Jim Letourneau's Blog

Investing, Technology, Travel, Geology, Music, Golf. I think that covers it.

Elephant Tracks


Dorothy Kosich of Mineweb just posted an in depth article, Newmont makes Gabriel's day.

I always like to see what that people with more money, more research, more resources and more insight do with their scarce capital. Today Newmont Mines (NMC.TO, NEM) took $24.75-million of their hard earned dollars and placed it in shares and warrants of Gabriel Resources (GBU.TO). If Newmont exercises the warrants they will hold 18.6% of Gabriel.

Today Gabriel closed at $1.97 up 51.5%.

Newmont chose to pay $1.65/unit as opposed to last week's stock price of ~$1.25. Each unit consists of Gabriel common share and one common share purchase warrant with an exercise price of $2.00 before December 31, 2005. Newmont is clearly bullish on gold or they wouldn't be getting involved.

Gabriel's 80% owned Romanian gold project, Rosia Montana, had the bad fortune to be located beneath a small village. In spite of ongoing community relations efforts (including a fruit/nut tree inventory) there is organized resistance to the project.

In the green corner we have rosiamontana.org
In the black corner we have the Rosia Montana Gold Corporation S. A.

Newmont must feel that they have the clout to advance this project. I don't have a clue as to the local sentiment but census data indicates that almost 50% of the local populace derives its income from mining-related activities. The gold deposit has been outlined in great detail so the risk here is predominantly political.

I do not own shares of NEM.TO or GBU.TO
Courtesy the Big Picture Speculator