Reno, Nevada (OUR-STREET) 4/7/11 – I have received several requests from followers to review Coyote Resources Inc so I spent a little time on their website and EDGAR filings and this is my unbiased conclusion. This is a relatively new company with modest capital resources (around $400k in cash as of 12/31) and some recently acquired properties which were acquired for $10k down and a note for $950k.
Here is what it says about the property in the recently filed 10K.
The Tonopah Extension Mine is without known reserves and is an exploration property. There are no current formal detailed plans to conduct exploration on the property, although we are current assessing the property to determine our plans to conduct exploration on the property. As of December 31, 2010, we have incurred costs on this property in addition to payments made pursuant to the Tonopah Agreement. We are not able to currently ascertain the amount of any future costs related to the exploration of this property.
The Tonopah Extension Mine is an exploration property located in south-central Nevada, midway between Reno and Las Vegas. Since 1930, we are not aware of any production or exploration on the Tonopah Extension Mine. The Tonopah Extension Mine had been flooded and therefore no mining or drilling could be conducted on the property over the last 80 years. The Tonopah Extension mine is within the city limits of Tonopah and all water and power are available to the property. The Tonopah mining district is centered on the town of Tonopah in Nye and Esmeralda Counties near the intersection of two major highways, one north-south and the other east-west. U.S. Highway 95 crosses the property and access is available by all normal means of travel, such as automobile. Total land holdings comprise 958 acres of mineral rights and 368 acres of patented surface rights with additional holdings of 487 acres of patented surface rights for mining purposes within the Lambertucci Ranch holdings. No plant or equipment is present on the property with the exception of a steel head frame that appears to be in good condition. There is no other equipment, infrastructure or facilities on the Tonopah Extension Mine.
According to Table 29, found on page 109 of Nevada Bureau of Mines and Geology Bulletin 92, Geology of the Tonopah, Lone Mountain, Klondike, and Northern Mud Lake Quadrangles, Nevada, which was authored by Harold F. Bonham, Jr. and Larry J. Garside in 1979, approximately 174 million ounces of silver (“Ag”) and 1.8 million ounces of gold (“Au”) were produced from 8.8 million tons of ore, primarily between 1900 and 1940, in the Tonopah mining district. Production at the Tonopah Extension Mine was about 25.5 million ounces of silver and 264,000 ounces of gold from 1.8 million tons of ore, according to the 1953 report, University of Nevada Bulletin, Vol. XLVII, No. 1, January 1953, titled History of Fifty Years of Mining at Tonopah, 1900-1950. The report was authored by Jay A. Carpenter, Russell Richard Elliott and Byrd Fanita Wall Sawyer.
The property is also situated on BLM property which makes permitting and ecological compliance very challenging at best. Remember, Coyote Resources will be working under Government guidance and supervision and regulations. Never a fun thing.
So, you might ask yourself, if this is basically raw, unexplored property with the exception that this district was heavily mined in the early 1900′s, why in the world is it trading at a market cap exceeding $91 million? It’s simple really. Someone is pushing a very heavy stock promotion making claims like “Buy COYR Now For Just $1.25 Before Shares Hit $10.21! and “Coyote Resources has acquired two land holdings that combined, hold an estimated $24.75 Billion in Gold.” It’s hard to determine which claim is more outrageous.
I think from those two examples, you get the idea. To date Coyote Resources, in my opinion, is one to avoid unless you’re a day trader. The liquidity of this stock should make it attractive to both longs and short sellers but if you want to know where the gold will be, it will be the gold coins and bars bought with the proceeds from the sale of COYR stock taking place right now in conjunction with the pump.
Our Conclusion: Coyote Resources is great for day traders but avoid if you’re looking for an investment in a good gold company.
Disclaimer: We don’t have any interest in Coyote Resources stock or the company nor are we being paid to write this article. As always, consult an investment professional prior to investing in any stock.
