Americas Petrogas BOE.V attracts another major player ExxonMobile

I love waking up to see one of my stocks up 36% especially in a very tough down market. I really like Americas Petrogas and their slow and steady growth strategy. Americas Petrogas recently drilled a shale oil exploration well with major partner Apache. The results are not released yet but I believe that they are good enough to warrant Americas Petrogas to buy out is partner Energicon's 19.5%.

You can read my mid year recap.
http://vancouverventure.blogspot.com/2011/08/americas-petrogas-boev-update.html

Obviously the shale oil play in the Neuquen Basin is turning out to be attracting the major oil and gas players.

Today Americas Petrogas attracted another major to their 164,000 acre Los Todos block, ExxonMobile.

Here is the news release:

"Americas Petrogas" or the "Company"), a Canadian company, is pleased to announce that it has, through its wholly-owned Argentina subsidiary, Americas Petrogas Argentina S.A., entered into a farm-out agreement (the "FOA") with ExxonMobil Exploration Argentina S.R.L., a wholly-owned subsidiary of Exxon Mobil Corporation (NYSE:XOM - News; "ExxonMobil") for the exploration and potential exploitation of Americas Petrogas's Los Toldos blocks (163,500 gross acres or 255 sections or 660 square kilometers) located in Neuquen, Argentina. The Los Toldos blocks are located in the western region of the Neuquen Basin and are in a favorable location relative to other recent discoveries of shale oil and shale gas in the Vaca Muerta formation.Barclay Hambrook, President and CEO of Americas Petrogas, stated "As the world's largest publicly-owned integrated oil and gas company, ExxonMobil brings vast experience, technology, research and financial resources to this joint venture with Americas Petrogas."
Pursuant to the terms of the FOA, ExxonMobil has committed to fund US$53.9 million (including taxes) during the exploration phase with a further US$22.4 million (including taxes) if the parties proceed to the exploitation phase, for a total potential initial investment of US$76.3 million. This focus of exploration, exploitation and other related activities is expected to be directed towards the Los Toldos 1 and 2 blocks. ExxonMobil will earn a 45% interest in the Los Toldos blocks with Americas Petrogas retaining a 45% interest and the government entity, Gas y Petroleo del Neuquen ("G&P"), maintaining a 10% interest. ExxonMobil will also provide technical assistance on the Los Toldos blocks. The FOA is subject to approval by G&P.
Americas Petrogas is the operator of the Los Toldos blocks and expects to spud the first well in the fourth quarter of 2011 with the primary target being the unconventional Vaca Muerta formation and potential secondary targets in other conventional and unconventional formations.
In addition to the Los Toldos blocks, Americas Petrogas has five other blocks within the Neuquen Basin's western shale corridor, including the Huacalera block which is located south of the Los Toldos blocks and which was recently drilled, cased and cemented, having intersected 1,742 feet of Vaca Muerta shale. In published reports, the U.S. Energy Information Administration has cited a risked, recoverable resource of 240 trillion cubic feet ("TCF") of gas for the Vaca Muerta shale in the Neuquen Basin.
Mr. Guimar Vaca Coca, Managing Director of Americas Petrogas' Argentina subsidiary, said, "We believe the next major shale development outside of North America will be in the Neuquen Basin. Our Argentina management and technical personnel look forward to working with ExxonMobil to explore the substantial hydrocarbon potential of the Los Toldos blocks."
Daniel De Nigris, General Manager of ExxonMobil Exploration Argentina, said, "We are pleased to be working with Americas Petrogas on the highly prospective Los Toldos blocks and if successful, look forward to providing clean and reliable energy for Argentina."
About Americas Petrogas Inc.
Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has oil and gas interests in numerous blocks involving exploration, development and production. Americas Petrogas has proven conventional oil and gas reserves, as well as evolving unconventional resource plays including shale gas, shale oil, and tight sand oil and gas in Argentina's prolific Neuquen Basin. For more information about Americas Petrogas, please visit www.americaspetrogas.com
About Vaca Muerta Shales
The Vaca Muerta Shale is one of two principal source rocks in the Neuquen Basin of Argentina. The shale is late Jurassic-early Cretaceous in age, covers an area of approximately 8,500 square miles, varies in depth between 5,500 to 14,000 feet and in places is up to 2,000 feet in thickness.
The Vaca Muerta characteristics are believed to be similar to shale reservoirs such as the Eagle Ford, Haynesville and Horn River in North America which have so far resulted in discoveries of both shale gas and shale oil. The shale has recently become the focus for many of the important shale gas players in North America, including Apache, ExxonMobil, Total as well as YPF in Argentina.

Fortunately for the time being Americas Petrogas still trades on the Venture Exchange so a lot of Institutional investors can not buy the stock. At this point I am sure that Americas Petrogas would qualify for a Toronto Stock Exchange listing. Another note going forward is the possibility of the GrowMax Agri potash concession spin off to keep me excited.

 

Paget Mineral's releases some promising Rare Earth results

Paget Mineral's released some interesting Rare Earth results with their option partner Rare Earth Industries. It looks like the Management of Paget will have their interest carried by Rare Earth Industries by spending $1,000,000 over 3 years on the Mount Bisson property. Click on the above link for the complete news release, here is the broad strokes:

Paget Minerals Corp.'s option partner Rare Earth Industries Ltd. has released the results from its first tranche of assay results from the phase 1 exploration program on the Mount Bisson rare earth element project in British Columbia (see Rare Earth's press release dated Aug. 22, 2011). Notable results include three samples which assayed over 10 per cent total rare earth oxides and 11 samples which assayed from 5.43 per cent to 10.86 per cent TREO. Significant results of the bedrock sampling program presented in the attached table focused on the Central zone where Paget previously documented a total rare earth element value of 8.64 per cent (equivalent to 10.14 per cent TREO). Rare Earth (formerly Seymour Ventures) holds an option to acquire a 60-per-cent interest in the project from Paget. See Paget news releases of Aug. 25 and Nov. 18, 2010, for more details.
David Volkert, president and chief executive officer of Paget, stated: "The total REE values reported by Rare Earth at Mount Bisson are significant in light of the grades reported by other rare earth minerals explorers in Canada. We are encouraged by the progress Rare Earth is making and look forward to results from the phase 2 exploration in September."
Rare Earth reports that phase 1 results have achieved:

• Delineation of a 100-by-500-metre zone of high-grade REE mineralization in allanite-rich veins, which range from 1.51 per cent to 10.86 per cent total REO (Central zone), that remains open along strike;
• Verification of high-grade TREO values obtained by Paget in 2010 by replicate sampling by Rare Earth's qualified person (10.14 per cent versus 9.98 per cent).

12.1 million shares since June 27th.

Cap-Ex released the results of a small trenching program on their Porky lake property this week that looks promising but the market is waiting for the drill results of Block 103.

