(By Anthony J. Alfidi) Today I got a promotional mailer from the Jefferson Financial people titled "Mining Share Focus." They're touting Cayden Resources (CDKNF on OTC or CYD.V on TSXV), a junior Canadian-based explorer that's almost low-priced enough to be in penny stock territory.
The management team is long on finance expertise but thinner on geological expertise than I'd prefer. The CEO is a financier, not a geologist, and he and other members of the team still have active roles in the management of Keegan Resources (KGN). I won't focus on Keegan in this article other than to say it's difficult for a management team to devote itself fully to more than one company at a time. I consider side projects like Cayden to be a distraction unless they can be folded into the main company's portfolio.
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Speaking of projects, Cayden currently has three that are active. The Morelos Sur project has a 43-101 report with a resource assessment, although I would prefer to see 2P reserves. The El Barqueno and Quartz Mountain projects have no technical reports yet and are still just options.
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Let's check out their financial statements. Cayden had $1.7M in cash on June 30 of this year and had a net loss of $525K in the three months ending on that date. This burn rate will require them to raise additional capital no later than mid-April 2013 if they are to continue exploring their properties.
There's some promise here, especially if the Morelos Sur project's final 2P numbers show improvement over the inferred mean estimated grade of 1.38 g/t Au. It sure would be nice to see a junior find something a major wants to acquire.
Full disclosure: No position in Cayden Resources or Keegan Resources at this time.