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Dr Air Are you going here? Mineral Exploration Roundup will be held at the Vancouver Convention Centre East, under the sails of Canada Place from January 26-29, 2015
http://www.amebc.ca/roundup-2015-home/about-roundup
Front Page Northern Miner Tomorrows edition ICG.v Integra Gold
http://www.northernminer.com/issues/toc.aspx?edition=1/21/2015&er=NA
Integra's Sigma purchase a game changer at Lamaque
http://www.northernminer.com/news/intregras-sigma-purchase-a-game-changer-at-lamaque/1003432025/
VANCOUVER — According to Integra Gold (TSXV: ICG; US-OTC: ICGQF) president and CEO Stephen de Jong, his company’s recent acquisition of the 2,200-tonne-per-day Sigma mine and mill complex for $7 million brings a “better defined pathway to development and production” at its neighbouring Lamaque gold project on the outskirts of Val-d’Or, Que.
And if a recently released preliminary economic assessment (PEA) is any indication, the purchase could also offer materially improved financial returns. The new study models a 1,300-tonne-per-day operation at Lamaque that takes advantage of existing surface and underground infrastructure located 1 km from Integra’s Parallel and Triangle gold zones.
“The story behind the capital savings is the fact we no longer need any surface infrastructure at Parallel since we’re extending the underground workings right next to the Sigma mill,” de Jong explains during an interview. “In addition we’re seeing lower operating costs, which substantially decreased without the toll-milling. We’re optimizing the mill for our throughput rate, but we’re not removing anything, so if we need to scale back up to full capacity, we can do that quite easily. Long-term we have a clear path about how we can increase our annual gold production.”
Lamaque sits in the heart of the Val-d’Or gold camp and is underlain by steeply dipping, east–west striking volcanic flows and pyroclastics units intruded by intermediate mafic plugs, dykes and sills. Mineralization is characterized by “vein-type” mesothermal, structurally controlled deposits. The gold-bearing quartz tourmaline can be sub-vertical, moderately dipping or sub-horizontal veins.
The plan is to access Triangle via a ramp from surface 450 metres west of the deposit limit. The company notes that condemnation drilling completed in late 2014 for the proposed decline location cut “multiple high-grade zones” in the area.
Meanwhile, access to Parallel would be achieved through a 700-metre lateral ramp from the Sigma underground workings, which include a fully serviced portal at the southeast wall of the historic Sigma pit.
The PEA makes use of a resource calculated in September 2013. But since that time Integra has drilled another 70,000 metres, and plans to update the resource numbers during the first quarter.
Lamaque’s global indicated resources stand at 1.5 million tonnes grading 10.2 grams gold per tonne for 499,200 contained oz. Inferred resources are 488,500 tonnes of 15.1 grams gold for 236,500 contained oz. All calculations assume a 5-gram gold cut-off grade.
The resource update will be a milestone for Integra, since important aspects for Lamaque’s development is increasing the projected mine life. The mine could operate on current resources for 4.5 years, but drilling over the past 18 months appears to show expansion potential at Triangle, the Fortune zone and the No. 5 plug.
“There are a lot of big companies being public about the fact that Quebec is where they want to grow and spend money. Osisko is the obvious one, and it was a big statement for the jurisdiction,” de Jong says.
“As a company we’re pushing forward to production, but as we do that we become more valuable to anyone looking at us,” he adds. “The fact that we have our permits is huge because the first question you’re always asked is: ‘How quickly can you be in production?’ We check a lot of boxes except for mine life, and I think the real re-rating for our company will come when we demonstrate we can grow our resources.”
Recent condemnation drilling at Triangle discovered a potential near-surface extension 200 metres west of the deposit. The program tested the site of a proposed exploration ramp, but wound up discovering a large area for further exploration.
In early December Integra released assays from the target, with highlights including: 9 metres of 3 grams gold from 222 metres deep in hole 14-1; 1 metre of 3.46 grams gold from 39 metres in hole 14-10; and 1 metre of 3.25 grams gold from 91 metres in geophysical hole 14-3.
The company followed up with results from No. 5 and Fortune in early January. Drilling at Fortune focused on increasing confidence in two major east–west vertical shear zones 75 metres apart, while also partly testing for lateral extensions.
Highlights from Fortune include: 3.7 metres grading 7.37 grams gold from 201 metres deep in hole 14-2; 4.8 metres of 11.19 grams gold from 131 metres depth in hole 14-1; and 4 metres of 7.7 grams gold from 110 metres in hole 14-2.