The summer reconnaissance program returned encouraging results including PR8, a 1.2-metre channel sample from blue dense hematite locally mixed with chert, which returned 62.65 per cent iron and 8.75 per cent silica, and sample PR1, a 0.4-metre channel sample from blue dense hematite mixed with chert, which returned 54.18 per cent iron and 21.2 per cent silica. During the visit, samples were collected over a 750-metre strike length of the hematite-bearing zone, which consists of layers of dense, blue hematite with an estimated total thickness of 91 metres.

The management will probably postpone the Block 103 results until after the Labor Day weekend as August is when most market participants are on vacation.

Meanwhile 12,100,000 shares have changed hand since June 27th around the time the 4 month hold was taken off the 6,000,000 $0.30/share private placement. It appears that the stock price is trending towards the private placement price of $0.30/share and I would expect support there or the sellers to exhaust themselves.

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Caza Gold CZY.V, Teslin River TLR.V and Cap-Ex Resources CEV.V updates

Caza Gold CZY.V

A few updates this week to comment on from three of my holdings Caza Gold CZY.V, Teslin River Resources TLR.V, and Cap-Ex Resources CEV.V.

I will start with Caza Gold CZY.V, this week the BC Securities Commission requested that the Company retract a statement of resources reported form the Mexican Government in regards to the potential of their Santiago property.

In its Oct. 9, 2009, news release, the company disclosed a Mexican government 2006 estimate of the fixed tonnage potential with associated gold and silver grades for the Santiago property. The news release cautioned that this was not a resource; however, NI 43-101 prohibited its disclosure because the estimate was not known to be based on assumptions, methods and parameters suitable for estimation of fixed quantities and grades, was not estimated by a qualified person and did not have attached resource classification as required by NI 43-101. The company retracts its disclosure of the Mexican government 2006 estimate of the fixed tonnage potential and associated gold and silver grades in its Oct. 9, 2009, news release and clarifies that it does not have any other historical or current resource estimates suitable for disclosure at its Santiago property. In the event that the company receives a material resource estimate it will promptly disclose the results and file a technical report as required by NI 43-101.

Anyway after this little error Caza Gold issued an update to sooth any jittery investor fears. The Company issued an update but there was nothing in it to lift the stock price out of the $0.30/share range.

The broad strokes of the second quarter and third quarter are as follows:

Second-quarter review:

• Donald Cameron, MSc, geology, appointed as Caza's new vice-president of exploration;
• Phase 1 drill program commenced at the Santiago gold project in Chihuahua, Mexico;
  • 2,000 metres of core drilling was completed on the low-grade bulk-tonnage Road zone;
  • The high-grade multiple-vein Cliff zone will be drilled after the rain season;
• Phase 1 drill program now under way at the Moris gold project in Chihuahua, Mexico;
  • 4,000 metres of core drilling has been completed on the bulk-tonnage Balleza zone;
• Reconnaissance exploration work identified several new gold target areas at the Los Andes gold project, Nicaragua;
• Regional exploration in Nicaragua led to the identification and acquisition of seven additional high-sulphidation epithermal gold systems similar to Los Andes.

Third-quarter outlook
The outlook for the third quarter will include:

• The reporting of phase 1 drilling results from the Santiago and Balleza projects in Chihuahua, Mexico;
• Evaluation of mapping and sampling results at Los Andes, and selection of top-priority gold targets.

Given today's market conditions Caza is trading at the $0.30/share support level. Caza will have to produce some pretty good drill results to support a higher share price, if this does not materialize December tax loss selling could break the current support level lower.


Teslin River Resources TLR.V

Interesting thing on Teslin is the Company released a news today following up the recent acquisition of Queensgate Resources. Just last week Teslin completed the Queensgate take over and the Company has already completed a 1800 meter drill program on the Mustang property.

Teslin River Resources Corp. has completed an RC drill on the Mustang property located 20 miles southeast of Gabbs, Nye county, Nevada. Assay results from the drilling are expected to be announced within the next few weeks. The property is eight miles southeast of and possesses a similar geological terrain as the Paradise Peak mine, which produced 1.5 million ounces of gold and 40 million ounces of silver between 1985 to 2001. The Mustang property comprises 66 claims that are 100 per cent owned by Teslin.
"We are excited to be moving forward with our work in Nevada and looking forward to updating our shareholders with the results," stated John Burgess, president and chief executive officer of Teslin. "With the support of Resinco Capital Partners, our largest shareholder, we were able to keep the momentum going while the recent corporate changes were completed. Now we will be hitting the ground running and look forward to advancing the project after evaluation of the drilling results."

Eight drill holes were completed, each to a depth of 200 to 250 metres, for a total program of 1,800 metres. Four holes were centred around an anomalous 2005 drill hole. The 2005 hole included intersections being seven metres grading 0.14 gram per tonne gold and 21 metres grading 0.12 g/t gold and 20 g/t silver. Two of the holes were located in the northern portion of the property in the vicinity of small surface outcrops. Samples from the outcrops included assays up to 11.9 g/t gold and 74.1 g/t silver. The final two holes of the eight-hole program were drilled in the southern portion of the property in the area of a highly anomalous surface outcrop.

Nice to see the management of Teslin being aggressive in regards to the Queensgate acquisition. Too bad the share price does not reflect the same aggressiveness. As I write this the stock is down $0.02/share on thin volume, trading at a paltry $0.07/share.

Cap-Ex Resources CEV.V

The last time I wrote about Cap-Ex in my mid year review I seemed to have ruffled a few feathers as I was called amateur and that my blog was a piece of shit and that I was an idiot. I had indicated that the $0.35/share and the $0.45/share private placement was going to push the stock down into the $0.40/share range. I also said that the upside was going to be capped at $0.75/share due to the warrants. Never underestimate the power of cheap stock to push prices down.

I even posted a chart of what I thought might happen.

And here is what really happened.

I guess I was right. 

It appears that Cap-Ex management has come to odds with the local Innu community, this can drag out the development of their properties until all parties are satisfied. Judging by this new release both side are not seeing eye to eye.

The Innu of Uashat mak Mani-Utenam (ITUM) are outraged by the arrogance of Vancouver-based Cap-Ex Ventures Ltd. which hopes to develop a potentially large iron ore deposit on the border between Quebec and Labrador, an area in which ITUM holds traplines recognized by governments. In order to have its voice heard, ITUM will visit the exploration site in August and demand that Cap-Ex Ventures' management immediately cease these reprehensible activities on the territory and honour its word.
"The development of the mineral potential of the Labrador Trough must absolutely respect the rights of aboriginal peoples, as required by the government of Newfoundland and Labrador. Cap-Ex Ventures' actions are in complete violation of these fundamental principles and even disregard agreements Cap-Ex Ventures made with ITUM as recently as June 24. It must stop immediately," stated Chief Georges-Ernest Gregoire.
ITUM also finds it unfortunate that Cap-Ex Ventures' disrespectful attitude reflects negatively on other mining companies that are hoping to develop the mineral potential of Quebec and Labrador in a manner that respects the environment, local populations and first nations values. "Other mining companies as well as investors must be made aware of Cap-Ex Ventures' attitude. We must all keep our eyes and ears open, and remain vigilant to ensure that this way of doing things does not become the norm," added Mr. Gregoire.

