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 Mon Mar 6, 2000
Excerpt from Bottom-Fish Action for week of Feb 14-25, 2000
    Publisher: Kaiser Research Online
    Author: Copyright 2000 John A Kaiser

 Excerpt from Bottom-Fish Action for week of Feb 14-25, 2000

Altoro Gold Corp (ATG-V: $0.62)
Spec Cycle 100% Hold (Top 20 BF Buy $0.30-$0.49 for 2000) +27%

Altoro Gold Corp (ATG-V) has optioned the Pedra Branca platinum-palladium project to the Hunter Dickinson group, which in turn has assigned the optioned to a junior called Rockwell Ventures Inc (RCW-V: $0.78). I covered the details of the option deal in Altoro Tracker 2000-03 issued on February 24. The Rockwell assignment comes as a surprise because this junior already has 27.6 million shares issued, none of which any members of the Hunter-Dickinson group shows as owning by virtue of a 10% or greater position. Rockwell was created in October 1995 through a 3:1 rollback of Clarissa Mining Corp. In early 1998 Rockwell issued 22,400,000 shares to acquire a Chilean property which has since been sold to Anglo American for a 1.5% NSR and US $7 million payable over five years. In early 1999 the owner of the block sold the shares to a group that arranged a $910,000 bank loan. The guarantors of that bank loan turned out to be the Hunter-Dickinson group, which has the option of paying off the bank and converting the loan into 5,275,362 units at $0.1725. Each unit includes 0.6 of a warrant, so there will be extra dilution from 3,165,217 warrants at $0.172-$0.20 until March 18, 2001. No members of the Hunter-Dickinson group sit on Rockwell's board. Rockwell thus has 36.1 million shares fully diluted plus any options that might be granted. I estimate the public float to be less than 5 million shares. Rockwell's only assets consist of a US $7 million stream of future payments plus a 1.5% NSR in a copper prospect located 18 km north of the Chuquicamata copper deposit. At the time of the assignment Rockwell had a market cap of about $20 million, most of which can now be allocated to the 60% Pedra Branca stake. Assuming the Anglo American deal closes and Rockwell receives a good portion of the property payments, the junior should not have to undergo additional significant dilution to vest in Pedra Branca. If we assume that Altoro subsequently puts its remaining 40% stake to Rockwell for 40% of its market cap, Rockwell would have to issue 24 million shares to Altoro, which at current prices would be worth about $20 million. This implied value is more than Altoro's current market cap. Since announcing the deal Altoro has reported rhodium results for several of the higher grade Pedra Branca intervals. The grades ran from 0.03 to 0.36 g/t rhodium, which at $2,000 per ounce rhodium add US $2-$20 per tonne in rock value to the intervals if the rhodium is recoverable. Altoro has also reported auger sample results for its Rincon del Tigre PGM project in eastern Bolivia. Altoro drilled 3,869 holes to an average depth of 1.13 metres on 83 sample lines spaced 250 metres part with 20 metre spacing between holes on each line. Altoro did not report numbers, but did indicate that the results demonstrate a "well defined and continuous palladium and platinum anomaly...extending over 20 km". The host is a layered mafic-ultramafic intrusive complex. Altoro points out that palladium values are significantly higher than platinum values, a fact that used to be bad news but in today's palladium market is very good news. With signs that PGM fever is starting to sweep the resource junior market it is safe to declare that Altoro is now in a Speculation Cycle that will take the stock higher. Bottom-fishers should sit back and let their positions ride while the breakout momentum traders take over.

 
 

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