MINING MARKETS & INVESTMENT NEWS – INVESTMENT COMMENTARY — Yorkton initiates coverage of Millstream

The deep drilling program at Millstream Mines’ (MLSM-C) Potter mine represents “one of the most promising current base metal exploration projects in Canada,” writes John Kallaway, mining analyst for Yorkton Securities.

Millstream owns 100% of the Potter mine, a former producer situated about 80 km east of Timmins, Ont. The mine operated from 1967 to 1971, when low copper prices forced its closure.

In a recent research report, Kallaway says recent drill intercepts beneath the former mine workings have been “exceptionally high grade” and demonstrate that the mineralized zones are increasing in thickness with depth. Results from three deep holes returned an average grade of 3.77% copper, 4.2% zinc, 0.07% cobalt and 35.71 grams silver per tonne over 4.61 metres.

“However, the project’s real blue sky is associated with several large geophysical targets on the property,” Kallaway adds. “[These] have the potential to host much larger ore zones and are the basis for much of the recent interest shown by major mining companies.”

This summer, Millstream plans to drill two geophysical anomalies. The company is seeking a joint-venture partner for the project and Kallaway notes that a number of majors have shown interest.

Millstream also holds other properties in Canada, the United States and the Czech Republic. Its most important asset is the Potter property purchased in return for $3 million cash and a $1.6-million promissory note. Millstream also owes the former owners a debt of $2 million.

Yorkton rates Millstream a “speculative buy.” The junior has 25.7 million shares outstanding (32.9 million fully diluted) and currently trades below $1.