Tungsten Discovery at Happy Creek Minerals' (TSX-V: HPY) Fox Project
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By Dr. Allen Alper and Aaron Hoos
on 4/15/2013
David Blann, President and CEO of Happy Creek Minerals at PDAC
In today's tenuous economy, investors need to be particularly careful about which junior resource company they invest in. Gone are the days when an investor could buy into a company and have a pretty good chance that their holdings will increase in value just out of pure luck.
Today's investors need to be savvier than ever, scouring the marketplace for potential investments and looking closely at companies – and their projects, management team, and financing.
One company that investors might want to take a closer look at is Happy Creek Minerals (TSX-V: HPY) – a junior explorer working in British Columbia Canada. They have several projects underway, an experienced management team, and (perhaps most unusual in today's economy) money in the bank.
At the recent PDAC Convention in Toronto Canada on March 3rd through 6th, we spoke with David Blann, President and CEO of Happy Creek Minerals.
Happy Creek Minerals has several projects on the go, each in various stages:
Their Highland Valley property is a copper-moly property totalling 18,000 hectares, and adjoins Teck Resources' Highland Valley Copper mine- Canada's largest copper producer. Here, the Company has discovered two copper zones thought to have resource potential and 6.5 km from a producing open pit.
Elsewhere in the province, they have a group of properties that their website calls the "Cariboo Properties", which are located 60 to 80 kilometers northeast of 100 Mile House in the South Cariboo region of British Columbia. These properties are all 100% owned and consist of the following: Silverboss (copper-moly-gold), Fox ( tungsten-moly), Hen (gold and copper-gold), Art-DL (gold), and Hawk (copper-gold).
Although the company has published some very positive news on several of their properties, the Fox tungsten property was the focus of our interview.
"We've had great success with our tungsten project," said Mr. Blann. "The Fox has similar geology to the western world's highest grade tungsten producer and the drill results last year are top-tier, globally. We think they're better than underground grades and in an open pit setting."
"The Fox tungsten project is about 70 kilometers northeast of a town called 100 Mile House in central British Columbia Canada," explained Mr. Blann. "South and central B.C. is very active with mineral exploration, largely for porphyry copper-gold deposits. There are four or five producing mines right now. Our tungsten project is a little east of those copper gold porphyries where we have excellent infrastructure. There are roads, hydro power and local communities with good labor sources. We think the project can be developed with a minimal amount of capital and moved into production very quickly."
Investors may also like the ease with which the tungsten can be mined: "We are looking at it from an open pit perspective, but actually, it's more like a simple surface cut rather than a true pit because it's that close to surface. With the excellent infrastructure and high grades near surface we'd probably be looking at a capital expense of about $50 million to $60 million to construct mining facilities."
The company has been exploring this property intermittently since 2006, with the significant initial drill discovery at the end of 2011 and then follow-up drilling in 2012. A series of published news releases were issued between September and November 2012. Mr. Blann reported: "We made this discovery ourselves from scratch. With this drilling, we expanded on our surface results, confirmed tungsten occurs over a three kilometre distance, and the results we released in November are exemplary."
Surface Trenching Results
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Interval |
W03 |
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Trench |
(Metres) |
% |
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RC-2 |
7.0 |
0.8 |
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RC-3 |
4.9 |
1.1 |
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RC-6 |
2.0 |
5.0 |
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RC-7 |
4.0 |
1.2 |
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BK-2 |
7.3 |
1.3 |
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BK-3 |
4.6 |
0.9 |
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BK-5 |
3.0 |
2.1 |
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BN 4858 |
0.4 |
11.1 |
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BN 4860 |
0.6 |
3.9 |
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708-660 |
2.0 |
1.5 |
Happy Creek Minerals is moving forward with plans to take the Fox project to the next level. "With most tungsten mines running 0.25 to 0.45 % W03 and underground operations, our grades are among the best globally and at or very close to surface; we think from here we're on track to create a sizeable resource and we already have metallurgy work underway. We're looking at potential financial partners to help us advance this project. The goal is to have the resource and perhaps even some of the preliminary economic assessment work done by the end of 2013."
Mr. Blann also says: "We've had a number of people or companies interested in the project, and we still have around a million in cash, so we're not too badly off. It is certainly much tougher to finance now and the circumstances are different from previous years- so we respect that the markets are not in a favorable condition for junior companies. But in my experience, the best projects do attract financing and moved forward – and we have one."
Mr. Blann is a Professional Geological Engineer with approximately 30 years of experience in the business. He told us a bit more about his background: "I've done a lot of exploration in British Columbia as well as throughout North America and South America and even some time in Africa. I've spent a lot of time working for other companies that were in exploration mode. I've worked in open pit and development stage projects as well." Then when it came to starting up Happy Creek, he "took a lot of time carefully preparing the focus and strategy of this company from scratch."
Mr. Blann is joined on the management team by their Senior Geologist and Project Manager, Dr. Sassan Liaghat, who has a background in technical research related to resource deposits and has worked with Amarc Resources and Nova Gold Resources; as well as CFO Richard Lee, a Certified Management Accountant with over 30 years of public accounting experience. Three directors (including two who are Professional Geologists and another with extensive experience in brokerages, institutional sales and the capital markets) round out the management team.
The company's goal is not to reinvent the wheel, but rather to go where there is the best chance of success to develop a mine- sooner rather than later. As Mr. Blann explained, "we are on track with the original plan to create wealth for shareholders by discovering new, economic deposits that are close to existing mines and infrastructure."
As a result, Mr. Blann believes that the company is well worth a second look by investors who are trying to find good investments in this difficult market. "Our projects are located in a great jurisdiction as well as having good infrastructure nearby. We have one of the lowest power costs globally. We have 100% interest in eight projects, and all our key mineral claims are in good standing for five to ten years, with no pressure to spend cash on them just to keep them. And, we have cash in the bank right now with relatively low overhead costs. In several ways, we're in a safe position. With two new copper discoveries next to Canada's largest copper producer, a globally top-tier tungsten discovery and other exciting properties ready to drill, we have a very good share structure: 57 million shares out with a good piece of that held by insiders –some whom have continued to buy."
For investors who are looking to make a jurisdictionally safe play in an area that has seen some mining success already, and for investors who want to add a top-tier tungsten discovery to their portfolio, Happy Creek might be worth a closer look to see if it is the right investment for them.
REFERENCES
Happy Creek Minerals
Suite #460 789 West Pender Street
Vancouver, BC, Canada V6C 1H2
604.662.8310
http://www.happycreekminerals.com/s/Home.asp
PDAC: http://convention.pdac.ca/pdac/conv/
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