Cap-Ex did release today the completion of 3000 meters of drilling on their Block 103 and results are pending. I have opted to set an exit on Cap-Ex at $0.65/share with an open order. I believe Cap-Ex could trade back up on results of the recent drill program. Going forward Cap-Ex has resolve the issues with the Innu and the market needs to digest the $0.35/share and $0.45/share private placement.

Reinforcing the case for Gold and Silver as a store of wealth

I usually reserve this blog for the discussion of the stocks that I buy and for the reasons behind the purchases. I also like to explain the life cycle and pitfalls of investing in junior speculative stocks for those that are new to investing. Lately I have changed my strategy to buy juniors with assets/money/production/near production. As well as owning physical metals also.

Let me explain why the change in strategy.

Starting with the austerity problems in Europe and the deadlock over the US Congress to raise their debt ceiling and the subsequent 11th hour deal to get the deal done I have become worried about the markets.

The system in the United States is broken and sure, raising the debt ceiling by $2 trillion dollars helps today but wait 2 more years!

It has become obvious that there is no political will to make the tough structural changes to the tax code in the United States and no political will to trim government spending.

The result of the European and United States problems is the continuous printing of fiat currencies to try and stimulate the economy. Gold has surged to all time highs of $1800/ounce making it the debutant at the ball. Silver on the other hand is the ugly one in the corner. Why is that? well silver wears two hats, one industrial and one as wealth storage. It trades up with wealth storage then gets hit on fears of economic slow down.

Unfortunately for silver it has not surged like gold, fortunately though Silver has not lost value either.

If you have 30 minutes in your day I have found 3 interesting journalistic pieces that confirm the dire situation the United States faces going forward. Honestly, after watching the political posturing during the debt debate I do not think the United States has the political will to turn the ship around.

The first read is Warren Buffett case for raising the taxes on the rich in the United States. Click on the teaser to read the whole story.
 

Billionaire Warren Buffett urged U.S. lawmakers to raise taxes on the country’s super-rich to help cut the budget deficit, saying such a move will not hurt investments.
“My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice,” The 80-year-old “Oracle of Omaha” wrote in an opinion article in The New York Times.

The next is a piece that I saw on 60 Minutes on Sunday evening on the exodus of Corporate Americas head office to minimize paying taxes in the United States. Click here for the 60 minute episode.

The last is from www.zerohedge.com about jumping on the Gold bandwagon.

http://www.zerohedge.com/news/egon-von-greyerz-too-late-jump-goldwagon




Enjoy

Silvermex Resources SLX.TO achieves positive cash flow

As per my change in strategy from early stage speculative stocks to early stage producing stocks Silvermex Resources reported their latest quarterly results. The full release can be found here.

The broad strokes are as follows:

Silvermex Resources Inc. ("Silvermex") (TSX: SLX) ) reported today its unaudited financial and operating results for the quarter ended June 30, 2011. The Company is currently ramping up production at its La Guitarra mine, as well as conducting extensive exploration within the district and at its other key projects.

Highlights from the quarter include:

• Positive cash flow from operations of $400,000 was achieved.
• Gross profits of $1.1 million were achieved on revenues of $2.8 million. Positive adjusted EBITDA of $80,000 on adjusted net loss of $500,000 was achieved.
• Net losses decreased by 27% over the second quarter of 2010.
• The La Guitarra mine produced 81,400 ounces of silver and 1,111 ounces of gold.
• Total cash costs of silver produced was US$4.45 per ounce, net of gold credits.
• Average realized silver price was US$39.03 per ounce and average realized gold price was US$1,502.64.

Financial Results

The Company achieved a gross profit of $1.1 million for the three months ended June 30, 2011, on sales of gold and silver of $2.8 million, compared with a gross loss of $600,000 for the comparative 2010 period on sales of gold and silver of $200,000.

The Company incurred a net loss of $1.2 million for the three months ended June 30, 2011 compared with net loss of $1.7 million for the same period in 2010. The improvement in net loss is mainly attributable to increased production of gold and silver as well as increases in grade recoveries over the same period in 2010. Production grades for the quarter averaged 174 g Ag/t and 2.4 g Au/t. Recoveries to concentrate for the quarter averaged 90% for silver and 88.5% for gold.

At June 30, 2011, the Company had working capital of $23.8 million, cash on hand and short term investments of $20.6 million and current assets of $28.3 million. Operating activities generated cash of $400,000, compared with cash used of $2.3 million for the same period in 2010.

Not bad for a $0.65/share stock.

Saint Augustine Gold SAU.TO King-King project gets bigger

Saint Augustine Gold has released some great news the last few days. On Friday the Company confirmed some historic drill results. This exercise has to be done to audit and confirm the previous drill results. This part and parcel for a feasibility study, a general exercise that all mining companies engage in prior to making a production decision. This is a copy of  Friday's news release with the confirmation of 99 meters of 1.03/grams per ton.

St. Augustine Gold and Copper Ltd. has intersected highly mineralized sample intervals in two recently completed drill holes (SAG01 and SAG02) with resulting assays that compare favourably with the gold and copper grades predicted by the block model from the mineral resource estimate disclosed in the National Instrument 43-101 October, 2010, technical report. These results are supported by a positive third party site visit audit report on the overall King-king project drilling and geology programs. Andy Russell, president and chief executive officer, states: "These intercepts confirm the high quality and integrity of the existing King-king data. The grades in SAG01 are extremely compelling with 99 metres of greater than one gram per tonne gold and 1.1 per cent copper."
King-king is a world-class copper and gold porphyry deposit with measured and indicated resources of 792 million tonnes grading 0.37 gram per tonne (g/t) gold, 0.28 per cent copper and 0.815 g/t gold quivalent (AuEq) (October, 2010, technical report for King-king). The King-king deposit is a porphyry copper-gold deposit hosted by hornblende-biotite-diorite-porphyritic rocks that intrude interbedded sediments, submarine volcanic rocks and volcanoclastic sediments. Copper and gold mineralization occurs at or near the apex of the composite diorite intrusive complex within the intrusive rocks and extending well into the surrounding wall rocks. The majority of the copper mineralization consists of chalcopyrite and bornite. Gold is relatively abundant in the oxide zone above the deposit's main sulphide zone, and also occurs in the sulphide zone in free form in close association with bornite and other sulphides.
Equivalent g/t gold (AuEq) levels are used in various places in this release to illustrate the combined effect of the two metals in this project, gold and copper. The following calculations were applied to calculate the AuEq in the oxide ore and the sulphide ore:

• AuEq (oxide) equals gold plus 1.399 times total copper.
• AuEq (sulphide) equals gold plus 1.668 times total copper.

