One thing becomes apparent from reading this report. We need cash!!!!!
Solution:
We enter into a joint partnership to develop the Copper-Gold-Silver porphyry system contained within the huge San Juan property (220 Km **2). The reality is though, on the current timeline, it will be many years before we have capitol to do anything with this portion of San Juan. Add to this, we need a different mining approach and ore structure analysis consistent with copper mining and those associated markets.
So, then the next logical question is; what mining company has the technology, is current in copper mining technology, is cash rich, and might be willing to partner with us? Also, I would like to add, has a very real frustration with Canadian Gov’t Regulations and hence a motivation to go to Peru. This company, if you have not guessed it by now, is Taseko Mines Limited. The Trading Symbol is TGB. To put this into perspective, TGB had a 3Q profit of 17.5 M$. They also have an enviable PE of 7. What is also of interest is, that, TGB has just been thrown to the preverbal wrestling mat by a Canadian Federal denial of their Prosperity project with 3.6 billion pounds of recoverable copper siting in the ground. Given that TGB has only two major projects this is very significant, as witnessed by TGB’s recent price slide when the news came out. These fine TGB people obviously need a Canadian Winter / Peruvian Vacation / CMM Joint Venture Property Examination Business Trip after this devastating hit. So, let’s help these fine Canadian entrepreneurs out.
To make this happen at the negotiating table, we just might want to bring in some heavy weights who have been there before. In this case, the place to send the headhunters to is Nova Gold. What they have done without mining a single production ounce of gold will someday be at minimum be recorded as…..Legendary.
8 comments:
86 that idea.
I have some comments about the diagram on pg. 17 on the Nov. Corp. Presentation.
Firstly, from the May 5`10 NR:
``The exploration program will also examine potential rollover or `blowout` zones where the Bedard Dyke meets `north dipper` structures, identical to what was mined in the historical open pit``
This theory may still be on the table. The pg. 17 diagram shows where they think the north dippers may be located. The part that runs into the pit may have been mined out during the open pit days, but there seems to be plenty of other areas (in the diagram) to check for north dipper mineralization - certainly, in the pit walls, below the pit, the other side of the dyke, etc.
The north dippers would run beyond the dyke. As such, if successful at identifying them, I imagine they will increase our resource potential in this area.
There is also this note on pg. 17: ``Potential Stacked High Grade Zones``.
There has always been the belief that there are numerous high grade zones going down the dyke. Pg. 17 would suggest that this belief still exist today.
Pg. 18 shows the high grade zones at the upper levels. However, a good size portion of the dyke is still to be explored (vast mid section, the west, at depth) - mineralization is open in all of these directions.
The $2.5M (CEE) exploration financing should help us to make good progress in all (or some) of these areas in the future.
If possible, I would like to see them expand on some of these areas prior to coming out with the first Bedard Dyke resource count in 2011 (which I think is their intention anyway).
Thoughts on McNutt`s comment about potentially dewatering the mine slightly lower, in order access some extra (deeper) ounces that they are not able to reach today:
Everything I have seen and read in the past suggests that the Lamaque decline goes down to about 2,000 ft. As an example, pg. 14 on the Corp. Presentation shows the Lamaque decline. It is the squiggly line in the middle of the diagram, between the Lamaque side and the Sigma side.
Currently, the Bedard Dyke decline has been ramped down to the 3rd level. Naturally, the 3rd level is not even remotely close to the 1,000 ft level of the mind, nevermind the 2,000 ft level (like the Lamaque decline). You can view the 3rd level and the complete proposed BD decline on pg. 16 of the Corp. Presentation.
As we know, the near-term North Wall production will flow through the Lamaque Flats area, before flowing through the Sigma-Lamaque haulage drift into the Sigma pit area. They are currently developing the drifts from the Lamaque Flats to the North Wall. They will eventually also complete a North Wall portal and a North Wall decline, but that not the focus right now for near-term North Wall production.
As you can see, process of elimination would strongly suggest it is the 2,000 ft (existing) Lamaque decline that will likely be utilized to access the extra (deeper) ounces if they choose to move forward with the slight dewatering initiative.
This may be a small factor as to why the Lamaque Flats is contributing such a high percentage in 2011 relative to the 25% from BD and 20% from NW - 55% Lamaque Flats.
Another factor is that the Lamaque Flats is more advanced than the other 2 areas to begin 2011 (ramp up wise). McNutt may have given total tonnage percentage by zone for the entire 2011. We know that BD and NW is not starting 2011 at the same tpd level as the Lamaque Flats. Tonnage ramp up from all 3 areas will be staggered throughout 2011. With this in mind, it would make sense that the Lamaque Flats would have a much higher total tonnage contribution percentage relative to the other 2 zones. All 3 zones are expected to eventually reach 700 tpd (each) by end of 2011, hence their 2,100 2011 YE expectations. But until we reach that point, tonnage contribution will be staggered between the 3 zones throughout the year.
These PP's are never going to close with the price hovering at $0.38...
How long until we get back up north of $0.40?
Jimmy, I think you probably have it backwards. The price may not get much above 38 cents until the PP's close.
I know if I had the chance to participate in the PP, I sell my shares at 38 cents in a heartbeat, if I could replace them with 39-cent shares and a half-warrant. One cent for a half-warrant is a helluva deal.
I suspect that a lot of the shares being sold are to raise cash for the PP, especially when you see large blocks sold at market.
Carib,
You are correct. I forgot about those handy warrants. Why do you think it's taking so long for the PP's to close?
Jimmy
From Keith Hulley on the conference call:
``At the beginning of the year, our guidance to the market including the following: First, for the San Juan operations in Peru...... we are on track for the year and expect to remain on track, as previously quided.``
``For our Lamaque operations in Quebec, we gave guidance that we expect to reach Cash Flow Positive operations at Lamaque by the end of 2010, and will reach commercial production in the first half of 2011. Our guidance for 2011 of 80,000 ounces of gold in production also remains on track.``
It sounds like Keith Hulley is thinking Lamaque can become cash flow positive within the next 1.5 months. I had also previously heard something along these lines from Peter Ball.
If they can`t reach that level, on a sustainable basis, end of December then hopefully they can get there for early January. It would represent a very important milestone. More importantly, it would mean that Lamaque can carry its entire daily operating and Lamaque specific G&A costs out of its own daily/weekly/monthly gold production at current gold prices (while potentially still meeting the Deutsche Bank prepaid gold delivery commitment).
It would allow most of the $11M ($1.5M unit PP, $2.5M FT, $5M unit PP, assuming we get the full $2M over allotment) in current financings to go towards the development and exploration efforts at Lamaque.
It may allow us to avoid (or at least substantially minimize) further share dilution (due to financing) in both the near-term and mid-term
Century has done a good job cleaning up the Balance Sheet. As such, there shouldn`t a lot of near-term cash pressures from the Balance Sheet.
Now, if Lamaque truly turns the corner in the next 1.5 months, it can actually represent a cash supplier.
San Juan is already a cash supplier.
The $2.3M (excluding the $1M one time provision for Peggy) Corp G&A will be more manageable, from a real time cash perspective, once Lamaque begins to assist San Juan with cash supply via operations. Nevertheless, I would still like to see Century bring that $2.3M Corp G&A costs down to the $1.5M - $1.7M range. This amount doesn`t include depreciation and stock based compensation (options). Century is not large enough to justify Corp G&A costs beyond that range.
They mentioned that G&A Expenses going forward should average $1.5 million per quarter. Hopefully they're right.
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