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Dhanoa Minerals Ltd. (OTCBB: DHNA)
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Dhanoa Minerals Ltd. (OTCBB: DHNA) is a natural resource exploration company formed for the purpose of acquiring, exploring, and developing natural resource properties . It is acquiring, exploring and developing existing and new natural resource properties thought to contain significant quantities of gold and other minerals. The Company was incorporated in July 2005 and is headquartered in Nevada.
The Company owns a 100% interest in two adjacent mineral projects in Canada - Close-Allies I and Close Allies II. In addition, Dhanoa holds an 80% interest in an Ecuador mining company, Promenasa. The Company also recently acquired four properties that are part of the Bonanza Project in the Bellarica gold mining camp in Ecuador. These are gold producing mines and Dhanoa plans to significantly increase production by upgrading extraction operations.
Dhanoa anticipates production at the end of its first year (ending June 2008) to be approximately 100,000 ounces of gold. At recent gold prices of approximately $680 per ounce, the value of 2008 production would resuly in approximately $68 million. In addition, the Company expects to double production the following year to approximately 250,000 ounces worth around $170 million at today's prices. Investments the Company is making in upgrading its processing faclities are expected to result in a 40% improvement in the production recovery rate from its existing faciliies.
Dhanoa to benefit from rising gold demand
Demand for Gold rose from 3,188 tons in 2003, peaked at 3,728.7 tons in 2005, and has since declined modestly in response to higher gold prices. The outlook is for continued demand growth, fueled by world economic growth, rising demand for gold from China and India, increased use of gold in industrial and jewelry applications and currency hedging by governments, central banks and private investors.
Rising gold prices drive gold mining profit growth
Between 2001 and 2007, gold prices increased 15.6% to around $679.37 per ounce in April 2007. The Chairman of US Gold Corp expects gold prices to rise from current levels to at exceed $2,000 and possibly reach $5,000 per ounce by 2010. Dhanoa is poised to benefit from rising gold prices as a result of its increased production and new development projects.
Aggressive acquisition strategy facilitates expansion
Dhanoa has been expanding by acquiring land holdings in Ecuador. The Company acquired an 80% ownership interest in Promenasa, S.A., an existing mining company. Recently, the Company acquired four lands on its Bonanza Project with active gold mines in the Bella Rica Gold mining camp in Ecuador. This acquisition of producing properties enables the Company to approach investment banks, brokerage firms and private investors for expansion financing.
Ecuador is mineral rich and underdeveloped
Ecuador is a mineral rich country. The Company is acquiring land holdings in Ecuador which are unexplored or under explored. Ecuador offers a favorable regulatory environment, a large labor pool, no restrictions on capital flows and relatively good infrastructure. Three of the Company's mines are located on the Ecuadorian metallurgical gold belt which is believed to contain more than 10 million ounces of gold.
Superior technology boosts production from existing mines
Although, mineral rich, Ecuador's mineral resources have not been fully developed due to outdated technology. However, favorable changes in the political climate and mineral laws are encouraging foreign investment and new extraction technologies. The Company is planning to increase its mineral production by upgrading the extracting technologies used at the Bella Rica gold mining projects.
Strong Management
Both the executive and mining management team of Dhanoa are highly experienced and qualified. Their proven expertise is one of the reasons the Company has been able to close acquisitions and raise over $5 million over the last six months.
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