When a 4.5% jump in stock price with 15 million shares changing hands on news of the acquisition of three new concessions is considered a dull trading day then you know you’re dealing with a volatile stock.
Portage Resources has gone from 2c to 65c a share in the matter of three months but the Peruvian explorer has certainly not been a one-way bet – the stock’s 52-week high is $1.24. The company based in Miraflores, Lima (pictured) has been snapping up silver properties in Peru, but after announcing silver reserves worth $2.3 billion at one of them the stock has been unstoppable.
And it’s not difficult to get hold of shares either – just under 15 million shares change hands each trading day. Portage Resources now has a market capitalization of $420 million.
Portage Resources’s recent property acquisitions include a concession near the massive Antamina Mine located in the Ancash Region in Peru and in Nevada US. But what has really boosted the stock is the June 24 announcement of the results of the NI 43-101 report for its Wukakuy properties. The studies showed 58 million ounces worth of silver reserves which at today’s price would be worth some $2.3 billion.
Peru is the world’s largest producer of silver, third largest of copper and fifth largest of gold, with gold accounting for roughly one third of Peru’s export revenue. Recent political turmoil in Peru – including the revoking of Canada’s Bear Creek’s licence in late June after protests killed five people – appears not to have slowed down investment in the mining sector there. However a mooted windfall tax on miners and royalty changes may still affect resource companies’ operations there as a new left-wing president takes office at the end of the month.
Below is Portage Reseource’s announcement released after market close on Monday of the acquisition of three new concessions in Peru:
Portage Resources Inc. through its wholly owned subsidiary Portage Minerals S.A on Monday signed a letter of intent to acquire three adjacent mining concessions located in the Tambo District, Castrovirreina Province, Department of Huancavelica, Peru.
Portage Minerals S.A. has set a date of on or before Aug. 15, 2011 to complete the acquisition San Martin mining concessions. The time frame allotted will allow Portage Resources Minerals S.A. the necessary time to conduct all due diligence on said acquisition.
The said concessions are located approximately 383 Kilometers from the city of Lima and is easily accessible by land with the last couple of kms to be travelled by trail. These concessions comprise an area of about 700 hectares.
The gas pipeline and other existing infrastructure will lower production costs upon start-up. The concessions are production ready in comparison to most projects, the turnaround time could be less than a year based on all available reporting.
There is great history behind these mining concessions that first attracted the Portage team. Upon further review of the overall area and the initial reviewed reports indicated that the concessions are rich in gold and silver, thus the Portage team decided to enter into said LOI.
Portage Resources Inc. President and CEO added, “The technical data available on these mining concessions is very extensive and requires full review within a short period of time. I feel the time is well spent as the potential of these concessions could be of incredible benefit to Portage.”