As of January 15th 2007
Shares Issued and Outstanding: 31,299,309
Warrants: 11,118,146
Options: 2,126,400
Fully Diluted: 44,543,855
Share Price: C$ 1.45
Market Cap: 64,588,589
After the announced March 22nd private placement, Galway should have around $5,000,000 in the treasury. Also from the press release “Substantially all of the financing ($5,000,000) will be subscribed for by a company controlled by Sprott Asset
Management Inc.”
Why Tungsten and Molybdenum?
Tungsten is super hard (second only to diamonds) and has an extraordinarily high melting point. Hence, it can be used to make objects that withstand and operate under great pressure such as drill bits for mining, petroleum exploration light filaments and military artillery applications to name a few. The price of Tungsten has soared from US$50/Short Ton Unit (STU) in the mid nineties to between US$ 250-300/STU today.
Molybdenum is primarily used as an alloy in stainless steels and in alloy steels. It also has uses catalysts, paint pigments, corrosion inhibitors, dry lubricant etc. After years of trading around $5.00 per pound, the molybdenum market moved into a deficit sending pricing surging in late 2004. Since then molybdenum prices have remained firm trading between $24 and $40 per pound. Strong continued global demand for both Tungsten and Molybdenum coupled with scarce new supplies; bode well for the future Tungsten and Molybdenum market.
Properties
Galway has 3 properties, all in the United States.
Indian Springs Tungsten property in northeast Nevada is an advanced stage property that had been previously drilled and tested between 1968 and 1986 by Placer Amex, Union Carbide and Utah International. A total of 336 holes covering 82,000 feet were drilled between the 3 companies. Results from drilling in 1984 by Utah International range “from 8.85 million tons @ 0.257% WO3 at a 0.17% cutoff grade to 21.94 million tons @ 0.179% WO3, at a 0.10% cut-off grade; with strip ratios of 4.8 and 1.3 respectively (These results are not NI 43-101 compliant). From what data Galway has obtained, they estimate the Tungsten deposit to be shallow (near surface), 3,000 feet in length and 2,000 feet in width. Galway has already completed a 20 hole reverse circulation drilling program and found that the assay results confirmed mineralization defined by the historical drilling. A NI 43-101 resource estimate calculation is currently underway and due out any time now.
Victorio Mountain Project in southwest New Mexico: Galway announced a NI 43-101 complaint resource estimate by SRK Consulting on this project on January 29th 2007 and some of the highlights include:
The deposit contains over 65 million pounds of molybdenum and 57 million pounds of tungsten (WO3) in the Indicated Category, and 31 million pounds of molybdenum and 33 million pounds of tungsten (WO3) in the Inferred Category.
Approximately 65% of the stated resources fall in the Indicated category, with the balance falling into the Inferred category. The focus of the current drilling program is to continue to upgrade the resources.
Galway considers that the flat-lying tabular geometry of the mineral lends itself to underground bulk mining.
The current price for molybdenum is US$25.00 per pound and for tungsten (WO3) is currently US$12.50 per pound.
The in-situ value of the molybdenum alone is close to $3 billion. For the independent resource estimate a conservative price assumption of US$ 12.00 per pound molybdenum and US$ 8.00 per pound tungsten was used. The resource is based on data from 71 holes (over 165,000 feet of drilling) completed in the late seventies by Gulf Minerals. There is potential for expanding the deposit, both to the northeast towards the Tungsten Hill Breccia Pipe, and to the south-southeast from the present known configuration of the deposit. There is also the potential to improve upon typical drill hole spacing of 400 feet with in-fill drilling to better define higher grade and/or thicker mineralized sections. Finally, this project could be producing within 4 years.
Lone Mountain project is located about halfway between Chino (Santa Rita) and Tyrone Mines, in Grant County, New Mexico.Extensive past drilling indicates that the Lone Mountain property contains a porphyritic intrusion with oxide copper mineralization and highly mineralized sediments lateral to the intrusion. The company's initial emphasis will be on the shallower mineralized sediments where seven widely-spaced holes drilled northeast of the intrusion contain potentially ore-grade copper-zinc mineralization. The best of those intercepts is 26.3 feet averaging 1.63% Cu, 13.73% Zn, 2.54% Pb, 0.04 oz Au/ton and 3.38 oz Ag/ton. The property was drilled between 1975 and 1997, with 34 drill holes for a total of 62,797 feet of drilling. According to Dr. Michael Berry of the Morning Notes, “At current market prices I estimate “the rock’ at Lone Mountain is worth about $283 per ton, in situ. The 7.5 million tons of historic (not 43-101 complaint yet) is worth US$2.1 billion at current market prices. If I assume 10% of the in-situ as an asset valuation, the firm value (based on assets at Lone Mountain and Victorio only) approaches $500 million today.”
