Temex focuses on gold assets (October 10, 2005)

Despite having multiple gold and diamond properties, Temex Resources (TME-V) is concentrating on gold — specifically, Timmins gold.

“The main focus is the Timmins property,” says Temex Chief Executive Brian Groves. “We realize the market is looking for pure plays.”

The Timmins, Ont., property, officially dubbed the Whitney Township property, encompasses 3 km near the resource-rich Destor-Porcupine fault system. On Oct. 3, the company was scheduled to begin a 2,500-metre drilling program aimed at three near-surface targets. The property has been home to past-producers, most notably the Hallnor mine, which produced 4.23 million tons grading 0.4 oz. gold per ton for 1.69 million oz. gold.

Temex can earn a 60% interest in Timmins by spending $4 million over four years through an agreement with the Porcupine Joint Venture (PJV), which is held by Placer Dome (PDG-T, PDG-N) with 51%, and Kinross Gold (K-T, KGC-N), 49%.

Groves says that several other juniors were interested in striking a deal with PJV, but in the end, Temex came out on top.

“We were fortunate to have a good rapport with (PJV) and translate that into a deal,” Groves explains.

Temex is getting some help from PJV, as well as some hi-tech assistance from Australian technology firm Taylor Wall and Associates, known for its three-dimensional (3-D) modelling software. Temex is using the technology to identify deep drilling targets at Timmins after others spent some 40 years mining the property.

Groves became familiar with the 3-D technology as head of corporate development with Placer Dome.

“It’s not common for a junior to have (3-D modelling),” Groves says. “When you’re into a mature mining camp like Timmins, it provides an edge over the competition to visualize rather than working on a two-dimensional plan. It’s far more comprehensive.”

Another edge Temex has over other juniors is an experienced board and a strong portfolio of properties — the most promising being the Juby gold property in northern Ontario, where drilling defined an indicated resource of 479,000 oz. gold at a cutoff of 1 gram gold per tonne. This helped Temex capture Bay Street’s attention almost a year ago.

Brian Christie, an analyst with National Bank Financial, has been covering the junior for more than a year. In November 2004, Christie wrote that Temex was “well positioned to fill a Canadian exploration void.” Christie rated Temex shares as “outperform” and set a 12-month target of $1.

After a brief run-up on the market on the heels of Christie’s report, Temex reached a 52-week high of 68 per share. But over the last month, shares in the company have traded between 14-20.

Christie’s most recent report, issued in June, lowered the 12-month target to 60 from $1 citing Temex’s need to raise more cash to continue with its exploration efforts.

Christie wrote that such a shortage of cash could “slow down the news flow and slightly impede the share price.”

Temex recently completed a private placement that saw roughly 2.6 million flow-through shares and about 900,000 common shares issued for gross proceeds of $695,000.

And while Christie’s associate, Christos Doulis, applauded the increase in funds, he noted that the $700,000 raised could be “cooked through” quite quickly.

Groves acknowledged that Temex will need more cash in the near future, and says that a small offering might be in the cards.

Then again, there’s always those diamonds.

Temex holds 70% of the Hood River diamond project in Nunavut and a 100% stake in the Wilson Lake diamond project in northern Ontario. “We’re looking at bringing in potential partners (at the diamond projects),” Groves says.