a net present value of $3.3 million at $1,000 oz gold to $14.2 million at $1,500 gold. New tailings leaching costs should be less than $400 an oz.
While Nixon Fork Gold Mine is the central focus the team is also considering other avenues of expansion. One is the acquisition of near term or past producers as the new team is geared up more for production rather than exploration.
To quickly reactivate the project and save costs, a feasibility study has not been completed and there is no certainty the disclosed targets will be reached or that the proposed operations will be economically viable. That is the risk. The tantalizing reward is Fire River's own mineral resource estimates for the Nixon Fork Gold Mine are indicated resources of 128,000 oz of gold and inferred resources of 74,600 oz. At a recent retail price that gold would be worth $303 million on the street. Management also believes Fire River even as it produces and proves up its resources will also continue to expand.
Zero Debt. Cash $18 million, No Hedging. Recent share price $0.44 fully diluted shares outstanding 137.9 million. Market Cap $35.8 million.
Micro Cap Opportunity Three: Like the unpredictable current of the same name, El Nino Ventures Inc. (ELN.V-0.11) has been taking some strange turns but shareholders keep benefiting. It is a mineral exploration company focused on international base metal exploration currently in Canada, specifically two polymetalic (primarily zinc) projects in New Brunswick and a copper/cobalt project in the Democratic Republic of the Congo.
In New Brunswick, Canada El Nino has two projects. The largest is the Bathurst Mining Camp with 4,712 claims and a 10,000 drill metre program in progress. El Nino holds a 50% interest in an extensive base metal project located within the Bathurst mining camp where earlier drilling campaigns have been carried out on several historical deposits of lead, zinc and copper mineralization with the large claim owned 50% by ELN and 50% by Xstrata Zinc, a unit of the major diversified mining group based in Switzerland.
Subsequently El Nino shareholders and Xstrata should benefit from participation in a tri-party agreement with Votorantim Metals Canada Inc. Its parent, Brazil's Votorantim Group, operates in 20 countries, has over 65,000 employees and is the largest electrolytic -nickel producer in Latin America and one of the global leaders in the production of zinc, aluminum and steel. Votorantim may incur exploration expenditures of $10 million over a period of five years to obtain a 50% interest. It may increase its interest to 70% by spending an additional $10 million over two years. A $5 million, 10,000 metre drill program has just commenced. More new drilling activity increases the opportunity to increase existing value.
The other project within the Bathhurst Camp is the Murray Brook Project with 215 claims. El Nino has just released results from the Votorantim operated due diligence program in this massive sulphide deposit. In Murray Brook Project El Nino has provided notice to Votorantim Metals Canada that it intends to enter an agreement where El Nino could earn a 50% interest in VM Canada's position on the Murray Brook property which has copper, lead, zinc, gold and silver. It is 60 miles from the existing tri-party project.
But the reason El Nino stock has skyrocketed almost 300% from only $0.03 over the past 12 months was winning law suits in the Democratic Republic of the Congo. "All of my career I have avoided law suits," says Harry Barr who feels they are a waste of precious time and energy he could be using to find promising new properties or add value to existing ones. But he felt he had no choice but to go to court against a former partner who was claiming what El Nino felt it owned. Recently, El Nino has just won two big court ruling in the Democratic Republic of the Congo against this former partner.
Back in September 2009 Harry, a major shareholder, became El Nino Chairman and acting CEO when many of his long time friends who also were investors complained to him about experiencing difficulties with one of their partners. In an extremely difficult period Harry had to refinance El Nino and worked with his directors and team advance the projects in DRC and Canada.
Sufficient working capital was raised to stabilize the balance sheet, complete the geochemical program (which was positive) and to finance the drilling program which was slated for April 2011. Previously, the Kasala project had produced exceptional drill results which Harry believes demonstrated it is the beginning of a new major copper discovery.
"El Nino's objective is to utilize the people of the DRC's expertise, and blend that expertise with our technical and financial ability to develop our existing projects," says Harry." Going forward, our mandate is to acquire new projects and ultimately to create additional jobs and further educate the local communities that the project is located in and be environmentally responsible and respectful of the country. I believe the accomplishment of this corporate vision will also help grow the DRC's economy." Recently, Harry appointed metal veteran Colin Bird to assist in seeking and evaluating new project alternatives throughout Africa in base metals and gold.
Winning the law suits was important because the stakes are huge. El Nino's Kasala Project has made a significant copper discovery and also has identified two promising major parallel zones east of Kasala. The Kasala discovery is one of only a handful of green-fields copper finds in the last 10 years in the Central African Copper Belt. The four exploration permits that make up this project lay in very close proximity to significant copper resources being developed by such well known companies as Tiger Resources and Anvil Mining. This world renowned mining area is home to some of the richest copper discoveries found anywhere. El Nino hopes to announce their first phase of exploration there in the near future.
Zero Debt. Cash $2.5 million. Recent share price $0.11 fully diluted shares outstanding 180.4 million. Market Cap $9.9 million.
Micro Cap Opportunity Four: The newest International Metals Group public company under the IMG umbrella is Next Gen Metals Inc. (N.V-0.16) with a primary focus on silver, gold and base metal projects in North America. With a recent total market cap of under $4 million, Next Gen's near term objectives are advancing a high grade precious metals Silver Chalice Project in Alaska and moving the Fate Project with gold and base metals, Val d'or, Quebec to the drill stage and acquisition of advanced stage projects.
Why consider this tiny tot? Because New Gen is doing what Harry Barr has always loved to do. It is picking up properties near important finds and existing successful mines. Management and directors own 20% of the shares and institutional investors who admire Harry's knack for acquiring bargains near their bottom own another 50%. For those who like long shots this one has a good jockey and stable plus sophisticated investors.
Zero Debt. Working Capital $ 2.5 million. Recent share price $0.16 fully diluted shares outstanding 30 million. Market Cap $3.6 million.
CONTACT INFORMATION for PFN.TO, FAU.V, ELN.V and N.V
International Metals Group
www.Internationalmetalsgroup.com
www.pfncapital.com
www.firerivergold.com
www.elninoventures.com
www.nextgenmetalsinc.com
2303 West 41st Avenue
Vancouver, B.C. Canada V6M 2A3
Brian Windatt, Investor and Media Relations
Phone: 1-604-685-1870
