Colossus Minerals: Why I Should Have Listened

Four times in the last few weeks I've been presented on a platter with the name Colossus Minerals (CSIMF.PK), and four times I looked at the evidence and dismissed it virtually out of hand. That was a mistake...a big, big mistake. Here's why:

Strike One: The Midas Letter written by James West on March 14 made a really big write up of it, going into the history and potential of its Brazilian 'Serra Pelada' (bald hill) project. Here's the link, so go look for yourself. I read it. Ignored it. Dumb, dumb Otto.

Strike Two: A switched on reader of this blog by the name of Andy mailed me on May 20th with the same newsletter write-up and said it was his idea of a top junior. I wrote back saying something like, "If it's too good to be true, then it is." The stock was trading at $1.91. Dumb, dumb Otto.

Strike Three: The stock was featured in this SeekingAlpha note written by Michael Pollick (aka shootfirst at silicon investor). It caught my attention because Pollick made special mention of the upgraded management team, something I normally pay a lot of attention to. "Hey..Colossus is putting together a world class team", I thought, and then promptly did nothing about it. Dumb, dumb Otto. By the way, Pollick's note is also worth reading because he links a (now easy to say) must see video on the property. Full kudos to the author.

Strike Four: The stock was featured in the smart Canaccord "Morning Coffee" publication on Tuesday. I glanced at it, nothing more. Dumb, dumb Otto.

So what's to regret? This press release on Wednesday morning that moved the stock up over 32% on 15X average volumes. The PR includes some of the best drill results seen since the Aurelian FDN property exploded on the world, and makes Colossus a simply mouthwatering prospect. There is a lot to love about the news, and a full read is recommended, but highlights include (from the PR):

 - SPD-002 intersected

46.72 metres @ 24.11g/t gold, 9.04g/t platinum and 11.57g/t palladium

(50.95g/t gold equivalent(ii)) plus 14.65 metres @ 22.51g/t gold, 4.56g/t platinum and 5.01g/t palladium (35.64g/t gold equivalent(ii))


- SPD-004 intersected

53.50 metres @ 5.35g/t gold, 2.51g/t platinum and 4.01g/t palladium

(13.20g/t gold equivalent(ii))


- Both holes exhibit very high grade Au- and PGE-rich subzones

- Drilling to date shows continuity of high grade gold-platinum-palladium mineralisation along 100 metres of strike length and vertical intervals of more than 50 metres in the Central Mineralised

Zone up to 260metres southwest of the historic Serra Pelada open pit.

To give a rough idea, 46m of 50g/t gold equivalent is rock is worth around U$3,600 per cubic metre with gold at $900/oz. Interested yet? Well if not, think about the previous drill holes that have returned over 4,000 g/t gold at the site (yes, four thousand).

This is the five day chart of CSI, and as you can see there was all the $2 stock you wanted last week.

Yep...that's an 80% gain gone begging. DOH!

So I therefore officially want to be counted as one of the people who was stupid, doubting, cynical and dead wrong about ignoring Colossus. This is now one hot junior. Congrats to those who saw the light before this catchup-playing Otto.

Company: Colossus Minerals (CSI.to)
Website: www.colossusminerals.com
Shares out: 42 million
Share price: $3.55
Mkt Cap: $149m approx
Cash at bank: $20m approx

Disclosure: No position in Colossus yet.

 

Comments

[silveraxis]

What's dumb is these holes merely twin historical results and confirm the grades already known in this Central Zone from prior drilling. This is not a blind discovery like FDN, and it was a no-brainer the stock would become "hot" when the *unsurprising* drill results were announced. A similar thing happened with a company called Southern Arc last year in Indonesia, and it may happen with another called New Oroperu in guess where? Another is International PBX in Chile. And Exeter again in Chile plus Argentina. You get the idea, the list goes on and on. It's dumb the market doesn't recognize these things even when under its nose, but I'm not complaining!

[Clavis]

Otto, just sit back and have a nice mug of tea (plenty of sugar though), remember it could have been the other way around!
That would have been a real headache.

[BlueScorpion]

Otto, maybe you're not so dumb after all. Did you miss this little gem from the Blackmont report?

"Exploration License 850425 at Serra Pelada is valid to 2010.
Although renewable for another two years, it is under the
discretion of the Department of Mineral Production
(“DNPM”). There is a chance the DNPM will not issue
a renewal to Colossus if needed. As well, if drilling and
sampling takes longer than anticipated there is a chance
a renewal will be denied. However, given the depth of
the technical team and their Brazilian experience and
connections, this risk is minimal."

2010 isn't that far off. Too many if's. Pass.

[BlueScorpion]

Another thing...at 100 hectares, what do you expect the annual production to be on a going basis? High grades, yes. But this is a low volume mine once it's up and running anyway you look at it just because of the small scale. I understand the hype, and the stock may do well from all the pumping, but focusing on press releases with stunning drill results can be a surefire path to losing one's hard earned dollars if you don't evaluate the whole enchilada. The term "fool's gold" may apply here.