The No. 5 plug is notable, as it sits just a few hundred metres south of the proposed underground development at Parallel. Integra punched 4,300 metres at the target in late 2014 to evaluate lateral continuity outlined in a program completed in 2012.
Drilling intercepted “multiple narrow, high-grade veins,” with highlights including: 9.5 metres grading 4.59 grams gold from 222 metres deep in hole 5-14-1; 7.2 metres of 3.06 grams gold from 240 metres in hole 5-14-8; and 1.5 metres grading 17.9 grams gold from 152 metres in hole 5-14-16.
“The No. 5 is a defined, intrusive plug that’s similar to the historic mineralization at Lamaque and Sigma. Now you don’t have vein frequency that you did at Lamaque, but what we’ve seen are interesting results from surface to 350 metres, which is intriguing because we could just fork off the drift we’re putting into Parallel and access No. 5,” de Jong says. “The idea with this type of deposit is that you want to have as many working faces as possible, so that’s one more production point that prevents bottlenecks at the mill.”
The updated resource will build the foundation for a prefeasibility study Integra plans to start this year, but Sigma is already making an impact at Lamaque.
The company’s previous PEA on the project was in March 2014. As a result of the infrastructure acquisition, Integra’s new study shows a drop in capital expenditures and operating costs. The company also figures it can drop its pre-production period and overcome permitting hurdles.
No provincial environmental impact study (EIS) is needed for the project, as Quebec’s daily production threshold is 2,000 tonnes. As a result of the Sigma acquisition, federal regulators and the Canadian Environmental Assessment Agency (CEAA) are considering the project an extension of the Sigma property rather than a new application. This will allow Integra to apply for an amendment to the EIS, as opposed to conducting a new study.
“The number-one reason for the drop in the pre-production period is the decrease in time we need to access Parallel,” de Jong says. “But the other thing that’s happened is the permitting. We hadn’t fully anticipated receiving permission to take the EIS at Sigma and amend it to include our property. That means we don’t need to spend eighteen to twenty-four months doing a whole new study. And that’s because as far as surface impact goes, only 3% is on the Integra-Lamaque side of the fence.”
On the development front, Integra reports that incorporating the existing infrastructure should cut its pre-production timeline by six months to 18 months. Capex estimates have also dropped by $7.3 million to $61.9 million, and operating costs have declined 17% to $551 per oz.
Annual production is relatively comparable, with Lamaque expected to produce 110,000 oz. gold per year compared to 112,400 oz. in the 2014 PEA.
The real improvement is evident in the updated economics. Gold-price assumptions have dropped US$100 to US$1,175 per oz., while Lamaque’s after-tax net present value has jumped US$25 million to US$113.5 million, and the project’s internal rate of return (IRR) is up 21% to 59%.
“We were public about the changes that would occur in the PEA after the acquisition, but personally I was a bit surprised about the jump in the IRR,” de Jong comments. “Some of that is based on the weakening Canadian dollar, but I think it shows the market that the mill is an extremely accretive acquisition for very little cash. The numbers we used, I think, are still conservative, so if you use spot prices today the economics are even more impressive.”
Investment bank M Partners has a “buy” rating on Integra along with an 80¢ per share price target, and noted in a Jan. 13 research report that “Integra is likely to be an attractive acquisition target because of both solid economics and near-term production potential. The proceeds from the company’s recent flow-through financing favourably position it to move the project into advanced exploration. Additional exploration success is likely to support the stock in the near-term.”
In December Integra closed a bought-deal private placement wherein it used Quebec’s super flow-through program to raise gross proceeds of $8.2 million. The company has in excess of $11 million to fund 2015 exploration. Integra plans on drilling 50,000 metres in 2015, and have up to eight drills operating by the end of February.
“Expansion will really happen at Triangle since it’s basically open in all directions. We’re also going back to the No.4 plug, which is open to the east. We’ve had some phenomenal results there in the past right from surface,” de Jong says.
“What we’re really looking forward to, however, is drilling new claims acquired in the Sigma deal to the northeast of Triangle. The ground is along what we call the No. 4 plug trend. These intrusive plugs that carry mineralization like the Lamaque mine show up really well due to the magnetite. We’re seeing a lot of these magnetic highs along that trend, and we’d really like to test those other targets,” he says.
Integra shares have traded within a 52-week range of 14¢ to 42¢, and jumped 5% on the PEA news before closing at 23¢ per share.
The company has 210.6 million shares outstanding for a $46.4-million market capitalization.
