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Century has revised its March Corporate Presentation providing detailed forecasts for San Juan in addition to Lamaque. You can view it from the link on the right.
With regards to the gold price, this was my thought process from a couple of weeks ago:
"Gold is in a good place right now, and going forward. If fear continues to overwhelm then gold will act as protection (who knows, there could be a phase 2 of massive deleveraging (selling), somewhat similar to October, but gold will be alright again once it stabilizes, if a phase 2 selling happens to occur).
Unfortunately, the phase 2 selling did materialize. Similar to October, Gold has been the only positive investment recently. The Dow, S&P and other exchanges have taken a bloodbath, especially over the past couple of weeks. As a result, a phase 2 (forced) deleveraging selling was required. Investors having to sell their profitable gold investments to cover off general equity losses.
I've also heard that there were some heavy margin calls in late February and early March, which naturally would make the situation worst.
Also making the situation worst is the fact that gold didn't stick over $1,000 US. People are increasingly more discouraged, especially with this being the second time it has been pushed back dramatically from the key $1,000 US mark.
Also, with gold no longer being the flavour of the month, we likely have some momentum sellers.
I am not big on extreme manipulation theories, but I do believe that there are deep pocketed people (large investors/large investment institutions holding mainstream equities/banks/central banks/government divisions,....) that are selling down the gold price during weaker periods. I don't think it's a co-ordinated effort or anything like that. I just think it's pockets of people with selfish agendas, which they know they can get away with. I don't think it's much different from when they suppress share prices of companies. I just think the regulators do a very poor job in preventing all this stuff, be it against companies or the gold price.
It's just frustrating to watch the gold price be so steady in the overnight (Australian, Asian, European) markets then take an immediate $30 kill as soon as the US markets open up. The price sometimes is built back up during the next overnight period, but then the beatdown gets repeated the next morning. This exact pattern has gone on the last 7 days (and counting).
Anyway, I don't think this phase 2 deleveraging selloff of gold will be nearly as bad as the one in October. However, unfortunately, there are a lot of momentum people out there that are into charts, and stuff like that, and don't care much for fundamentals. If enough people look at something then that something will become reality, regardless of lack of substance. For instance, these so-called gold price support levels - all of these momentum players are looking at them. All it takes is one of the deep pocketed agenda driven groups to come along and beatdown the price and there goes another $30 to $50 - the chart watchers will easily follow this momentum. That is why it is important for bargin hunters to step in at this $905 - $915 price range. The market open tomorrow will be very important. If there is not enough support then the people with agendas will easily knock the price below $900, with increased selling pressure. On the flipside, the general markets were a bit calmer today. Hopefully that means less pressure from deleveraging gold sales.
Whatever happens, it's all going to be short-term anyway, just like the first phase in October. The fundamentals are too strong to keep gold down on a longer term basis.
Hopefully, our potential gold-based financing investors understand all of this.
Thanks for the heads up Carib. This new presentation is even newer than the one posted last Thursday. That was quite surprising to me.
Actually, IMO, this new presentation is one of the best they have ever done. I have always left that their previous Corporate Presentations were lacking, but this one was very well done - they just have to remember to finally remove Colina Dorada from that one Peru map (unless they received an after the fact extention on the option, that we are not aware of).
Overall, they did a real nice job selling the assets of the company on this presentation. Once they get time, they should also do a major update to the website - it adds little value right now. Good start with the presentation though. Not everything is going to improve overnight, but it's important for them to demonstrate solid progress.
By the way, I felt the tone of the presentation was one of confidence with regards to gaining financing and the restart of Lamaque in the near-future. Also, on page 7 they show financing for Lamaque as being perhaps about 90% on the way to the finish line. Of course, even if it was 99%, it still wouldn't mean it couldn't fall apart. Let's hope we are more fortunate this time. Let's hope they can finalize it either this week or next week.
If we can close off the financing real soon, you know, 58,000 ounces (Lamaque and SJ combined) this year is not bad, especially with this gold price environment. And, certainly, around 82,000 in next year and around 128,000 in 2011 (140,000 once full production is reached), should be very fruitful.
Once we get funding, at some point along the way many of those 1.1M M&I ounces will likely be converted to reserves. The question will then be about how the company will treat the extra Lamaque reserves. Will they extend the mine life from 11 years to 20 years or will they increase overall company production (SJ and Lamq combined) from 140,000 to 200,000, with perhaps a 15 yr mine life at Lamaque?
On page 16, there is a mine to the right of our San Juan property. I didn't realize another mine was located so close. It's called Cerro Rico. Century should take a quick glance to see if there are any signs of mineralization coming across onto our property.
I'm glad they mentioned the Yellowknife Northbelt properties. With availability of cash, I think it has good mid-term potential to expand the resource base (perhaps to where we can consider mine potential). Here is what I know:
An exploration company called Nebex Resources performed drilling on the property in mid to late 90s, during a low gold price period. They actually had solid success, at least relative to today’s gold prices. They performed a resource calculation (based on the drill results) that came to about 123,000 ounces of gold (1M tonnes @ 4 g/t). Nebex called it reserves. Actually, on a previous conference call Peggy mentioned that the resource total is 250,000 ounces at Northbelt. It’s possible that the difference between the current total of 250,000 resource ounces and Nebex’s 123,000 reserve ounces represent inferred ounces (vs the 123K that Nebex called reserves), or at least some sort of estimated ounces based on noticeable extensions of the veins – the zone remains open along strike and at depth.
Of course, these ounces were calculated pre-43101, but nevertheless they were based on solid drill results, which are transferable for 43-101 calculations.
If all goes well over time, Northbelt could eventually turn into an organic mine for us (not immediately but over time, if all goes well). It's located in a well established mining district. Also, Northbelt's mineralizations are northern extentions of a past producer - Con Mine.