These equations were derived from the parameters listed in the associated table that was taken directly from the October, 2010, technical report for the King-king project.
The current drill hole database consists of 276 holes representing 89,922 metres of drilling with an average drill hole spacing ranging from 94 metres to 125 metres. The lower extent of the deposit is often open, with numerous historic holes that terminated in ore grade mineralization. The potential for discovery of additional mineral resources in both the undrilled portion of the deposit as well as in outlying areas of the mineral property tenement is regarded as excellent.
The King-king drilling to support metallurgical, geotechnical and hydrogeological components of the King-king feasibility study is progressing well, with 80 per cent of the 15-hole program completed. The four metallurgical core holes have been completed to collect samples for additional metallurgical testing that St. Augustine anticipates will confirm current process designs developed based on samples from existing core tested in the first half of 2011. Five holes (80 per cent of plan) of the planned six have been completed for the open-pit geotechnical evaluation. Three of the planned five hydrogeological holes have been completed for the project's hydrogeological assessment.
Analytical results for SAG01 and SAG02, two of three holes completed to date that were designed for confirmation of the October, 2010, mineral resource estimate and to provide core for metallurgical testwork, have been received from Intertek Lab in Muntinlupa City, Philippines.
Drill hole SAG01 is an angle hole (azimuth -- 205 degrees; dip -- minus 66 degrees) drilled in the central-eastern portion of the copper-gold deposit. The grades for various intervals are illustrated in the associated table including those predicted by tracing the hole in the block model.

COPPER AND GOLD GRADES IN SAG01

Data source       From (m)    To (m)  Intercept   Au g/t      Cu %   AuEq g/t
                                            (m)

Drill core               0       600        600    0.299     0.368      0.868
Drill core             141       240         99     1.03      1.14       2.82
Drill core             159       216         57     1.42      1.31       3.45
Drill core             171       183         12     2.35      1.76       4.96
Block model              0       600        600    0.144     0.255      0.533
Block model            165       310        145    0.156     0.441      0.818
          

SAG0 2 is an angle hole (azimuth -- 184 degrees; dip -- minus 71 degrees) located in the central part of the deposit that laboratory results show also has significant thicknesses of AuEq mineralization. The grades for various intervals are illustrated in the associated table including those predicted by tracing the hole in the block model.

COPPER AND GOLD GRADES IN SAG02

Data source        From (m)    To (m)   Intercept   Au g/t      Cu %    AuEq g/t
                                              (m)

Drill core                0       455         455    0.129     0.197       0.443
Drill core               45       195         150    0.166     0.295       0.624
Drill core               45        84          39    0.142     0.476       0.808
Drill core              111       156          45    0.182     0.317       0.711
Block model               0       455         455    0.145     0.280       0.597
Block model             148       211          63    0.107     0.463       0.878

The associated table summarizes the assays from drill holes SAG01 and SAG02 by material type.

SUMMARY ASSAY INFORMATION FOR SAG01 AND SAG02 TO TD

Hole ID                      Mineralized intercept                   
                     From (m)   To (m)  Length (m)   Cu (%)   Au (ppm)   AuEq (ppm)
SAG01
Oxide                       0      162         162     0.44      0.293        0.919
Ox-sulph mix              162      180          18     1.54      1.745        3.909
Sulphide                  180      651         471     0.27      0.235        0.685
SAG02
Oxide                       0       27          27     0.05      0.072        0.141
Ox-sulph mix               27       87          60     0.39      0.117        0.667
Sulphide                   87      456         369     0.18      0.136        0.444

Added to this news release is Saint Augustine Gold indicating that the total resource of gold and copper has grown by 21.6% today.

ST. AUGUSTINE GOLD AND COPPER LIMITED ANNOUNCES 21.6% INCREASE IN KING-KING PROJECT TOTAL RESOURCE CONTAINING 5.4 BILLION LBS COPPER AND 10.3 MILLION OZ GOLD
St. Augustine Gold and Copper Ltd. has an updated block model for its King-king project in Mindanao, Philippines, with new physical and economic parameters based on updated information from continuing engineering and mineral resource studies executed in 2011. The resource has increased 21.6 per cent in tonnage and shows 0.254 per cent copper, 0.334 gram per tonne gold and 0.660 equivalent gram per tonne gold or 0.533 per cent equivalent copper (equating to 20.4 million equivalent troy ounces of gold contained or 11.3 billion equivalent pounds of copper contained).
In comparing with the mineral resource reports from the October, 2010, technical report and the updated resource today, the measured and indicated mineral resource increased from 791.5 million tonnes to 962.3 million tonnes at 0.533 per cent copper equivalent, or .660 g/t gold equivalent, 0.254 per cent total copper, 0.062 per cent soluble copper, and 0.334 g/t gold (see the table). The inferred mineral resource totals an additional 188.8 million tonnes at 0.439 per cent copper equivalent, 0.215 per cent total copper, 0.048 per cent soluble copper and 0.265 g/t gold. The measured and indicated mineral resource represents 5.4 billion pounds of contained copper and 10.3 million troy ounces of contained gold. The last column of the table also demonstrates that with metal grades defined in terms of equivalent gold instead of equivalent copper, the equivalent gold grade of the measured and indicated mineral resource is 0.660 g/t gold equivalent.
Related to the measured and indicated resource reported in the October, 2010, technical report, the updated mineral resource contains significantly more tonnes and more contained copper and gold. Total material above cut-off has increased by 170.7 tonnes, which is an increase of 21.6 per cent. Contained copper has increased by 520 million pounds, which is an increase of 10.6 per cent. Contained gold has increased by 900,000 ounces, which is an increase of 9.4 per cent.