- See more at: http://www.northernminer.com/news/intregras-sigma-purchase-a-game-changer-at-lamaque/1003432025/#sthash.4oKyeB7n.dpuf
ICG.v Integra Gold. Quite a story brewing up there. The more I dig, the more I like. First in October2014, they acquired the assets of Century Mining Corp. from a receiver for 7M in cash and stock. They got a 2200tpd fully-permitted mill and tailings facility just 2km from their deposit. It includes an underground mine and 2.5M oz resource. Before the deal,Integra already had a high IRR PEA for a tolling arraignment for their 1 million oz 7gpt resource that is in the top quartile by grade of undeveloped gold deposits globally. With a 5gpt cutoff, they get about 750k oz at well over 10gpt
January 13, 2015 Integra released a new PEA. By any standard this was a tremendous document.
pretax IRR 77 %
NPV (5% discount) $184.3-million.
Preproduction CAPEX from $69.2M down to $61.9M
Preproduction period down from 24 to 18 months
Life-of-mine cash cost of $551/oz
AISC $731 per ounce at $1,175/OZ
pre-tax cash flow of $238M over a 4.5 year mine life;
increased gold recoveries across all zones by roughly 1%.
It gets even better. 2 value drivers not in the PEA:
1) 70,000 meters of drilling since 2013 that the company claims have confirmed the continuity of mineralization in each of the Fortune, Parallel and Triangle Zones
2) THE 2.5M oz resource that came with the mill.
These 2 drivers are scheduled to be in the updated PEA due this quarter and should:
expand the volume of mineralization;
drive the all-in cash cost down even further;
convert resources to reserves;
extend the mine life
increase the after-tax cash flow;
ultimately, at a lower risk, increase the overall value of the project
They are shooting to get to production in 18mths with a total CAPEX just over $60m. They have $12 million cash now and 35m warrants priced at .30 that should get exercised for another $10.5. I've never seen an IRR that high especially at $1175 gold. Finding a good deal on the remaining CAPEX shouldn't be hard.
Do some DD on this one. MC about $59m
http://investorintel.com/gold-silver-intel/clausi-takeover-targets-part-1-integra-gold-corp/
http://www.northernminer.com/news/update-integras-sigma-purchase-a-game-changer-at-lamaque/1003435475/?&er=NA
Dr Air Excellent points on the Canadian minors reaping higher gold prices while paying their costs in the weaker Canadian dollar. I've talked to a few Canadian mining CEO's who have brought this up and said, they are very happy with the POG in this range even going forward.
On another note if you look at the CAD dollar slide on a 2 year chart, than compare that to the Mexican Peso, you will see a near mirror image in a range of about a 10% drop each of the last 2 years with the Peso taking about a 5% hit in the last couple mths alone. They also are selling gold in USD and enjoying paying costs in their own lower valued currency. I even asked the CEO's if prices were going up in their currencys and they claim no at this time so its a true positive.
This hurts some, if you've already owned Cad security's through a US account. Your share price drops as the the Cad $ drops. I watched my accounts go down in USD's due to drop in gold, then supercharged by the drop in the non native stocks currency value going down. On the flip side, if your buying now and hold those securitys during a period where commodities including oil come back up, that situation along with the currency's coming back closer will work for you.
GWA.V GWSAF Gowest Gold. Looks like the market found it today. I was chipping away at the cheap shares knowing there is a lull in the activity. The market is thinking they will not get financing. Not going to happen like that. When this one shines, investors are going to wonder why they didn't see it coming. The writing has been on the wall. Link back here, lots of DD
Dr Air. One thing about any Lakeshore vs Endeavor mining comparison, that will always be a large factor is jurisdiction. Lake shore being in Ontario vs Endeavor mining being in West Africa and both having equal 2014 ebitda of 120m will always yield an extra 25 - 30% (roughly speaking) to the Lakeshore EV
As to Lakeshores reserves being low, wouldn't worry too much about that. They have 3 large high quality undeveloped deposits and will probably stay at the 5 years out resource figure. No need to drill more that whats needed to steer high quality ore to the mills.
I own Endeavor and sold LSG to early.
Dr Air request. ICG.V Im up 50% since my buy 3 weeks ago plus multi million volume the last couple days. The new mill coupled with the high grade resource, 2 mines, low CAPEX is going to set up INTEGRA very nice for very high cash flow numbers. I see a vision here and their just getting started. Lots more drill numbers to be added to the PEA and as you said in another post. The Canadian miners have an advantage right now and are looking at $1500 gold.