The Lone Mountain property represents an exploration opportunity to expand on the Upper Lake Valley copper-zinc-silver mineralization with additional drilling between the historical widely-spaced drill holes. Chapman, Wood, and Griswold estimated a resource (based on the data from Pincock, Allen, and Holt) for the Upper Lake Valley skarn section of 7.5 million tons at 2-3% Cu, 1-2 % Pb, 4-5 % Zn, 2-3 opt Ag, and 0.01-0.02 opt Au disposed about the central intrusive complex (Chapman, Wood, and Griswold, 1989, 1990) (This resource estimate in not NI 43-101 complaint).
Management Pedigree
Robert Hinchliffe (President & CEO): Mr. Hinchcliffe worked as Chief Financial Officer of Kirkland Lake Gold Inc. (TSX - KGI) from January 2003 until February 2005, wherein the company raised over $50 million in funds to re-commission the Kirkland Lake Gold Mine and for exploration purposes. Prior to that, he worked for seven years on Wall Street as a Mining Analyst for Prudential Securities, SG Cowen, and Santander Investment, covering U.S., International, and Latin American mining companies, in addition to other sectors. Mr. Hinchcliffe has a M.B.A. from Georgetown University, and a B.A. in Economics from the University of Arizona (with a concentration in Mining & Geology).
Marshall Himes (COO & Director): Marshall Himes retired several years ago after serving as the Chief Geologist for advanced projects for BHP worldwide. This role involved evaluating projects at the advanced exploration stage for acquisition, or managing existing advanced projects to move them along to development. Mr. Himes has been associated with, or managed projects throughout the world involving a wide range of commodities from base & precious metals to industrial minerals, coal, & oil sands. Just prior to retiring from BHP, Mr. Himes managed a team responsible for resource estimates for the feasibility study of the Ekati Diamond Mine, Northwest Territories. His career as a geologist and manager in the mining industry spans 32 years, primarily in metals exploration. However, Mr. Himes did hold various positions at mines that were in production, which would include but not limited to: Butte-MT, Pima Mine-AZ, Island Copper Mine--BC, and the Ok Tedi Mine--PNG. Earlier on in his career, Mr. Himes was the Project Manager at the Indian Springs Property with Utah International beginning in 1977. He was responsible for the day-to-day geologic activities of mapping, sampling, drilling and resource estimates. He also coordinated the metallurgical bulk sampling and worked with the mining engineers in developing a preliminary mine plan at Indian Springs. Mr. Himes received a B.S. in Geology from the University of Washington and an M.S. in Economic Geology at the University of Arizona.
David E. DeWitt (Director): Mr. De Witt has held various positions with a number of public mining companies, including serving as a director and Corporate Secretary of Arequipa Resources Ltd. Mr. De Witt is a founder of Pathway Capital Ltd., a private venture capital company, and is currently a director of Bear Creek Mining Corp. and Full Metal Minerals, both are public mining companies listed on the TSX Venture Exchange. Mr. De Witt has over 20 years experience financing public and private companies and structuring and negotiating major transactions with particular expertise in the mining industry.
Leigh Freeman (Director): For the past six years Leigh Freeman has been working as a principal with Downing Teal Inc, one of the top executive search firms that focuses on employment needs for the mining industry in addition to working closely with companies in implementing their business strategies. Additionally, for 10 years Mr. Freeman was involved with the funding and development of natural resource projects in both North and South America. Most notably, Mr. Freeman was a co-founder and President of Orvana Minerals (TSX listed company) and helped raise over $75 million for the development of a gold mine in Bolivia. Earlier on his career he spent 10 years working for Placer Dome on both the exploration and production front as a geologist and engineer. Working in diverse roles, Leigh Freeman has over 30 years working in the mining industry in different capacities.
Ron Guill (Director): Mr. Guill is the owner of SMD Inc., a mining company which he established 25 years ago to provide underground mine contracting services. SMD has over 275 full time miners that are currently mining at eight different mines in the Western United States, and his company has grown to be the largest underground mine contractor in the United States. Current clients include Newmont (gold in Nevada), Barrick (gold in Nevada and Montana) and Unocal (molybdenum in New Mexico). Mr. Guill holds a degree in Mining Engineering from the Mackay School of Mines in Reno, Nevada. Mr. Guill serves as a trustee for Northwest Mining Association. He was recently recognized by NWMA with the 2006 Platinium Award for Corporate Excellence "In recognition of more than two decades of customer focused professional and innovative leadership in mechanized underground mining."
Summary: Galway has an experienced and capable management with 3 advanced properties that have the potential to make the company worth upwards of $500 million.
Catalyts:
They are no operating Tungsten mines in the Unites States. Once, people get a whiff of this story, the interest could only benefit Galway’s share price. Galway recently had a meeting with U.S. brokers educating them on the relevance of Tungsten and Molybdenum. As the brokers get the word out, Galway will be the beneficiary. Additionally, Galway also presented its story at the 2007 Calgary Resource Investment Conference (March 31st and April 1st).
The involvement with Sprott Asset Management will greatly benefited Galway and provide increased publicity and credibility.
The release of the NI 43-101 report from the Indian Springs Tungsten property.
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