KING-KING MINERAL RESOURCE                          

                                Ore    EqCu Tot. Cu Sol. Cu    Gold    EqAu
                                 Kt     (%)     (%)     (%)   (g/t)   (g/t)
Measured 
Oxide mill ore               39,513   1.180   0.431   0.266   0.535   0.843
Sulphide mill ore            80,829   0.551   0.258   0.037   0.427   0.803
Total measured resource     120,342   0.758   0.315   0.112   0.462   0.816
Indicated 
Oxide mill ore              122,350   0.868   0.334   0.203   0.382   0.620
Sulphide mill ore           719,560   0.439   0.230   0.029   0.305   0.640
Total indicated resource    841,910   0.501   0.245   0.054   0.316   0.637
Measured/indicated 
Oxide mill ore              161,863   0.944   0.358   0.218   0.419   0.675
Sulphide mill ore           800,389   0.450   0.233   0.030   0.317   0.657
Total meas./ind. resource   962,252   0.533   0.254   0.062   0.334   0.660
Inferred 
Oxide mill ore               33,303   0.747   0.276   0.160   0.337   0.534
Sulphide mill ore           155,513   0.373   0.202   0.024   0.249   0.544
Total inferred resource     188,816   0.439   0.215   0.048   0.265   0.542

Notes:
EqCu (oxide) equals total copper plus 1.400 times gold, cut-off equals 
0.30 per cent EqCu.
EqCu (sulphide) equals total copper plus 0.686 times gold, cut-off equals
0.15 per cent EqCu.
Alternatively, as equivalent gold:
EqAu (oxide) equals gold plus 0.714 times total copper, cut-off equals 0.22 
g/t EqAu.
EqAu (sulphide) equals gold plus 1.458 times total copper, cut-off equals 
0.22 g/t EqAu.
Total material in cone shell -- 1,736,371 thousand tonnes.
Waste:ore ratio -- 0.80 (inferred as waste).
Waste:ore ratio -- 0.51 (inferred as ore).

Updated estimates of gold and copper prices, mining, process, and overhead costs from 2011 engineering studies were applied along with updated estimates of process and mining recoveries to establish a revised estimate of mineral resources that have reasonable expectation of economic extraction. The table summarizes the mineral resources at the King-king copper/gold project as determined by Independent Mining Consultants Inc. of Tucson (IMC). The updated mineral resources are based on commodity prices of $2.50 (U.S.) per pound copper and $1,100 (U.S.) per ounce gold.
With these increases in mineral resources, the company is evaluating raising the planned tonnage throughput for the coming bankable feasibility study (BFS) that is planned for completion in second-quarter 2012. The throughput is expected to increase from the 100,000-tonne-per-day mine plan in the October, 2010, technical report to somewhere in the range of 110,000 tonnes per day to 130,000 tonnes per day. The evaluation will focus on economic feasibility to ensure maximum after-tax net present value and internal rate of return. The increase in throughput would demonstrate during the first five years of production an estimated annual production of 193 million pounds per year copper in concentrate and 529,000 ounces of gold per year in copper concentrate.
Independent Mining Consultants of Tucson, Ariz., the consultant for the feasibility mine design, updated the resource block model for this mineral resource update. The main features of this update are the incorporation of better topography into the estimate than was previously available and the conversion of the model and drill hole database from the old local co-ordinate system to WSG84 co-ordinates. Most of the increased mineral resource is due to higher prevailing metal prices.
IMC reports mineral resources within a floating cone shell for open pit mines to comply with the "reasonable prospects for economic extraction" clause of Canada's NI 43-101 regulations and also Australia's AusIMM-JORC code. The table shows the economic parameters used for this update. Only measured and indicated resource blocks were allowed to contribute to the floating cone shell used for the mineral resource tabulation, with inferred blocks treated as waste. The economic parameters developed for the table are based on bulk open pit mining of the ore followed by crushing, grinding and flotation to produce copper concentrates.

ECONOMIC PARAMETERS FOR KING-KING

Parameter                                  Units  Oxide mill Sulphide mill

Copper price per pound                  (U.S. $)       2.500         2.500
Gold price per troy ounce               (U.S. $)        1100          1100
Base mining cost per tonne material     (U.S. $)       1.250         1.250
Mine replacement capital per tonne      (U.S. $)       0.100         0.100
Process cost per ore tonne              (U.S. $)       5.000         5.000
G and A cost per ore tonne              (U.S. $)       0.270         0.270
Process recovery of copper (average)         (%)        37.8          77.2
Process recovery of gold (average)           (%)        75.0          75.0
Smelting/refining payable for copper         (%)        96.4          96.4
Smelting/refining payable for gold           (%)        95.0          95.0
SRF (or SXEW) cost per pound copper     (U.S. $)       0.260         0.260
Gross royalty                                (%)         3.0           3.0
NSR factor for total copper             (U.S. $)      17.455        35.649
NSR factor for gold                     (U.S. $)      24.443        24.443
Gold factor for copper equivalent         (none)       1.400         0.686
Total copper equivalent cut-off grades
Breakeven (without lift)                  (% Cu)        0.38          0.19
Internal                                  (% Cu)        0.30          0.15
Copper factor for gold equivalent         (none)       0.714         1.458
Gold equivalent cut-off grades
Break-even (without lift)                  (g/t)        0.27          0.27
Internal                                   (g/t)        0.22          0.22

St. Augustine key project milestones to be completed during the next 12 months:

• Social and environmental impact assessment and environmental impact study;
• Application for declaration of mine project feasibility;
• Application for environmental compliance certificate;
• Feasibility study, second-quarter 2012.

The PEA schedule has been adjusted by one quarter to take advantage of the new optimized mine plan to increase mine and mill throughputs to between 110,000 and 130,000 tonnes per day ore. The new completion date for the PEA is fourth-quarter 2011.

Now this is all fine and dandy but most of today's shareholders are wondering why the market for Saint Augustine still trades at $0.65/share with all this good news?

Part of it has to do with the cycle of junior stocks from shell to speculation to resource definition to pre-feasibility to bankable feasibility to production. Illustrated below is a generic graph I made up on Excel to plot the cycle of a mining company. Don't mind the dates I made them up.

Here is a graph of Ratel Gold as it transitioned into Saint Augustine Gold. Trying to put this graph together on a PC required a real cut and past job, anyway it should be suffice to illustrate where we are today. Added to the breakdown is share price is the general malaise of the markets in general.

Going forward I would expect the price to firm up as the Company makes the balance of the financial milestone to secure their interest in the King-King project. The next level of investors to get involved will be the institutions. At this point all of the speculators are pretty much in the exit aisles.

Rare Earth Deals, Hudson Resources HUD.V or Canada Rare Earth CJC.V

Last week I sold 5000 share of my Canada Rare Earth CJC.V at $0.52/share a  position that I had bought earlier at $0.48/share for 10000 shares. It put a few hundred dollars into my account but it also let off load a more speculative rare earth play for one that is developing a resource. Today I bought 3500 shares of Jamie Tuer's Hudson Resources HUD.V at $0.76/share.  

As I posted last week I am inclined to move my money from the speculative resource plays into deals that are in production, near production or that have defined a resource and money in the bank.

Canada Rare Earth CJC.V is an area play to Geomega's GMA.V Montviel rare earth play. Canada Rare Earth is yet to get the drill rigs going but I saved myself 5000 for when they do. The balance of my Canada Rare Earth is being held for purely speculative reason to see how their first drill hole turns out. Canada Rare Earth will be sold on news.

