the speculator

This modest prospector has made some smart choices with underperforming investments and new fields - so we're coming on board.
Regular readers know we focus on trying to pick under-priced long-shots in the sharemarket and this week I believe we've found another in Jackson Gold (ASX code: JAK).
Since listing in mid-2002, this smallish prospector has amassed interests in a portfolio of mostly West Australian prospects with farm-outs to other parties, but finding the "big hope" has eluded it.

Until early this year its main exploration project was Wallbrook Hill, a large but relatively low-grade gold prospect 125km north-east of Kalgoorlie with a resource estimate of 544,200oz of gold. As a stand-alone project it was a marginal proposition, so the company sold it to Saracen Mineral Holdings (SAR) for $7m. Saracen owns the adjacent Carosue Dam mine and mill.

Settlement was an upfront payment of $2m cash plus 2.5m Saracen shares escrowed until the end of December. Those shares are now worth $1.07m. Another 5 million Saracen shares are payable when mining begins plus a royalty of $1/tonne of ore mined for the first 2m tonnes.

Jackson is intent on divesting various other non-core assets, but with its release from Wallbrook, the board sought a project that could be a "company maker". Managing director and geologist Brett Smith, who joined the board last year, believes they've found it in the Rio Colorado uranium project under the foothills of the Andes in Argentina.


In July, Jackson announced an exclusive option agreement with a private party to acquire 92.5% of the 762sq km project. It will earn 51% on completion of 3000m of drilling due to begin in the new year and the balance after spending a minimum of $US500,000 on exploration within three years.

Smith claims the Argentine government, which imports uranium for its two power station reactors (a third is being built), is keen to develop a local supply. Jackson has carried out channel sampling over 6km of the 16km strike. Of 53 samples, 40 returned anomalous results of more than 100ppm uranium.

Jackson's other major project is its Boolaloo copper-gold prospect contained within 1700sq km of tenements in WA's Pilbara, where surface sampling and ground geophysics have identified multiple targets over 5km ready to be drilled in the new year.

The company also holds interests in other projects including 700sq km of tenements embracing nickel targets in the Kanowna-Paddington area where Breakaway Resources (BRW) is earning 60%. Yet its market capitalisation is just $11.6m.