July 9th, 2009:|
On April 14th we announced Ivanhoe Mines Ltd. (IVN) as our stock suggestion at $6.02 and said, "We feel IVN is one of the most overlooked gold companies today with the greatest upside potential. IVN has the potential to become one of the biggest gold winners that we ever come across."
Today, IVN hit a high of $8.61 for a gain of 43% since our profile in less than three months!
IVN is working closely with the company we are pleased to announce right now as our new stock suggestion, Entrée Gold Inc. (EGI).
Entrée Gold Inc. (EGI)
Current Price: $1.39
NIA is pleased to announce its newest stock suggestion Entrée Gold Inc. trading on the AMEX under ticker symbol EGI. EGI is currently trading at $1.39 with total shares outstanding of 94.6 million and a market cap of $131.5 million.
Just like our huge winner IVN, EGI is focused on exploring for gold, copper, molybdenum and coal in Mongolia, China and the USA.
EGI has assembled a portfolio of projects balanced between grass roots and advanced exploration, and pre-production. They have raised over $100 million since their inception in 2002, and their market capitalization has grown from under $4 million to over $131 million. Their treasury stands at well over $50 million, providing them with ample funds to weather the upcoming economic crisis.
EGI is a large landholder in Mongolia, where it holds three exploration licenses that comprise the Lookout Hill property covering over 179,000 hectares. Lookout Hill completely surrounds the Oyu Tolgoi project of our recent stock suggestion IVN, known to host some of the world’s richest and largest porphyry copper-gold-molybdenum deposits. IVN is EGI’s joint venture partner on a portion of Lookout Hill, achieved through the expenditure of $35 million of exploration and development in just over three years. Their aggressive exploration efforts led to the discovery of the Hugo North Extension and Heruga deposits on their Lookout Hill property. These deposits now form a very important part of the world class Oyu Tolgoi mineralized copper-gold system. IVN is also one of EGI’s major shareholders!
What is amazing is the fact that as joint venture partners, EGI and IVN will share the proceeds of production from the deposits on Lookout Hill. The share of proceeds is determined by the depth of mineralization. If ore is mined below a depth of 560 metres, EGI is entitled to 20%; if production occurs above 560 metres, EGI is entitled to 30%. Believe it or not, IVN is required to carry EGI through to production and if there is no production, EGI is not liable to repay any development costs!
EGI’s Hugo North Extension is one of the world’s richest porphyry Cu-Au deposits with 5.6 Billion lbs of Copper indicated! EGI’s Heruga property is one of the world’s largest porphyry Cu-Au-Mo deposits with 15.2 Billion lbs of Copper inferred!
What really caught my attention is the fact that the discovery of significant mineralization on EGI’s ground also attracted the attention of one of the largest mining companies in the world, Rio Tinto (RTP), which has become EGI's largest shareholder! RTP is also a significant shareholder of IVN and has committed up to $1.5 billion to the development of Oyu Tolgoi! This project alone is supposed to increase Mongolia’s GDP by 34%! Remember, EGI’s Lookout Hill Property completely surrounds the Oyu Tolgoi project!
EGI’s upside potential is tremendous. Think about it, both RTP and IVN own 16% and 15% of the shares outstanding respectively!
EGI currently has over $41 million in cash and practically no debt.
Just recently, IVN announced that it is in the final stages of the agreement with the Mongolian government to advance into production of the Oyu Tolgoi project.
NIA believes EGI is one of the most undervalued exploration companies we have ever profiled and has all the right characteristics in place to make it a significant winner during the upcoming hyperinflationary crisis.
Here is a map of Lookout Hill. You can clearly see EGI's 139,500 wholly owned hectares, as well as their approximately 40,000 hectare joint venture land with IVN. The blue box is IVN's Oyu Tolgoi project that they are developing with RTP. Pay close attention to the Hugo North Extension and Heruga Zone which extend from Oyu Tolgoi onto the EGI/IVN joint venture property!
A co-founder of NIA has purchased 36,500 shares of EGI and could sell them at any time.