In the mean time Hudson Resources HUD.V a much more advanced rare earth play went on sale with last weeks volatility. Hudson Resources has to date defined a resource of 14 million tonnes of 1.51% Total Rare Earth Oxides (TREO) on their flagship Sarfartoq property.

The market seems to think the Sarfartoq property has the goods going forward as James Tuer was able to load up the treasury with a placement at $0.95/share for $17 million in April.

The graph shows that there is support in the low $0.70/share range with near term resistance up around the $1.05-$1.10/share range. In the recent sell off Hudson gaped down to the high $0.60/share range. Hudson's stock could push through the near term resistance depending on the grade/length of latest drilling results.

Hudson's summer drill program consists of 10,000 metres started in May and I would expect drill results to start hitting the news wire in the coming weeks.

Teslin River Resources from shell company to vending in an asset..

Teslin River Resources is a good example of how the process works on the Venture Exchange from taking a shell company through the initial seed financing's to finding a worthy asset. This process can take years to reach fruition.

Start with today's news release, which tops a string of news releases in the past two weeks that indicate Teslin is ready to wake up out of a long slumber.

Teslin River Resources Corp. (TLR:TSX-V) (“Teslin” or the “Company”) is pleased to announce that further to its press release dated January 10, 2011, it has completed the acquisition (the “Acquisition”) of Queensgate Resources Corporation (“Queensgate”). Queensgate is a private company registered in Quebec. Through its 100 percent owned subsidiary in Nevada, Queensgate owns 100% of the Mustang Property and the Morning Star Property in the Walker Lane mineral trend in Nevada.

Teslin River provides a prime example of how the cheap shell companies come about on the Venture Exchange. I have had a long history with this company and will explain how the process works.

Teslin River was a typical shell owned by various groups over the past 6-7 years, when I got involved it was known as Wind River Resources and I had participated in a private placement at $0.055/share. Wind River back then was waiting for a project when it was sold to another group (Damien Reynolds/Longview). I managed to sell my stock at around $0.23/share but my warrants went un-exercised.

The next group led by Longview further financed Wind River Resources at $0.35/share to fund an Uranium project in Mongolia. Bad luck would have it that Mongolia changed their mining laws and the acquisition fell apart. At this stage Longview was also in financial trouble that would force Damien Reynolds to resign and Longview to fold. This caused Wind River to go back to dormancy as a public company.

In early 2008 Wind River Resources saw the Company's share structure consolidated into a 5-1 roll back subsequently wiping out all the previous shareholders and a name change to Teslin River Resources.

Teslin managed to do a small placement of 1,400,000 shares at $0.07/share back in September 2009 to keep the minimum cash on board to run the Company. Subsequent to this small raise of funds came yet another change in management installing the present John Icke as President on October 2009.

Over the next few months Teslin makes some small property agreements that did nothing to generate any interest in the market for Teslin's shares

Another attempt to refurbish the coffers, Teslin, in June 28 2010 announced a $1,100,000 financing at $0.05/share but by September 2nd only closes a total of $293,000 of this placement. Obviously the market interest just was not there. But there is enough cash on had for the day to day running of a public company.

Still looking for a deal to unlock all the cheap paper issued since 2009, Teslin farmed out some of their property projects to other public companies with cash in hand. Teslin itself had to find a transaction of significance, hence the Queensgate Resource acquisition.

This time around financing was a bit more receptive for Teslin as Resinco Partners (really a John Icke Company) raised $653,000 at $0.10/share giving Resinco a 47.33% fully diluted interest in Teslin.

So here we are today August 11, 2011, the Venture Exchange approved the Queensgate Resources acquisition, the Company has some cash and Resinco partners owns 47% of the shares at an adjusted cost base of around $0.09/share. The bid/ask for Teslin is $0.07-$0.09/share.

When Teslin River Resources will start its' move to higher share prices is the great unknown. (My bet would be when the 4 month hold period comes off the latest private placement.). I am long 30,000 shares at $0.095/share pretty much at the same price as the insiders. At present Teslin lacks liquidity and the market going forward is most likely risk adverse.  I confidant though that management will want to move Teslin into the high teens somewhere in the future. Maybe the Queensgate Resources story will be enough to take us there?

St. Augustine Gold SAU.TO cleans up some details

A small and unassuming news release from Saint Augustine Gold but important as this project moves along the development pipeline. The broad strokes of the release is working out the details on who spends what to earn their interest in the King-King project. 

With $60,000,000 still to invest in the King-King  project Saint Augustine will have to tap the markets for more money. Lucky for them Gold is reaching new highs and going higher, so I believe the cash will be found.

St. Augustine Gold and Copper Limited (TSX:SAU) is pleased to announce that it has agreed and executed with Nationwide Development Corp. (Nadecor) an Interim Funding Agreement (IFA) for St. Augustine's additional investment in the King-king gold and copper project (King-king Project) located in Pantukan, Compostela Valley, Philippines. The additional investment covered by the IFA is investment over and above the USD 30 million in project expenditures covered by the Preferred Share Investment Phase of the overall earn-in agreement but prior to the Joint Venture Phase. St. Augustine expects that it will invest an estimated additional USD 60 million, part of it under the IFA, to complete its full earn-in interest by Q2 2012 when the bankable feasibility study is forecast to be completed. Upon completion of earn-in, both parties will fund, on a retained interest basis, all future cash calls needed for the joint venture with respect to the remaining King-king Project development costs. The IFA confirms that all expenditures and investments made by St. Augustine for the King-king Project during the Interim Funding Phase (as established under the IFA) will be treated as earn-in and provides flexibility for both parties to optimise usage of funds. Such earn-in will eventually translate into an interest in a joint venture entity which is intended by both parties to be the holder of the Mineral Production Sharing Agreement (MPSA) for the King-king Project. Nadecor further confirms under the IFA to comply with the various agreements it has in place with St. Augustine and commits to an agreed timetable of key steps for the completion of the set-up of the above joint venture entity. As assurance for such commitment, Nadecor has given St. Augustine an option over a substantial portion of production from the King-king Project at a material discount to relevant market prices. The option covers a period of 3 years from the King-King Project reaching commercial production and is adjusted for certain circumstances. It is intended that the assurance arrangement (and as abovementioned the IFA) will expire upon the completion of the earn-in with St. Augustine then having a direct interest in the joint venture entity. The completion of the earn-in is currently planned at Q2 2012.

Stoneshield Capital STS.V Completes balance of placement

Good news for Stoneshield Capital STS.V in completing the balance of the $0.175/share financing. The Company raised $1.1 million, $100,000 over the announced $1,000,000 originally announced.

 Hopefully this money is well spent as the financing well going forward are starting to look a little dry.

Stoneshield Capital Corp. has received approval for and closed the second and final tranche of the non-brokered private placement referenced in the company's news release dated July 29, 2011.
The second tranche consisted of 2,416,323 units sold for gross proceeds of $422,856.56.

