Many of the folks who own Teuton or have expressed some interest in the stock have only “heard” me ranting and raving…. what I am doing in the following series of letters, which I will title “Teuton Links,” is link to some of my posts on stockhouse.com and also other credible posters, some of whom are very knowledgeable, including at least two of them who are geologists.

By way of background, I’m not going back to my posts when the stock was 8 cents a share; I’m not on an ego trip or seeking a pat on the back.

To recap briefly what’s going on so you can follow the posts, I need to give you some background on the properties we own as well as some background on some of the bigger companies working the area. This letter might be a bit long winded, but it will give you facts, not bullshit.

I’ll start with the one sentence easy ones:

The Golden Triangle of British Columbia is home to three historic mines, one of which, Eskay Creek, produced TONNES, not ounces, TONNES of gold and made Barrick Gold the giant that it is today. Barrick is a blue chip stock now. So “GT” is “Golden Triangle.”

“Junior exploration companies” means companies that LOOK for gold; when they find it, they have no intention of mining it because it is simply too expensive to do so on their own. How do they make money? They drill holes, usually with diamond tipped drills, and remove core samples, which they then send to a laboratory for assays. Based on the amount of gold in the assay, times the number of holes, the distance away from each other these holes are, they are often able to make an estimate of how many ounces are on their property. This amount is fluid; that is, a second phase drill program can continue to ADD to the estimate.

Under a Canadian law, 43-101, guidelines are given for “indicated” resources, “inferred,” and “reserves.” Reserves being the strongest and inferred being more of a guestimate. Reserves are calculated using closer spaced holes and can give a better idea of the total ounces contained. All three are important.

Hence, companies that may be, say, 20 cents a share, if they find a lot of ounces, can — can — increase their share price simply by finding significant deposit(s). The prime example in the GT is Seabridge Gold, which was a penny stock in the early 1990s. Today it is listed on the NY Stock Exchange and sells for $28 a share. Their Kerr Sulphurets Mitchell (KSM) deposit has put them on the map. More and more gold continues to be added to their 43-101 estimates. http://www.seabridgegold.net/projects.php (Symbol on NYSE is SA.)

Seabridge has other zones that are going to be blockbusters, including their Ironcap zone, which is close to Teuton’s boundary. Their plan is the same as all juniors: Keep adding ounces until some Giant Gold Miner realizes that the billions they would pay to acquire, say, a Seabridge will be made up by mining the gold, copper, silver, moly, whatever the cocktail. In the case of Seabridge, simply selling off the copper could conceivably pay the costs of mining the gold…. But now I’m getting off track.

Another company that’s big in the area is Silver Standard (symbol SSRI.) Their Snowfield deposit is an adjunct to their worldwide silver properties, including one operating mine. Their Brucejack property is close to already-proven Snowfield and is trending south (towards Teuton, but more on that later.)

Within the Brucejack property are “zones,” which so far are producing phenomenal amounts of gold per tonne. Off the charts stuff, but much of which has not yet qualified for a 43 101 estimate as much more drilling needs to be done. Silver Standard is drilling a phenomenal amount of holes in a program there: 24,000 meters of drilling!!!!!!!!!!!!!!

You’ll see discussions of these facts in the posts I’ll link to, but I want you to understand them in context.

Another big company is Imperial Metals; their Red Chris discovery is also phenomenal and WILL BE A MINE. THEY ARE MINERS AS WELL. We have property nearby, but I’m discounting it for now.

Now, Teuton’s business model is to not burn cash*, they “option out” properties. Since we have more than 40 properties, there’s a lot of firepower. Dino Cremonese, our president, has accumulated — and this is important — 300,000 acres of Golden Triangle land, much of which is near or adjacent to major discoveries. If you have 20 fishing lines in the water where Giant Tuna swim and landing one gets it done, that’s Teuton. Put another way, it’s like owning 300,000 acres of land around Sutters Mill in San Francisco in 1848, just before the gold rush. I make that analogy in a recent post.

Generally speaking, a company can option a property from us by contracting to spend X millions of dollars on drilling, with the hope they will find something. Once they “earn in,” they will own the contracted-for percentage of the property, usually 50 percent, often with an option that if they spend more or bring the property to feasibility study (more about that another time), they can earn in perhaps another ten percent or so. Remember, by doing this, Teuton retains half but does not have any expenses.

Here’s a very brief summary of our prime prospects:

TREATY CREEK – Already proven to have similar grades to neighboring KSM deposits, our optionee seems to have, for the moment, stalled in terms of having the cash to do more drilling this season. They’ve already spent many millions of dollars. So that property remains in our portfolio but is probably not a factor this year.

BONSAI – 6km from the legendary Eskay Creek mine. Scientists using sophisticated electromagnetic studies and geologists examining this anomaly feel they might find “Eskay II.” Copper Creek Gold, who has optioned our property, are increasing spending on drilling this summer and plan to spend 1.25 million instead of their required $250,000. Finding Eskay Creek II might be a dream; it’s the Holy Grail, in point of fact. But their stock has gone from 3 cents to 22 cents. You be the judge; promotion or reality… I think it’s a combination of both.

HIGH PROPERTY – To me, this is most exciting because it’s on the Brucejack fault. It’s close, really close, to where Silver Standard ($17 a share) is drilling. Our geologist and Dino have discovered a nice sized gossan on the property. This can be so big, I’m not even going to write about it here; you’ll see discussion in subsequent links to discussion posts. Of course, those discussions are simply opinion. Before investing, one should do their own due diligence.

FIJI PROPERTY – Jointly owned by Teuton and sister Company Silver Grail, it’s near a big discovery and may be drilled by us this year. If you want to do some investigation, Google Bravo Gold, which is drilling nearby; their chairman has a video interview on www.smartstox.com and there is also an interview there of our president. The Canadian symbol is TUO. The interview took place a few weeks ago so it’s still timely.

THE CLONE: This one “hit” last year with the richest samples in the GT. But I will need to see this zone expanded, but our optionee’s stock moves solely on this property and they are “pushing” hard to market their stock. Drilling begins around August 28. This can be a monster too.

There are scores more properties; I won’t bore you anymore.

Teuton will drill itself or optionee these properties this year, in my opinion, because things are subject to change:

As soon as I have an opportunity, I will send some links out to my posts and posts of “Caliche,” who has geological training; “Reichel,” who IS a geologist; “Omniportent,” who is very bright, myself “Redrum180,” “Sleo,” who has been an investor for many years and is close to management….Just an interesting bunch of folks.

To sum up, Teuton “came alive” Friday. It closed at .475 (47 1/2 cents CAD*) Volume is coming in and the basic thinking is “one hit and we’re over a buck.”

Subsequent emails will have the links I discussed. Full disclosure, I have a position in Teuton but am not a seller; in fact, I bought more on 8/20.

Mark B

August 22nd, 2010
Categories: Uncategorized . Author: caliche