Tom Szabo

Colossus Minerals Is Brewing a Perfect Storm

To user211868, These is nothing magical or fraudulent here. Colossus is "merely" repeating the same results that CVRD got when they drilled back in the 80's and 90's. For example, hole FD0072 was 23m of 211g/t Au, 50.5g/t Pt, 71.5g/t Pd, including 3.34m of 1405.5g/t Au, 293.4 Pt, 441.7 Pd. CVRD got even better results from within the pit (since mined out). By the way, SPD006 has been drilled into the same area as CVRD's hole FD0072, so expect some fireworks when that hole is released, which will probably be late next week. Between now and then, I would expect the shares to trade between $2.50 and $3.50. Should the SP approach the lower end of that range, it probably wouldn't be a bad speculative bet as hole SPD006 could very possibly launch the shares to near $5 (where I would sell) for a quick double.

Longer term (as an investment), the main issue here is tonnage, which is probably why CVRD let the exploration license lapse in 2007. A rough conservative guess would be there is a couple million ounces of combined gold plus PGMs down there, which probably isn't enough to get a major excited, but could be interesting for a mid-tier producer. Figure $1,000 per ounce in gold/PGMs and that gets you a $2 billion deposit. The high grade, oxide nature of the ore (should be easy to process) could make it worth up to 25% on a valuation basis so there you have $500 million. Times 75% Colossus share is $375 million, less the approx. $150 million purchase price leaves $225 million, or about $3.40 per Colossus share. So the upside is not in drilling where CVRD has already drilled but in finding new zones of gold/PGMs (including above or below the central zone), which would be required to justify an SP above $4 or so.

Colossus Minerals: Why I Should Have Listened

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!