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8/6/13

More on Lowell Copper's (JDL.v) Ricardo project (from IKN222)

This was out in the subscription Weekly last Sunday.


More Lowell Copper (JDL.v)
"Cowards die many times before their deaths,
The valiant never taste of death but once."
Julius Caesar, Act 2, Sc II, ll 32-37

On Thursday we again got a Q&A from David Lowell on his new Lowell Copper (JDL.v) vehicle and the thoughts behind the Ricardo property that the company has picked up, this time at Mineweb (13). This whole issue was treated in some detail in IKN219 last month (with some follow-up in IKN220) but apart from noting that it’s once again interesting to see the interview-shy Lowell doing the promo thing with media, it wasn’t a story that I had planned to cover any further for the time being. Until a mail was received on Friday. The mail came from somebody who remains anonymous, but it’s fair to say that he knows the property very well and due to that, he could give a lot more background as to how the Ricardo concession came to be.

In the early 1990s the theory behind the hunt for the “lost part of Chuqui” (see IKN219 and other places, including that Thursday Q&A) was already almost certainly well known to Lowell, because his partner on many of his academic papers, John Guilbert (including that famous 1970 paper that defined porphyry deposits forever, mainly thanks to a neat little sketch), was in close contact with people working the area including one Richard Baker (who had been posted as an Adjunct Professor at the University of Arizona at Guilbert’s behest). To lapse a little into geol-speak, Baker had mapped the West Fissure (the key structure to the Chuquicamata deposit.) for Anaconda in the 1960s and claimed to have recognized that Chuqui was faulted, with the other half lying south of Calama by virtue of the now (infamous) supposed “left-lateral slip”. The upshot to this theory is the idea that Ricardo hosts the “the other half” of Chuqui. And in fact, the name of the concession “Ricardo” comes from the name of the self-proclaimed theory generator behind it, Richard Baker.

It also turns out that Baker was not only a bit of a snake-in-the-grass, but a desperate one too who had recently shunned the bottle. Although supposedly contracted by the University of Arizona and in charge of Guilbert’s Chilean field program, he spent most of his time in Chile that year doing virtually no work related to the university project, living large, getting the Ricardo claim staked under his name, and then pitching the project to anyone that was interested, all on university money, including big-name companies such as Rio Tinto. In the end Rio Tinto didn’t bite, but it did give Baker a consulting contract and royally pissed off John Guilbert since Baker had done precious little work for the university while on its payroll, then quit. What happened then is that the VP Exploration for Codelco took out an option on Ricardo, but the story goes that Codelco was just as keen to stop other people exploring Ricardo and finding something in their own back yard. From that point, we already know from the list in IKN219 about the exploration and drilling programs that have gone on at Ricardo and have yielded very little by way of results. We need to note as well that although not disproven, there has never been general agreement about the “left-lateral slip” theory among those structural geologists that have studied the problem and that drilling up to now hasn’t done much to help its cause. As for Richard Baker, namesake behind the Ricardo project and the founder of a theory that has managed to entice enough large companies and smart geological teams into looking at the property without finding anything of worth, he was found dead in his room at the Park Hotel in Calama sometime later in the 1990’s. He left his recently married wife with a hefty credit-card debt to clear up, too.

Meanwhile, since trading started in JDL.v the stock has been pushed up to 90c and the low volumes traded make it clear that it’s tough to get any sort of position, with small players wanting a piece having to pay up. The result is that JDL.v now runs a market cap of $62.16m and that’s a lot considering our previous calculation on the value here, now updated:

  • Market Cap: $62.16m (69.57m S/O)
  • Working Cap: ~$11m
  • Goodwill (i.e. hope, or "Lowell's Brain" to be generous with the wording): $51m.

So yes, if the quasi-legendary “other bit” of Chuqui is found there’s an awful lot of percentage upside to today’s share price. But if it’s not, there’s a helluva lot of percentage downside in play, too. However, you’re less likely to hear about that from the Vancouver promo crew.