Billionaire Eric Sprott Builds
Position In Gold Mine
Kerr Mines (OTC: KERMF / TSX: KER)
Fellow Gold Bugs,
The precious metals market is ripe, and the opportunity to profit in gold stocks could not be better. Gold is positioned to hit new highs in the near-term, fueled by expectations of prolonged negative interest rates. We all know what that means...
The stage is set for a new gold bull market. Gold exploration could enter the highest level of activity in decades.
The current environment makes for a perfect opportunity to invest in an undervalued gold play, and I've located one of the best you'll ever come across, Kerr Mines (OTC: KERMF / TSX: KER)
We're not the only gold bugs who've shown an interest in Kerr Mines, as none other than precious metals guru Eric Sprott holds a 9.4% position.
If there's one thing you can say about Sprott, it's this: He's a savvy gold stock investor.
A Bonanza Opportunity Arises in Arizona Gold Country
Kerr Mines (OTC: KERMF / TSX: KER) is currently advancing the fully-permitted, past-producing Copperstone Mine project.
Copperstone is a high-grade gold project located along the Walker Lane mineral belt in mining-friendly Arizona. The project demonstrates significant upside exploration potential within a 12,000-acre land package that historically produced 500,000 ounces of gold.
The focus for the Company is to define and expand current resources, and to strengthen the mine's economics en route to a production decision.
The Copperstone property is fully permitted with extensive infrastructure in place, meaning Kerr Mines has a 450 ton-per-day mill already onsite and the tunnels going down to the high-grade gold ore are already there.
Electricity and water are there too. In other words, the infrastructure which can cost many millions of dollars to setup already exists at the site, so the cost to get Kerr Mines to production is relatively low...much, much lower than a greenfield project.
So how much gold is there you ask? There are 942,000 tonnes of Measured and Indicated historic gold resources with a grade of 10.3 grams per tonne. That's some high-grade gold!
On the Inferred side, there are another 335,000 tonnes of historic resource with a grade of 12.2 grams per tonne. That's in the soon-to-be further explored 'South Zone,' which has great potential in itself.
In the Proven and Probable category, Kerr has 910,000 tonnes with an average grade of 8.8 grams per tonne. That's some serious potential profits right there. Now you can see why billionaire Eric Sprott got his checkbook out and bought into the project.
The Value in Kerr Mines
There are many factors that determine the value of a mine. The grade of gold is obviously first in determining an investment into a gold stock like Kerr Mines. But with such high grades of gold, from Proven, Measured and Indicated to Inferred, the numbers are off the charts.
With a mill in place and tunnels already opened up to access the three previously untouched zones, plus the significant hit Kerr recently discovered in the South Zone, we're expecting a move into production next year. In fact, the feasibility study needed to go into production is expected in the fourth quarter of this year.
All in all, Kerr Mines (OTC: KERMF / TSX: KER) could be on to an out of the park home-run here.
Based on the market cap and share price of other peer gold mining companies, you can see why many people consider Kerr Mines to be extremely undervalued at these levels.
Let's look closer at an apple to apple comparison between KERMF and another peer company...
Wesdome Gold Mines (WDOFF) is trading at around $2.35, with a market cap of some $240 million. The production estimates per their website are between 52,000-58,000 gold-equivalent ounces per year.
Kerr Mines (OTC: KERMF / TSX: KER) has similar production projections at 40,000-50,000 gold-equivalent ounces annually, but is only trading at $0.135 with a market cap of just $26 million.
And that's not even taking into consideration Kerr Mines' other properties. Per their website, they have significant interests in three more large properties.
With the potential of around one million ounces of gold in the ground, the birth of a new discovery could pay off huge for early shareholders of this tiny gold stock. At its current price (trading around $0.13 on the OTC and $0.19 on the TSX), Kerr Mines could be tremendously undervalued.
Kerr Investment Highlights
• Past producer, fully permitted
• Advanced-stage development company
• Existing resource with significant exploration upside
• Safe, mine-friendly jurisdiction
• Strengthened board and management team
• Restructured debt into friendly hands
• Supportive shareholder group
• On track to complete Pre-Feasibility Study in Q4 2017
Existing Infrastructure
• Underground mine development in place, access and utilities
• Processing facility and 450 tpd mill
• Tailings storage facility with capacity for planned re-start
• Power and water distribution systems
• Surface buildings including assay lab
• Roads and access to surface exploration sites
To your success,
Financial Trends
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