2 comments:
With regards to the gold price, this was my thought process from a couple of weeks ago:
"Gold is in a good place right now, and going forward. If fear continues to overwhelm then gold will act as protection (who knows, there could be a phase 2 of massive deleveraging (selling), somewhat similar to October, but gold will be alright again once it stabilizes, if a phase 2 selling happens to occur).
Unfortunately, the phase 2 selling did materialize. Similar to October, Gold has been the only positive investment recently. The Dow, S&P and other exchanges have taken a bloodbath, especially over the past couple of weeks. As a result, a phase 2 (forced) deleveraging selling was required. Investors having to sell their profitable gold investments to cover off general equity losses.
I've also heard that there were some heavy margin calls in late February and early March, which naturally would make the situation worst.
Also making the situation worst is the fact that gold didn't stick over $1,000 US. People are increasingly more discouraged, especially with this being the second time it has been pushed back dramatically from the key $1,000 US mark.
Also, with gold no longer being the flavour of the month, we likely have some momentum sellers.
I am not big on extreme manipulation theories, but I do believe that there are deep pocketed people (large investors/large investment institutions holding mainstream equities/banks/central banks/government divisions,....) that are selling down the gold price during weaker periods. I don't think it's a co-ordinated effort or anything like that. I just think it's pockets of people with selfish agendas, which they know they can get away with. I don't think it's much different from when they suppress share prices of companies. I just think the regulators do a very poor job in preventing all this stuff, be it against companies or the gold price.
It's just frustrating to watch the gold price be so steady in the overnight (Australian, Asian, European) markets then take an immediate $30 kill as soon as the US markets open up. The price sometimes is built back up during the next overnight period, but then the beatdown gets repeated the next morning. This exact pattern has gone on the last 7 days (and counting).
Anyway, I don't think this phase 2 deleveraging selloff of gold will be nearly as bad as the one in October. However, unfortunately, there are a lot of momentum people out there that are into charts, and stuff like that, and don't care much for fundamentals. If enough people look at something then that something will become reality, regardless of lack of substance. For instance, these so-called gold price support levels - all of these momentum players are looking at them. All it takes is one of the deep pocketed agenda driven groups to come along and beatdown the price and there goes another $30 to $50 - the chart watchers will easily follow this momentum. That is why it is important for bargin hunters to step in at this $905 - $915 price range. The market open tomorrow will be very important. If there is not enough support then the people with agendas will easily knock the price below $900, with increased selling pressure. On the flipside, the general markets were a bit calmer today. Hopefully that means less pressure from deleveraging gold sales.
Whatever happens, it's all going to be short-term anyway, just like the first phase in October. The fundamentals are too strong to keep gold down on a longer term basis.
Hopefully, our potential gold-based financing investors understand all of this.
Thanks for the heads up Carib. This new presentation is even newer than the one posted last Thursday. That was quite surprising to me.
Actually, IMO, this new presentation is one of the best they have ever done. I have always left that their previous Corporate Presentations were lacking, but this one was very well done - they just have to remember to finally remove Colina Dorada from that one Peru map (unless they received an after the fact extention on the option, that we are not aware of).
Overall, they did a real nice job selling the assets of the company on this presentation. Once they get time, they should also do a major update to the website - it adds little value right now. Good start with the presentation though. Not everything is going to improve overnight, but it's important for them to demonstrate solid progress.
By the way, I felt the tone of the presentation was one of confidence with regards to gaining financing and the restart of Lamaque in the near-future. Also, on page 7 they show financing for Lamaque as being perhaps about 90% on the way to the finish line. Of course, even if it was 99%, it still wouldn't mean it couldn't fall apart. Let's hope we are more fortunate this time. Let's hope they can finalize it either this week or next week.
If we can close off the financing real soon, you know, 58,000 ounces (Lamaque and SJ combined) this year is not bad, especially with this gold price environment. And, certainly, around 82,000 in next year and around 128,000 in 2011 (140,000 once full production is reached), should be very fruitful.
Once we get funding, at some point along the way many of those 1.1M M&I ounces will likely be converted to reserves. The question will then be about how the company will treat the extra Lamaque reserves. Will they extend the mine life from 11 years to 20 years or will they increase overall company production (SJ and Lamq combined) from 140,000 to 200,000, with perhaps a 15 yr mine life at Lamaque?
On page 16, there is a mine to the right of our San Juan property. I didn't realize another mine was located so close. It's called Cerro Rico. Century should take a quick glance to see if there are any signs of mineralization coming across onto our property.
I'm glad they mentioned the Yellowknife Northbelt properties. With availability of cash, I think it has good mid-term potential to expand the resource base (perhaps to where we can consider mine potential). Here is what I know:
An exploration company called Nebex Resources performed drilling on the property in mid to late 90s, during a low gold price period. They actually had solid success, at least relative to today’s gold prices. They performed a resource calculation (based on the drill results) that came to about 123,000 ounces of gold (1M tonnes @ 4 g/t). Nebex called it reserves. Actually, on a previous conference call Peggy mentioned that the resource total is 250,000 ounces at Northbelt. It’s possible that the difference between the current total of 250,000 resource ounces and Nebex’s 123,000 reserve ounces represent inferred ounces (vs the 123K that Nebex called reserves), or at least some sort of estimated ounces based on noticeable extensions of the veins – the zone remains open along strike and at depth.
Of course, these ounces were calculated pre-43101, but nevertheless they were based on solid drill results, which are transferable for 43-101 calculations.
If all goes well over time, Northbelt could eventually turn into an organic mine for us (not immediately but over time, if all goes well). It's located in a well established mining district. Also, Northbelt's mineralizations are northern extentions of a past producer - Con Mine.
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