BackgroundI first wrote about Buffalo in June of 2006 and then again on March of 2006. Both articles can be found in my archives on Goldseek. I believe there is ample information contained in those two articles to bring you up to speed.
Area Surrounding Mt. Kare
Profile of Mt. Kare from the Air Showing Camp
When I added Buffalo to my list of Junior Mining Companies for 2007, it was because I thought it had the potential to double in 2007. This is still my opinion, only now even more so.
Buffalo Gold (BYBUF-OTC and BUF.U-CA) has several areas of major focus. Of course, the flagship property is Mt. Kare in Papua New Guinea. I’ve been covering Mt. Kare fairly extensively over the past five years and plan on continuing the exercise. This is a project that is joint-ventured with Madison Minerals (MMRSF-OTC and MMR-CA). My reasons for continuing to cover it are because I personally believe that success is ever closer due to the ongoing commitment to the project by the companies involved. It has been a long and winding road as we’ve been climbing up Mt. Kare both literally and figuratively. Patience has been required. But then, patience is required on all of these quality junior mining projects. Patience also seems to be the one commodity in short supply in the investor arsenal.
Just so there is no misunderstanding, I work for both companies and have serious positions in each of them. Please read my disclaimer at the end of this article. I tell you this because there is nothing to be hiding in the closet. I think that by now, Howard Ruff and I are the two people that have been recommending Madison the longest. Since Buffalo is joint ventured with Madison, we anticipate both companies doing well. I am going to elaborate upon this relationship between Madison and Buffalo in my next article about Madison. But just for the record, this joint venture between Buffalo and Madison was an excellent deal for both parties and they both stand to fairly participate in the equity being developed by the current operator—Buffalo Gold.
Recently, the share price has had a bit of a pull back. I remember that John Embry was on Rob-TV on February 8, 2007 at 12:30 PM EST with Jim O’Connell. Mr. Embry is one of the better respected analysts in the gold community. A viewer called in and asked about the share price of Buffalo which was then in the $1.20 C range give or take. John mentioned that he was a buyer at those levels. I would have to concur with Mr. Embry realizing that Buffalo Gold was above $2.00 US not too long ago, and that nothing has significantly changed within the company since then.
Why does a company such as Buffalo Gold or Madison Minerals trade within such extreme ranges? Simply put, it is the nature of the beast. There are many people that simply trade or flip these stocks not realizing that one day they should have zigged when they zagged, thereby discovering that they are out of position when the big move occurs. In my mind the big move is closer than we imagine. Junior Mining companies by their very nature are illiquid. My opinion is that it is better to let the others trade in and out for a dime or a quarter; I’m holding for the long term having full confidence in both the projects and the management of both companies. There is no doubt that the ball is now squarely in Buffalo’s Court.
The other consideration is that gold has been consolidating in the $650 range and the Junior Gold (and Silver) Mining Companies have been consolidating as well. I believe that if you buy the quality companies and “put them away” for the long haul you’ll do very well.
There is one point I’m going to repeatedly stress. A significant up move in gold is coming as the US dollar and its peripheral elements deteriorate. Eventually, gold and all quality gold companies will find their equilibrium within that context. Advanced stage exploration projects along with smaller producers are going to do extremely well. My take on it is that if we position ourselves correctly, good things will occur for those participating investors.
Buffalo’s Latest Press Release
The latest press release from Buffalo Gold was released on January 18, 2007. It pertained to Mt Kare and had a sub-title that stated Buffalo Gold Strengthens Geological team and moves Economic Study Foreword. Within it, they reported the results of a long list of drill holes on their infill program at the Western Roscoelite Zone (WRZ) There were several exceptional holes such as the one of 112.0 meters of 5.04g/t including 25 meters of 13.86 g/t gold. They also reported another hole of 100.9 meters of 1.56 g/t gold in hole MK06-75 including 25.9 meters of 2.25 g/t gold. These are very respectable numbers. Of course, the market always wants more and the old adage in the junior mining business comes to mind: “buy the rumor sell the news”. The only problem in this case is that the news is good. The “big picture” is beginning to emerge. If you visit their website at www.buffalogold.ca and go to their “investor info” section, you will find all of their press releases, including this latest one.
In that same press release they also stated that Buffalo is on schedule for completing its Stage 2 Preliminary Economic Feasibility Study at Mt. Kare by June 2007, and will use these results in the recalculated resource estimate to be released in conjunction with the Study. Additional commentary went on to state: “Following the success of the infill program at the WRZ, Buffalo now has four diamond drills at site to test additional objectives both in the vicinity of known mineralization and in new exploration target areas”.
