One of the best places to find a new mine is a region once bustling with mines.
That is the strategy behind exploration efforts by Vancouver-based Sienna Resources.
Looking for strategic metals like cobalt, nickel, palladium and platinum, Sienna acquired 9,513 acres of mineral leases in lower Sweden in the Bergslagen mining district with mines dating back to the 1800s.
The leases, acquired in 2017, have since been expanded to 12,733 acres with 16 historic mines on site.
Four of the old mines were cobalt mines with copper/nickel byproduct. Twelve were nickel mines with copper/cobalt byproduct.
Aside from improving prospects for mine-finding, Sienna has located in a stable, mining-friendly political jurisdiction.
Valued at a mere $2.5 million on the TSX Venture Exchange, Sienna has a significant drawback raising money to explore the property.
The only prudent way to raise capital is by sale of shares. With a recent share price of four cents and year high of seven cents shareholder interests are severely diluted by new share issues.
In 2018, the company raised $2.5 million, with another $500,000 in 2019. It had $609,000 of that left in September last year.
Electromagnetic surveys have discovered a massive sulphide mineral body hosting the sort of minerals Sienna wants to mine. The sulfide mineral body is just over 14 feet thick starting at a depth of 520 feet.
One drill hole through 40 feet returned nickel/copper/cobalt/platinum/palladium values worth $236US a tonne, assuming 100 per recovery of the metals.
One drill hole doesn’t make a company but makes following the company worthwhile for speculators wth a huge appetite for risk.
President Jason Gigliotti, a former principal of Canaccord, the Canadian securities firm, is president of MGK Consulting, a provider of accounting in Kenya and a director of Everest Ventures, a Hong Kong- related digital fintech firm.
Three of the four directors are linked to Everest Ventures.
None of them has any mining experience, raising the possibility of amateurs in the hard-nosed mining business: a red flag, if ever there was one.
Hopefully the strategy involves developing some reserves then entering a sale or partnership with an established miner.
Sienna also has stock listings in Germany and the United States.
It will take a few years and plenty of cash to fully understand what lies underground on the Sienna property, allowing speculative investors to take one of two routes.
They can closely watch company progress until such time as reserves and mine prospects warrant share investment. Or they can trade shares based on news and metal price changes.
Beware of management’s lack of mining skills and lack of skin in the game.
Gigliotti, the only director with shares, owns just under two per cent of the outstanding shares. The rest are owned by small shareholders with nobody owning 10 per cent of the shares.
CAUTION: Remember when investing, consult your adviser and do your homework before buying any security. Bizworld does not recommend investments.
Ron Walter can be reached at ronjoy@sasktel.net
The views and opinions expressed in this article are those of the author, and do not necessarily reflect the position of this publication.