Out of Shield Gold SHG.V and into Silvermex Resources SLX.TO

While I was away on vacation last week Shield Gold had it's once a year pop above $0.10/share. I have owned Shield Gold since the IPO at $0.10/share years ago. I wanted to sell this one at $0.13/share and managed to when I was away with an open order.

 

I picked up small silver producer Silvermex Resources SLX.TO, that has just entered into silver production in Mexico. Management from Silvermex appears to be from Hecla Mining HL.NYSE and Silver Standard SSO.TO. My entry price is $0.59/share which is just off the lows on the chart and just 2 cents above the 49,000,000 warrants that are exercisable at $0.57/share.

I missed the great run on First Majestic Silver FR.TO from $3.00/share to over $20.00/share so I have been looking for another early silver producer that can generate that kind of return. The chart on Silvermex shows some great swings in price movement that can be traded.  Judging by the overhang in warrants, the upside seems to be capped in around $0.85/share with the possibility of repurchase in around $0.60/share with the exercise and selling of the warrants.

Of course the trading price of Silvermex will be greatly governed by the spot price of silver. It seems that all major silver producers tend to trade in line with the price of spot silver.

This is the first shift in focus in from junior shell upstarts to companies with real assets that are trading at reasonable levels.

With change in the markets one must change trading strategies.

I have decided to change the trading strategies going forward and stay away from the ultra cheap penny shells that awaiting major transactions.

I think it will be harder for some of these shell companies to fund their projects going forward. Capital is going to harder to come by and will only flow to the deals that have proven some measurable resource that will continue to attract market attention.

Stocks that I will be exiting on news releases include Teslin River Resources TLR.V at $0.15/share, Paget Minerals PGS.V at $0.30/share, Stoneshield Capital STS.V at $0.30/share, Cap-Ex Resources CEV.V at $0.75/share, Ratel Group RTG.TO somewhere north of $0.40/share and Hilltown Resources HLT. CDNX at $0.20/share.

My intent is to be looking towards oil and gas deals including buying more Americas Petrogas BOE.V, Gold and Silver producers including First Majestic Silver FR.TO and Silvermex Resources SLX.TO. I also like iShares gold ETF XGD.TO and Sprott physical gold PHY-U.TO.

I will look to exit half my trade in Canada Rare Earth CJC.V when the Company starts drilling and the other half when the results are released. These funds will probably allocated towards Hudson Resources HUD.V.  

Americas Petrogas BOE.V continues to grow by the drill bit

A small announcement today by Americas Petrogas that  contiues the slow but steady growth by drill bit philosophy. I would assume these wells will be similar to to the Medanito Sur wells that ranged from 90 BOPD to the Ms.s-1 well that flowed at over 634 BOPD.

Americas Petrogas Inc. has spudded the first of three exploration wells on the Rinconada Norte block. These wells will target conventional hydrocarbons in the Precuyo, which is the key producing formation in Medanito Sur, as well as other shallower targets. API is operator on the block and has a 65-per-cent working interest with partner Gran Tierra (35 per cent).
The block is located immediately south of and adjoins Medanito Sur in La Pampa province in the eastern region of the Neuquen basin of Argentina. The planned well locations are on trend with current producing wells in Medanito Sur and adjacent blocks and will test similar formations at similar depths.

Americas Petrogas BOE.V update

As an investor in Americas Petrogas (API) one has to read between the lines in their latest news releases to see the potential of this Company going forward.

Lets start with the April 13 news release where API released the news that they had spudded the Hua.x-1 well targeting the Vaca Muerta shale formation. API expected reach total depth within 60 days.
To recap here is the news release.

Americas Petrogas Inc. ("Americas Petrogas" or the "Company") (TSXV:BOE) announces the initiation of drilling of the first deep shale gas well on the Huacalera block in the Neuquen Basin of Argentina. Drilling operations are being conducted by Apache Argentina, the Company's partner and the operator in the the Huacalera block.

The well Hua.x-1 has the primary objective to test the Late Jurassic Vaca Muerta shale formation, a thick, rich source rock that offers the potential for unconventional shale gas. The well is programmed for total depth of 4,200 meters (approximately 13,800 feet) within approximately 60 days. The well will also test stacked shallow Lower Cretaceous formations including the Mulichinco and Quintuco formations, which have seen previous gas discoveries in the block by previous operators, as well as the deeper Jurassic Tordillo formation. This vertical well is expected to provide a significant quantity and quality of information necessary to determine the key characteristics of the Vaca Muerta shale and other potential reservoirs. During the drilling process, a comprehensive formation evaluation program will be conducted to fully characterize the reservoir potential at this location. This information is vital for evaluating subsequent prospects for drilling.

In nearby areas, both the Mulichinco and Tordillo are significant hydrocarbon producing zones from conventional reservoirs. The Petrobras operated Sierra Chata Block (Cumulative production to March, 2010 is 475 BCF and 1.394 MMBO) and Total's Aguada Pichana Block (Cumulative Production March 2010: 1.587 TCF and 4.326 MMBO) are situated east and north of Huacalera, respectively.

The Huacalera block covers 249,943 acres (equivalent to 390 sections or almost 11 Townships, or 1,011 square kilometers) and is located in the western region of Argentina's Neuquen Basin.

Commenting on this event, Mr. Barclay Hambrook, President and CEO, stated, "We are very excited about the prospects for the drilling of our first deep shale gas well into the Vaca Muerta formation, particularly at this location which is favorably situated in a prospective environment for shale, as are our 9 western Neuquen blocks. Additionally, we have multiple prospective conventional and tight gas horizons in the Mulichinco, Quintuco and Tordillo formations."

The next little tidbit that has indicated that API and Apache have found something substantial is the doubling of API's interest in the Huacalera block by acquiring all the shares of Energicon S.A. for $5 million before the Apache reaches total depth on the Hua.x-1 well.

This is the news release from June 3, 2011

Americas Petrogas Inc. ("Americas Petrogas" or the "Company") (TSXV: BOE) announces that it is planning a multi-well drilling program on its various properties located in the Neuquen Basin in Argentina. As a result of the Company's recently completed private placement financings, the Company is well funded and plans to drill for conventional oil and gas as well as tight sands gas, shale oil and shale gas.

During the 2011-2012 drilling campaign, the Company plans to drill a total of approximately 25 wells on both its Eastern blocks, which target conventional oil and gas, and its Western blocks, which target primarily tight sands gas, shale oil and shale gas along with conventional oil and gas.

The drilling plan is expected to include a combination of exploration and development wells. Of the wells planned, approximately 15 wells are expected to be drilled on Medanito Sur. Accordingly, the exact number of wells actually drilled will depend largely on the timing of receiving the exploitation concession from the province of La Pampa for Medanito Sur along with other required government approvals/permits.

