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A New Neighbor Has Moved In, Duran Ventures (DRV.TSXV)

03/30/10 by  
Filed under Bourbon & Bayonets

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It is a well known truism that the best way to find a new resource is amidst the workings of an old mine – something our Featured Company, Duran Ventures (DRV:TSXV), continues to prove as it consistently develops its 100% owned Aguila flagship asset located in Peru. Aguila is a copper – moly deposit which hosts a past producing open-pit mine. Duran is striving towards proving up a multi-million ton copper ‘ moly resource and has an asset which continues to surprise our team at Pinnacle.

Key Fact: In 1998, Rio Tinto submitted, for Duran Ventures, a sample from the Aguila pit for metallurgical testing. Recovery for copper averaged higher than 96% and recovery of molybdenum averaged almost 91%.

We initially introduced Duran Ventures to our members in May of 2009 at C$0.11 per share and during our coverage saw its share price rise to a high of C$0.225, providing our members and staff with a great opportunity to take profits. Now, after significant development from the company, both from a property standpoint and management upgrade, we felt it prudent to re-introduce this investment opportunity to both our members and our own portfolio while it trades at C$0.14.

Since introducing Duran Ventures in May of last year, it has advanced itself very quickly from a fundamental standpoint. The company has raised in excess of $1.75 million since that time and put the money to work on its Aguila property, returning world class copper drill results such as the assays released in the February 23, 2010 news release. One example from that release was 396 meters of 0.69% Cu and 0.042% Mo in hole 10AGD-016 – A 0.98% Cu equivalent – unprecedented depth and grade. Duran’s January 13th news release reported 223.6 Metres of 0.51% Copper and 0.021% Molybdenum at Aguila.

Keep in mind, before our coverage initiated on Duran, out of the 16 previous holes drilled at the Aguila Target, including one from Rio Tinto, 15 of the 16 had an average grading of 0.447% Cu and much higher Cu equivalent. See table below:

Drilling has expanded Duran’s 100% owned Aguila deposit to the west, east and at depth, encountering higher grade porphyry than other companies in the region. The deepest hole is over 600m from surface down and remarkably, is still in copper mineralization.

It should be noted that Duran is operating in a highly sought after region of the world for copper mining. The Aguila deposit is located 60 to 70 kilometres north and along the same geological belt as the large Antamina Copper Mine currently being mined by Teck, BHP Billiton, Xstrata and Mitsubishi Corporation.  This region is considered among the most prospective in the world for the discovery of mineral resources.

The importance of the Aguila asset is illustrated by considering recent transactions involving copper deposits in Peru. In 2007, Northern Peru Copper Corp. closed a $455-million deal to be taken over by state-owned China Minmetals Corp. and Jiangxi Copper Co. The acquisition focused on the Galeno porphyry copper deposit. There were 27 companies that had expressed an interest in acquiring this project. Later that year, Peru Copper Corp. announced an acquisition by Chinalco to secure ownership of the Toromocho porphyry copper deposit in a deal valued at approximately $880-million.

After featuring a company our team continues to monitor and evaluate any strategic or material developments in the area. This leads us to our next and most important point. Duran has a new neighbor and they are making a lot of noise.

As expected, when companies return excellent results such as Duran has it can raise a few eyebrows and bring new miners to the area hoping to find similar results. What came as quite a surprise was when the world’s second largest silver producer showed up next door and started drilling near Duran’s claim line…

It has been confirmed that Peñoles has been drilling next door to Duran Ventures’ Aguila copper-molybdenum porphyry deposit.

Peñoles is the world’s top producer of refined silver, metallic bismuth, sodium sulfate and is the leading Latin American producer of refined gold, lead and zinc. Peñoles owns the world’s richest silver mine, Mexico’s richest gold mine, Mexico’s largest gold mine, Mexico’s largest lead producing mine and Mexico’s largest zinc mine. The company’s Racaycocha Discovery, next door to Duran’s Aguila property, is Peñoles only asset in Peru. Perhaps they are out to find similar results to those found at Duran’s Aguila property.

In our research we found this quote taken from Peñoles in reference to its Racaycocha discovery next door to Duran’s Aguila property.

“We drilled 7,000 meters in 2009 to quantify the copper and gold porphyry deposit, which has potential to become an open pit mining operation. Current results indicate mixed mineralization in sulfides hosted in breccias and disseminated across a vast area whose boundaries have not yet been explored. In 2010 exploration will continue in order to reach an estimate of mineral resources.”

The reference of the report is from part IV Projects:

Furthermore, Duran drilled a hole just 50 metres off of Peñoles claim line which sits on the Aguila property and discovered yet another zone that hadn’t previously been identified. It looks like it could be the start of yet another mineralized zone on the Aguila property which has been appropriately named, ‘Aguila West’. The key point to remember is that this drill hole, which returned, starting from surface, 71.0 Metres of 0.62% Copper, is just 50 metres off of Peñoles claim line. Obviously Duran wants to find out if, in addition to what they have already discovered, they may share a large mineralized zone with one of the world’s biggest miners.

It is believed Duran’s Aguila copper-molybdenum porphyry deposit is part of a large porphyry cluster in a major mineral district actively taking shape; Peñoles and Duran Ventures are holding all the key ground. It is important to note that Duran’s mineralized zones at Aguila, Pasacancha and Aguila West area are situated on a south facing slope and Peñoles’ Rayacocha Project is located across the valley on the north facing slope; an ideal mining situation since any large operation would be established between the two areas.

Our readers must note that Duran’s geophysical survey defined 8 anomalies and the company has drilled just two of them and already intersected strong mineralization. What is very important to note is that the copper mineralization at Aguila appears to flank a 1400 meter long geophysical anomaly. This anomaly has only been drilled along 300 meters of its length!  They are planning an active drill program for 2010 – a key reason why we are reintroducing you to Duran Ventures now.

To understand the potential of Duran as an investment opportunity we’ve taken a quote from its CEO, Jeffrey Reeder, P.Geo.

“…to the east of our main drill proven porphyry at Aguila is a zone that on surface our copper numbers are comparable to a lot of other porphyries which shows we have a larger area than was previously recognized … we have done quite a bit of drilling,mapping, and geophysics and feel we can show the market this thing could have the potential to be in the 200-300M tonne range; and if it is, with those grades, then we are comparable to many of the other copper explorers in Peru that have these $100M – $200M+ market caps.”

Key Fact: Duran’s current market cap is roughly $13 million

As mentioned earlier in this report, Duran has gone through a management upgrade since our coverage began – a necessary step as they’ve advanced the Aguila property to a stage where top talent is needed and a team with extensive experience in exploration & mining in Peru.

Duran’s new CEO, Jeffrey Reeder, P.Geo, who was brought on in the second half of 2009, brings a wealth of experience from a production and exploration standpoint. Furthermore, Mr. Reeder has worked specifically in Peru on porphyry systems for the past 15 years and is fluent in Spanish.

Mr. Reeder is an expert in copper porphyry systems and earlier in his career worked for Hunter-Dickenson for five years where he took numerous porphyry systems through exploration to advanced staged.

At this stage in the game, Duran needs a CEO who understands what it takes to develop these types of mineralized assets (Aguila) and how to properly value them. Jeff Reeder is a rare breed of experienced geologists who not only understand porphyry systems from an exploration and production side, but the value they create in the marketplace as well.

Round 2 of our coverage on Duran Ventures has begun.

All the best with your investments,

Pinnacle Digest

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