Having been asked about American Eagle (AE.v) and its Nak copper/gold prospect on a couple of occasions in January, the mail received from reader MS was enough to tip the balance and include a heads-up note on the stock in IKN715, dated January 29th. Below is most of that article (the intro paragraph was just blahblah) and since publication, the share price has only gone one way. For those in the same position as your author, i.e. watching AE, that can only be a good thing. If the next holes come out well there’s now every opportunity to pay under 20c even after any positive market reaction. Here’s the price chart then IKN715 excerpted:
Thoughts on American Eagle (AE.v)
The fun began in early November when AE ran this NR (23) with this headline:
American Eagle Drills 125 m of 1.02% Copper Equivalent from Surface within 851 m of 0.33% Copper Equivalent in maiden drill hole at NAK
And after closing a $2m placement on Monday 23rd (10m units at 20c a pop, one unit = 1 share + ½ warrant at 30c) (24) AE announced its next interesting hole on the 25th, here’s the NR (25) title:
American Eagle drills 527 metres of 0.45% Copper Equivalent from Surface, including 185 metres of 0.74% Copper Equivalent
Another strong assay and, while we’re peppering you with links, AE’s dedicated page for NAK core gallery photos is well worth a visit (26). All good so far, but the prompt for this note in Market Watching came later that day when subscriber and occasional mailer ‘MS’ dropped a line to mention that he’d read a post on a bullboard from someone he’s respects and trusts, calling AE a pump and dump job. Now, my tolerance for bullboards and social media is notoriously low (please see today’s final bullet points section for slightly more on that subject) but, when I get a message from someone of MS’s calibre (he’s a sharp investor and knows his mining) and he talks up his own messenger, I pay attention. As a result, I have a couple of things to say about AE at NAK:
1) There is a small historic resource at NAK, it’s true that it’s been picked over by other companies over the year and it’s also true that AE has “twinned” some of the holes previously drilled at the property, but the plan these days is different from days of yore. I’ve learned that AE picked up NAK at the behest of two professionals, geophysicist Steve MacMillan and the now deceased geologist Gary Artmont. They worked together, re-interpreted the geophysics and geology at NAK and came to the conclusion there was a deeper target to hit at the property so, after a couple of years of persuasion, Ore Group picked up the concession.
2) The plan has been to drill through the shallower-laying mineralization but this time, the prize they target is the deeper mineralization mooted by Macmillan and Artmont but largely ignored by previous operators at the site. So far at least, the theory promoted by the enthusiastic duo has played out largely as they envisaged and it’s fair to say that the long intercepts returned to date would not have happened without their recent re-interpretation work.
3) All that said, I’m still not convinced AE has a live prospect on its hands, but we should get a couple of big clues in the near future. This drill plan (above) highlights the next two holes scheduled for assay, NAK-22 005 and 006, which should be published soon and I’ll be watching carefully for good numbers from the sections of the drill core inside those red boxes. If AE has something at its current low-ish grades, it needs to add tonnage and that’s what the next two holes may indicate. Equally, the company theory also considers the possibility of a higher grading zone at depth and if they find something with better grade, this company may have a real live large and economically valid porphyry copper/gold discovery on its hands and if so, its current market cap will be consigned to history. So the bottom line is that I’m watching AE these days, not only for its connection to ORX but also because the next two holes may turn it into a potential trade in its own right.
4) And to wrap up these notes, I’ll state for the record there’s no real reason to suppose AE is a pump and dump story on its corporate plan, its management, its drill programming or its results to date. What’s more it’s not my idea of a P+D on its price chart and will quote my own reply to MS on that subject:
I see no real reason to suppose a P+D. Volume soared but so did the price and the price action since then is not P+D-ish, either. Fairly classic re-trace from overbot (and now a financing). That the financing closed before these latest results is also positive.
I don’t believe anything I read on bullboards. I take views into consideration, but that’s all.
Bottom line: Watching AE.v and not at all worried about it being a con job.