Speaking about the Company's Argentina drilling plans, Mr. Barclay Hambrook, President and CEO, said "We are very excited to engage in this expanded exploration and development program on our sizeable land positions in the Neuquen Basin. Our 9 Western blocks in the shale corridor look to be nicely spread over the dry gas window, the wet gas (condensate) window and the oil window."

Acquisition of Private Company

Americas Petrogas further announces that it has entered into a share purchase and sale agreement to acquire all of the issued and outstanding shares of Energicon S.A. (" Energicon"), a private Argentine company that holds a 19.5% participating interest in the Huacalera block along with other assets. The Company has agreed to pay US$200,000 in cash and issue 2,000,000 common shares priced at $2.44 per common share to acquire the shares of Energicon. Closing of the transaction is subject to receipt of all necessary regulatory approvals and is scheduled for June 2011, following the completion of due diligence.

As previously reported by the Company, the Huacalera block is an exploration block located in the western region of the Neuquén Basin. Americas Petrogas currently holds an existing 19.5% interest in the block. Drilling of the first deep shale gas well (the " Hua.x-1 well") on this block commenced in April 2011. The well is currently at approximately 3,100 meters (10,200 feet) in depth and is scheduled to be drilled to a total depth of approximately 4,200 meters (13,800 feet). As previously announced, the Company is being fully carried by the operator on the drilling of the Hua.x-1 well. The carry also applies to the 19.5% participating interest held by Energicon. The operator has also agreed, at its own cost, to perform a 3D seismic program over a 100 sq km area of the block, if results of drilling are successful.

Commenting on the acquisition of Energicon S.A, Barclay Hambrook, President and CEO of Americas Petrogas stated, "We are excited about the opportunity to increase Americas Petrogas' ownership position in the Huacalera block given its location in the Western Neuquen shale corridor."

The fact that Americas Petrogas was prepared to buck up $5 million to double their interest in a wildcat well that is operated by Apache before the well reaches total depth tells me that the management knows what is down hole.

Fast forward to this week, although Americas Petrogas did not announce a major discovery, nor did the Company announce a plug and abandon either on the Hua.x-1 well.

In fact Americas Petrogas released this week that they have cased the Hua.x-1 well to a total depth of 13,450'. The Company targeted  Vara Muerta Shale formation had an approximate gross thickness of 1,742 feet of thickness.

In my experience 1,742 feet thickness of any hydrocarbon bearing zone is unprecedented. Although Americas Petrogas has yet to announce  this as a major discovery (they need to test the well still). I think this is a once in a life time discovery for a Company trading at $1.80/share. 1,782 feet of over pressured hydrocarbon zone is massive!  

To date Americas Petrogas has played their cards conservatively, under promising and over delivering and once again the Company has understated this discovery.

Americas Petrogas (TSX-V:BOE) ("Americas Petrogas" or the "Company") is pleased to announce that the Hua.x-1 well on the Company's Huacalera Block, operated by the Company's joint venture partner, Apache Argentina, has reached total depth (TD) of 4100 metres (13,450 feet). A full suite of logs, including image logs, has been run and production casing has been successfully set all the way to TD.

The primary target Vaca Muerta Shale Formation (531 metres or 1,742 feet approximate gross thickness) has initial indications of overpressure. Gas shows were encountered in the Mulichinco Formation (140 metres or 459 feet approximate gross thickness), the Quintuco formation (414 metres or 1,358 feet approximate gross thickness) through the Vaca Muerta Formation and into the Tordillo Formation, and these results were reported to the appropriate government authorities.

The comprehensive suite of logs and mud log information will now be integrated and interpreted. The vertical cores, sidewall cores and rock cuttings have been sent to 3 different laboratories for analysis to measure the petrophysical and geochemical characteristics of the samples, both shales and sands. The results, which are expected during Q3-2011, will provide fracing and testing options for tight sands and shale gas or oil reservoirs.

This is the first Vaca Muerta Shale gas pilot exploration well drilled in the 250,000 acre (390 sections) Huacalera block which lies along the emerging shale gas and shale oil play corridor in the western part of the Neuquen Basin, Argentina. As previously stated, Americas Petrogas has a 39% Working Interest in this large block and is carried 100% on the Hua.x-1 well by Apache.

Commenting on the drilling of this well, Mr. Barclay Hambrook, President and CEO, stated, "We are very pleased that the well has been drilled and cased successfully and, with Apache, we are looking forward to the results of fracing, testing and further exploration on this very large and promising block. Huacalera occupies a strategic location almost midway between our 5 northern blocks and 3 large southern blocks along the emerging shale play corridor."

To learn more about drilling and fracing in the Vaca Muerta shale, please see the new videos on the home page of our website www.americaspetrogas.com


About Americas Petrogas Inc.

Americas Petrogas Inc. is a Canadian company whose shares trade on the TSX Venture Exchange under the symbol "BOE". Americas Petrogas has oil and gas interests in numerous blocks involving exploration, development and production. Americas Petrogas has proven conventional oil and gas reserves, as well as evolving unconventional resource plays including shale gas, shale oil, and tight sand oil and gas in Argentina's prolific Neuquen basin. For more information about Americas Petrogas, please visit www.americaspetrogas.com

About Vaca Muerta Shales

The Vaca Muerta Shale is one of two principal source rocks in the Neuquen Basin of Argentina. The shale is late Jurassic-early Cretaceous in age, covers an area of approximately 8500 square miles, varies in depth between 5,500 to 14,000 feet and in places is up to 2,000 feet in thickness.

The Vaca Muerta characteristics are believed to be similar to shale reservoirs such as the Eagle Ford, Haynesville and Horn River in North America which have so far resulted in discoveries of both shale gas and shale oil. The shale has recently become the focus for many of the important shale gas players in North America, including Apache, Exxon Mobil, Total as well as YPF in Argentina.

In my experience in investing, Americas Petrogas presents an unique growth opportunity in a very promising world class oil and gas development play in an lesser known, underdeveloped oil basin known as the Neuquen basin.

The Company also has a world class potash play in  GrowMax Agri Corp. which has been legitimized by a 20% strategic interest by IFFCO (Indian Farmers Fertilizer Co-operative Limited).

One big reason that Americas Petrogas is still missed by most market players  is the fact that API still trades on the Venture Exchange. When Americas Petrogas decides to list on the Toronto Stock Exchange it will open the door to a whole new class of investors and in my opinion a substantialy higher share price. Until then let the management keep growing by the drill bit and trading on the Venture Exchange because I am still buying. 

One more hidden indication of a discovery made by Apache and Americas Petrogas is this video and this video uploaded by Americas Petrogas before the news of August 3rd 2011.

P.S. Short term downdrafts will be the current market sell off and any softening of spot oil and gas prices in the near term.