Patagonia Gold (formerly HPD Exploration)

As I declared moons ago, I saw the writing on the wall and got out in Oct '04 after Coyhaique was declared a write-off and Crespo's promising early near-surface results turned out to be supergene enrichment. I still don't fully understand why the early Coyhaique grades boasted in the AIM admission document proved impossible to reproduce and it has left me somewhat lary.

There is better news for Celtic and other holders, though. Since supergene enrichment is the result of mobilisation and re-deposition of gold, it does however indicate the local presence of gold. It's certainly there. Getting it out economically is the trick.

While everyone has been happily focussed on gold because of the Esquel legacy, I'm left wondering whether there might not be bigger mileage in copper at Gastre. Here's a clip for the recent interims:

"Mapping and sampling of the area surrounding and between the Copper Hill area (values >3% Cu and 170g/t Ag) and the Copper Dome area (values >1% Cu and >50g/t Ag) continues to identify other targets, including a siliceous stockwork zone located north of Copper Hill with chip-channel values of up to 0.292g/t Au, 4g/t Ag, and 0.75% Cu. This is the same general area where previous rock chip samples have returned values up to 5.1g/t Au and 53g/t Ag..."

IF the (?rock chip) grades at Copper Hill translate into similar results over half-decent widths at drilling, and the strike length is 4.5km, they have stumbled on a real find. Though Marc Sale & co. might object to the phraseology!

At £16.4m market cap, this still strikes me as too expensive for a company without so much as an inferred ounce of resource. IMHO, far better value can be found elsewhere. That said, no-one would be surprised if grass-roots exploration weren't the whole game. Management still strikes me as worth backing in principle but IMO PGD remains a speculative punt for now.

Just my tuppence. Your turn, John!
David