River Down the Valley
The pre-feasibility and feasibility studies are extremely important as pertains to this business arrangement between Buffalo Gold and Madison Minerals. My understanding is that these studies are right on track. June could be a very important month for both companies. I know I’ll be watching closely as to how events unfold.
Buffalo Gold is more than a One-Trick Pony.
Buffalo is also exploring a highly prospective portfolio of properties in Australia which include targets for gold, uranium and nickel.
If I had to give reasons as to why BYBUF was a buy, I would have to refer to all the reasons I’ve stated in past articles. These reasons would include projects, management, the ability to fund, the willingness to promote, and integrity.
Damien Reynolds, Chairman and CEO, understands the need for diversification. Brian McEwen, Chairman and COO concurs fully. The entire management team is technically oriented and has every intention of maximizing the potential of all company projects. Those are not idle words; they can be empirically verified by studying the history of the company over the past several years. Actions speak louder than words.
An Excellent Investor Relations, Public Relations Department
One of the best ways to be a successful investor in the Junior Mining Sector is to pick up the phone and talk directly with the companies you find interesting. The solid ones always have excellent Investor Relations (“IR”) departments. Julie Hajduk heads up the IR department for Buffalo and she is one of the best. No kidding, she is. What makes her so valuable? In a word, it is “informed”. She understands the company projects in detail and then she is willing to talk with you so you understand them. Her contact information is:
E-mail: julie@buffalogold.ca; Phone: 604.685.5492 or Toll free: 1.888.685.5492.
Talk with Julie and her staff and don’t be afraid to be added to their mailing list. Most importantly, people respect Ms. Hajduk as a professional because she has empathy for the investors. I simply cannot overstate how important that trait is in this world of “hurry up and get off the phone—I have another call to take!”
Speaking of Investor Relations, Buffalo will be participating in Goldseek’s February 22, Virtual Investment Gold Conference (goldseek.com/2007), wherein they will be presenting company focus, news and the particulars of Mt. Kare. It is an event I highly recommend. The viewer traffic has increased with each subsequent conference that Peter Spina has presented both in the Silver and in the Gold Sectors. As in Goldseek Radio, this is another avenue where Goldseek is assisting both the companies that advertise along with the investors interested in those companies.
If you want to learn about Buffalo Gold directly from the source, this is the place to be. Remember, that the entire conference will be “archived” for at least a month so you have plenty of time to visit and revisit both the speakers and the company presentations. I am quite familiar with three out of the four companies involved and I have the utmost respect for the speakers. This should be a good one.
Conclusion
The gold community is in the third inning of a nine inning game. We’ve had a bit of a consolidation in gold and in quality junior gold companies over the past six months. Buffalo Gold is simply in the middle of this mix and when gold starts moving again, this company will move up right along with the rest of the sector that has excellent projects being developed.
When a company like Buffalo, with its assets and management, has a pull back, it is usually for one of only several reasons. There is a lack of bids because there is a lack of news. Perhaps there is a major seller who is unloading into the market for one reason or another. Or it is because gold is in a consolidation phase and people don’t have the patience or the capital to stay in it for the long haul.
Right now, in my opinion, Buffalo Gold is a screaming buy. I personally would purchase it up to $2.50 and then hold it for the remainder of the bull market in gold which has a long way to go. That’s how people make money in these markets. Those are not my words, but those of Richard Russell who suggests that people who really make money in “primary trend” markets, purchase large positions early on and then adhere to those positions over the extended course of the bull market.
Buffalo has the added benefit of people who care about what they know are quality projects. Don’t underestimate this for even a moment. Currently, there is a good deal of “head hunting” occurring within the industry. Why? Because there are simply not enough quality professionals available to fill all the slots that need to be filled. The sector is that busy—it’s on a roll! Management Teams, if they are on the ball, will always take good care of their top people or another company is going to be making them an offer they can’t refuse. Damien Reynolds, et al, understand this concept as well as any group I know.
Infrastructure with Road and Power Lines
Northern Roscoelite Zone
Pinuni Creek Upper Basis
Slide Area of Mt Kare
The Man and the Mountain
View of Upper Pinuni Creek
Until Next Time,
D. Stewart Armstrong
Posted by D.Stewart Armstrong in Articles