Gammon Gold New Greenfields Update!
More news today. Apparently Gammon is buying a new property in hopes of washing away the pain of shutting down their already in production mine. Here's the press release from the seller (Valdez).
Valdez Gold to Sell Its Los Jarros and Jarros Norte Properties in Chihuahua, Mexico to Gammon Gold
TORONTO, ONTARIO--(Marketwire - June 18, 2010) - Valdez Gold Inc. (TSX VENTURE:VAZ) ("Valdez" or the "Company") is pleased to announce that it has signed a letter of intent with Gammon Gold Inc. (GAM-TSX:GRS-NYSE, or "Gammon") pursuant to which the parties agree to negotiate in good faith a definitive agreement whereby Gammon will have the right to acquire Valdez' Los Jarros and Jarros Norte Properties (the "Properties") in Chihuahua, Mexico by making successive payments over a four year period aggregating US $2.5 million. The required option payments would be as follows:Option Payment Date Amount
Upon execution of the Definitive Agreement: US$ 50,000
12 Months after execution of Definitive Agreement: US$ 100,000
24 Months after execution of Definitive Agreement: US$ 250,000
36 Months after execution of Definitive Agreement: US$ 400,000
48 Months after execution of Definitive Agreement: US$ 1,700,000
Total Option Payments: US$ 2,500,000
What do we know about Valdez?
Their stock trades for 15 cents! Although their press release goes on to claim they are looking forward to focusing on their remaining projects in Alaska, Valdez's website is solely focused on Mexico, including a haha Spanglish moment where you open the website and are greeted with the phrase "Bienvenida a Valdez Gold." They go on to write:
Valdez Gold Inc. is an international natural resource Company based in Toronto, Canada specializing in mineral exploration. The Company is exploring for precious and base metals with ongoing projects in locations in the prolific mineral rich Sierra Madre gold belt in the state of Chihuahua, Northern Mexico. The company has embarked on an aggressive exploration programme on its current concessions and will be actively seeking other opportunities within Mexico. Mexico provides investors with political stability, investor friendly exploration, mining regulatory structures and a good infrastructure.
Obviously Valdez bet the farm on Mexico and lost, or else why would they sell the company's primary mine for a measly $2.5M? Gammon is buying a property that has already been explored and that Valdez must know is nearly worthless. Yet in a few months, you will be told that this area has great opportunity, and the promise of this worthless land will be touted in press releases for years to come until Gammon goes bankrupt!
Outlook: Negative. Target 2011: $2. Target 2015: $0.00