If you have been an investor in gold over the past 15 years then Dr. Roger Newell should be a household name. Ok, that may be a bit of a stretch. Perhaps if you were a practicing geologist, avid gold bug, historian on Nevada gold mining, then Dr. Roger Newell should be a household name. Yeah, that is more like it.
Dr. Roger Newell holds a Ph.D. in mineral exploration from Stanford University, and a M.Sc. in geology from the Colorado School of Mines and has been involved in mining operations for over 3 decades. Dr. Newell has notariety in geologist circles for recognizing the potential of the Carlin Trend in Nevada. At the time, he was working for Newmont Mining Company and established new exploration programs in Nevada, which helped lead to Newmont Mining becoming the world’s largest gold producer at the time and with Nevada operations yielding over 1 million ounces per year. Dr. Newell then served as Vice President of Development for Capital Gold Corp (US ticker symbol CGLD) from 2000 to 2007 and was responsible for bringing the company’s El Chanate gold mine into production and bringing the company from the depths of bulletin board mediocrity to a viable, profitable junior miner.
His latest undertaking is as President of microcap stock, Lake Victoria Mining Company (LVCA). LVCA is a tiny 20 million dollar exploration stage mining company that has a number of promising properties in Tanzania a nation in central East Africa . There is unfortunately a negative connotation when discussing the economic and political stablility of lesser known African nations, but Tanzania appears to be a very stable nation with major companies such as Barrick Gold and Ashanti partaking in its vast array of resources. Through its wholly owned subsidiary Kilimanjaro Mining Company, LVCA has a cache of sites that have yielded positive results in inital testing. In a recent publication, Roger Newell stated the following on their Singida Gold Project which combines 46 Primary Mining Licenses totaling approximately 5km x 1km.
“Based on the fact that all of our exploration to date in the Singida Gold Project has yielded extremely positive results and given that our original target is now expanding, the Company’s confidence in the commercial potential of Singida is very high. Accordingly, we have begun completing acquisition of the Primary Mining Licenses that comprise the gold bearing target area. The three new veins that have been identified appear to have a similar character as the nearby main vein system, which we already know carries important gold values at depth throughout the 5 kilometer strike. With the price of gold approaching $1,200 we are on an accelerated pace to prove up gold mineralization and to advance the project towards a production decision.”
There are some gold mines closeby that are already producing gold with low production costs. For example, the Tulawaka mine located south of Lake Victoria, is a joint venture between Barrick Gold and Northern Mining Exploration. Tulawaka’s gold production has exceeded 729,000 ounces of gold over the last 4 years. Furthermore this production is occurring at a cost of approximately $350 per ounce. Anglogold Ashanti’s Geita gold mine also just south of Lake Victoria has produced over 200,000 ounces of gold in the last 12 months. It is clear that other major players have had successful extraction programs in the region.
In looking at LVCA’s (LVCA.OB) chart below, we see that the stock is quite volatile with a 52 week range between .34 and 1.49. The stock currently has settled between .55 and .70 cents. The Bollinger bands and historical price data indicate that LVCA could hit support in the $0.50-.55 range. For the multitude of gold micro-cap stocks the metric that is most desired is not necessarily quantifiable, credibility. In this case, Newell has succeeded in every venture he has undertaken thus far, and betting against him may not be prudent. The stock seems very attractive at current levels and could easily be at $2-$3 as they make progress towards production or enter into a JV with a larger miner. Beware though, any microcap stock, regardless of their prospects, is a risky venture and is prone to wild price action.
UPDATE 1/6/10 1PM :
LVCA came out with a press release today that Newell has joined Midway gold’s BOD. No business relationship currently but a possible tie-up in the future perhaps?
Roger Newell, our president accepted a board of director’s position with Midway Gold Corporation, whose common stock is traded on the American Stock Exchange and the TSX Venture Exchange. Roger Newell, president of Lake Victoria Mining, stated: “We continue to advance the company’s goal and I encourage all shareholders to visit our corporate website regularly where you can register for free investor updates to keep informed of our ongoing progress.”
Disclosure: Editor has a small long position (less than 1k) in CGLD and LVCA
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