Grandich (The Prospector) on Garibaldi:Look For Diversity When Taking A Chance

Creating shareholder value through discoveries and strategic development

The company is currently focused on advancing its Rodadero and La Patilla Projects where drilling has intersected high-grade values near-surface in Mexico.

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Grandich (The Prospector) on Garibaldi:Look For Diversity When Taking A Chance

posted on Dec 02, 2010 12:55PM

Look For Diversity When Taking A Chance

Contact Peter Grandich at peter@grandich.com
http://www.theprospectornews.com/weekly_1130_02.php

Experienced investors know the only guarantees in life are death and taxes. Managing risk has never been more important in today’s world, where the appreciation of what is an investment, what is speculation and what is gambling is an important understanding.

When it comes to gambling on a junior exploration company seeking its first major discovery, fortune may smile on those companies that focus on a strategy offering multiple opportunities at success as opposed to a single project. Garibaldi Resources Corp. (TSX.V:GGI) is a junior exploration company that is focused on giving shareholders multiple chances for preparation to meet opportunity.

Garibaldi’s seven district scale project areas in Mexico covers over 2200 sq. kms of strategically located mining concessions in Sonora, Chihuahua and Durango states. The Company’s plan to acquire a vast land package utilizing newly emerging remote sensing technology to prioritize target areas for exploration and development is novel. The goal is to feed a pipeline of projects to advance and develop toward, joint ventures and sales to larger mining and exploration companies. In this regard, Garibaldi’s approach separates it from its peers by strategy and the scale of its land holdings. Certainly, this is one company that should never live or die by the results of any one project.

Conveying the magnitude of Garibaldi’s land holdings is not an easy task. Perhaps, the best example of the potential of the company’s properties is Tonichi in Sonora state. The single concession covers approximately 48,000 hectares even after reducing the original claims by half based on results from the company’s hyperspectral air survey. What remained were areas that generated anomalies after analysis of data from cutting edge remote sensing technology. These had alteration signatures similar to known deposits in that mineral district. The area hosts numerous Copper porphyry deposits like Cuatro Hermanos, San Javier and the San Antonio copper/gold deposits all of which border Tonichi and were also captured in Garibaldi’s remote sensing surveys for comparative purposes.

Tonichi hosts Garibaldi’s Locust “gold in soil ” anomaly which the company is exploring in search of a bulk gold deposit. Tonichi has numerous zones of intense alteration which is a feature associated with many mineral discoveries. While not every alteration zone contains a mineral deposit, many mineral deposits are associated with alteration features. Garibaldi continues to advance or eliminate target anomalies at Tonichi which represents just 20% of its Mexican concessions. Over time, as the company reduces its landholdings around anomalous target areas in a systematic process of elimination, the potential for discovery on the remaining ground should improve while the tax burden decreases.

Last year, Garibaldi sold its Temoris project in Chihuahua State to Paramount gold and Silver for USD $400,000 and 6,000,000 shares of Paramount Gold & Silver. This year, the company began the process to advance or eliminate targets at its Tonichi, Onovas and Morelos concessions. Next year, Badesi, Rodadero, Iris and Sianori or 60% of Garibaldi’s Mexican land holdings await the gauntlet of evaluation. The Company owns an NQ diamond test drill and expects to announce its next drill target very soon. Garibaldi appears well positioned to take advantage of the ongoing bull market in commodities with its focus on technology, diversity and the sheer size of its land inventory in the Sierra Madre.

All junior exploration companies are gambles although, the reward for those that have the stomach to lose part or all their investment can be worth it. Even with a great deal of due diligence, it’s very easy to be wrong. So, it’s always preferable to bet on companies that have some extra plan b in a high risk business that mineral exploration is. In this regard, finding an exploration company that has a plan A-Z and a very big and strategic slice of Mexico’s Sierra Madre is as uncommon as it is risky.

A gambler weighs his bet on the balance of probabilities, if you’re going to gamble on pure exploration, looking for that next big discovery, look at companies like www.garibaldiresources.com that are diversified and own a large and strategic land package.

Peter Grandich is the founder of Grandich.com and Grandich Publications, LLC, and is editor of The Grandich Letter which was first published in 1984. On his internationally followed blog he comments daily about the world’s economies and financial markets and posts his views on social and political topics. The result is an insightful and intuitive look at business, finances and the world, set in a vernacular that just about anyone can understand.

He is a member of the National Association of Christian Financial Consultants, and a long-standing member of The New York Society of Security Analysts and The Society of Quantitative Analysts.

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