The Energy Report - Canplats Resources Corp. TSX.V:CPQ

>About The Energy Report/Streetwise

>Legal

>Site Index

Canplats Resources Corp.

TICKER: TSX.V:CPQ

DESCRIPTION: Camino Rojo is a new gold and polymetallic discovery and the focus of Canplats' exploration efforts. The 340,000 hectare (1,300 square mile) project is wholly owned by Canplats and is located in an area of excellent infrastructure, 50 kilometers to the southeast of Goldcorp's Penasquito mine in Zacatecas state, Mexico. In little over a year Canplats has outlined 3.44 million ounces gold and 60.7 million ounces silver in measured and indicated resources with additional inferred resources of 0.55 million ounces gold and 7.6 million ounces silver. The main zone at Camino Rojo, Represa, remains open along strike and to depth.
WEBSITE: http://www.canplats.com
Canplats Grants Stock Options (1/20/09) Positive Initial Metallurgical Results From Camino Rojo Project (1/19/09) Canplats Resources Fact Sheet Corporate Presentation

The information below is based on the most recent information we have received from analysts and the companies participating in The Gold Report. We encourage you to visit the company's web site for updates.

"The action has been heating up elsewhere in Mexico, too. A bidding war over another Vancouver-based gold junior, Canplats Resources Corp., has been garnering headlines over the last several weeks. Canplats owns the Camino Rojo deposit, which hosts 3.44 million gold ounces and 60.7 million ounces of silver, and is in close proximity to the prolific Penasquito mine.

The company's deep-pocketed suitors are Goldcorp and Minera Penmont Inc. (which is jointly owned by global mining giants Newmont Mining Corp and Fresnillo Plc). Both are vying to absorb Canplats for at least a quarter of a billion dollars.

Such eye-catching transactions, which typically offer lucrative returns to the shareholders of the acquired companies, are not just a by-product of a hot gold market. Not in Mexico, at least. This is because a growing number of North America's high-flying gold producers and legions of junior gold explorers are increasingly viewing Mexico as the optimum mining jurisdiction to do business."
- Marc Davis, BNW News (01/20/10)

"A Rick Rypien-Type Finish. Canplats has been advised by Minera Penmont, S. de R.L. de C.V. that it does not intend to make any further acquisition proposals to the company. Since the initial offer to acquire Canplats made by Goldcorp (G) last November, Penmont has stepped in with competing offers. As it currently stands, Goldcorp has matched each offer Penmont has put on the table. The current bid for Canplats is $4.60 per share in cash plus a share of a stub company, which will hold $10 million in cash and the Rodeo, El Rincon, Mecatona, Maijoma and El Alamo properties, and which has been given a notional value of $0.20 per Canplats share.

Canplats had been trading at a premium to the most recent offers by Goldcorp and Penmont, which suggested that investors had been looking for another bump in the bid by Penmont. With Penmont withdrawing from the battle, it looks like the current bid is likely a final offer. With Canplats no longer in play, investors will likely be taking money off the table and questioning where they should deploy capital. . ."
- Morning Coffee, Canaccord Capital (01/11/10)

"This morning Canplats received a competing and binding bid from Minera Penmont, S. de R.L. de C.V. (Penmont) detailed in the news release below. Penmont is jointly owned by Fresnillo (56%) and Newmont (44%) and are actively mining in Mexico. In the proposed transaction Canplats shareholders receive C$4.20 in cash, and shares in an exploration spinout valued at C$0.20. Under the terms of the agreement, Goldcorp has until December 31 to make a counter offer for Canplats.

I do not know if a counter offer will be forthcoming from Goldcorp but the current Canplats share price (~C$4.83) suggests the market thinks so. In the EI November 21 issue. . .we reviewed the Goldcorp transaction in some detail and concluded that Goldcorp could certainly afford to pay more for the El Camino Rojo gold deposit. Obviously Penmont agrees.

I intend to hold my Canplats to see how this plays out: it could be an interesting battle. We will push the profits into next year."
- Exploration Insights (12/23/09)

"I have watched the charts and trading activity of these juniors that we like and those we dislike. We've thrown out the dislikes; we've made money on some like Canplats now because Goldcorp bought them. The stockholders there obviously did very well, but there's more out there like Canplats."
- The Gold Report Interview with Roger Wiegand (11/27/09)

"On October 19 we sent out a trading alert to buy Canplats at up to C$2.40 per share for a short-term trade. In the October 24 letter I detailed the reasoning as follows:

The release of the Preliminary Economic Assessment report (PEA) this week confirms my earlier NAV calculations (see EI May 20, 2008) and belief that Camino Rojo is one of the best gold deposits available in Mexico. More importantly, the PEA now provides the rest of the finance and research side of the industry with hard numbers they can shop around Bay and Howe Street. It should also attract the attention of the management at companies actively mining or exploring in Mexico, including Gammon Gold, Minefinders, Gold Corp, Fresnillo, Kinross, Coeur, etc. The increased market awareness is the catalyst that I believe will narrow the valuation gap and take CPQ higher (assuming a steady gold price).

. . . The ultimate rationale behind the purchase, besides the obvious small bump in share valuation, probably has more to do with taking control of a very large and prospective land package. The geologic setting to mineralization at Camino Rojo is similar to their nearby world-class Penasquito deposit (~1bil tonnes grading 0.53g/t Au, 30g/t Ag, 0.32% Pb, and 0.69% Zn). Limited exploration by Canplats across the Camino Rojo package was encouraging; it has yet to be followed up on in any detail.

I do not know if another, higher, bid will be forthcoming. Certainly the economics would warrant such a move by another aggressive gold miner; I would be in there were I a mid-tier gold mining company. At any rate, Canplats' share price is now tied to Goldcorp's, which in turn is hitched to the gold price bandwagon, wherever that goes. The decision to sell or hold Canplats is (as always) ultimately in your hands and should be based on your financial situation and goals. I intend to hold on to Canplats for the time being and probably collect the Newco exploration spinout. That puts me at risk to the vagaries of the gold price.

Finally, Canplats raised and spent nearly C$24 million over a nine-year period exploring various properties in Mexico. The culmination of this effort is the successful discovery and sale of Camino Rojo, for a roughly tenfold (undiscounted) return to shareholders. The success is primarily due to two geologists (Perry Durning and Bud Hillemeyer) who kept their eyes and minds open as they prospected the Mexican deserts. This is what it's all about."
- Exploration Insights (11/21/09)

PRINT THIS PAGE EMAIL THIS PAGE