The new mill/mine is a game changer. If the catalyst they have now and in the very near future, are coupled with a steady rising price of gold, there is going to be a long steady raise in the share price creating a perfect storm scenario IMO.
Im asking, can you stop by the Integra booth, get the story straight from them, and see if you can come back and cool me down?
EXN Excellon res. and SAS St Andrews, couple of my favorites still, also up 50% this year
Thanks in advance
Checkmate28
CPTMatt, Couple ideas, It could be that many are expecting a softening of the POG short term or profit taking from tax loss buys.
Big opps on ICG.v Just went over my math. Checkmate said:
Key take In the first full year of production, the company will generate its market cap (~$52 million) in pre-tax cash flows on 111,100 ounces of gold, assuming US$ 1,175 per ounce gold.
Based on Life of mine ("LOM") cash cost of C$551 per ounce and all-in sustaining costs of C$731 per ounce, $1500 gold would add another another $95 million CF if I use a cash cost of $640. That figure allows for some fixed cost savings off the AISC
For some reason I did a calculation based on higher production numbers and threw that figure into my higher net cash flow calc.
Lets try again on the future value calcs.
starting from the PEA with $1175 gold with $52M yearly CF, adding $325/oz to the bottom line, will add $36million in CF.
$52M + $36M gives $88M yearly CF... WITH A 10X CF multiplier, we could see a market cap of $880,000 or a 17 bagger based from todays marlet cap.
They still need financing, 18mths time and POG to cooperate but I like the chances
Checkmate
DrAir Sure you must have read the ICG.v CEO.CA piece by now?
Quebec gold developer Integra shows impressive economics
Key take In the first full year of production, the company will generate its market cap (~$52 million) in pre-tax cash flows on 111,100 ounces of gold, assuming US$ 1,175 per ounce gold.
Based on Life of mine ("LOM") cash cost of C$551 per ounce and all-in sustaining costs of C$731 per ounce, $1500 gold would add another another $95 million CF if I use a cash cost of $640. That figure allows for some fixed cost savings off the AISC
Being as their new mill and mine comes with environment permits in place, they can get to production in 18mths with a total CAPEX just over $60m. They have $12 million cash now and 35m warrants priced at .30 that should get exercised for another $10.5. I've never seen an IRR that high especially at $1175 gold. Finding a good deal on the remaining CAPEX shouldn't be hard.
PEA shows their avg head grades over 8gpt and their growing resource has a cutoff at 5gpt. Jeech, most resource avg grades are under Integras cutoff. I can imagine what the sensitivity charts look like.
With a 2200tpd mill and those grades, they can push a lot of gold. This is going to be a serious project.
New mill came with a past producing mine, including a 600k high grade resource that in not included in the PEA, plus they are pushing the drills. Their mill has capacity for this added resource addition and I suspect we'll see it should POG move up and cash flow allows.
Being in in a past proven hot area of Quebec, They get the jurisdiction box checked and mgt is all star caliber.
I posted this as a no brainer about 2 weeks ago (with reasoning) when the shares were .18 (now.24) Was thinking on selling the news today, but looking back on my bad decision to sell the high grade Richmont project early for a dollar profit, I think I'll hold and that things are just getting started.
For a nice detailed layout of this investment
http://ceo.ca/2015/01/13/quebec-gold-developer-integra-shows-impressive-economics/
Checkmate28
Integra Gold ICG.V just knocked it out of the park with the new PEA. Tried to warn you after I bought. Link back for more DD, but today's news is all you should need and it doesn't include anything from the new resource just acquired. LOM AISC at $731. Been steadily going up and tomorrow should get a bump as news came out after market. The mill acquisition was transnational.
Pre-tax IRR of 77%, NPV (5%) C$184.3M @ US$1,175 Gold Price
VANCOUVER, BC--(Marketwired - January 13, 2015) -
PEA Highlights
Base case pre-tax IRR of 77% and NPV (5% discount rate) of C$184.3M (after-tax IRR of 59% and NPV of C$113.5M) (1)
Pre-production capital requirements reduced by C$7.3M from C$69.2M to C$61.9M
Pre-production period reduced from 24 months to 18 months as a result of existing infrastructure and permits from the acquisition of the Sigma/Lamaque Mill and Mine Complex and the optimized mine plan for the North Zone
Life of mine ("LOM") cash cost of C$551 per ounce and all-in sustaining costs of C$731 per ounce
Updated Preliminary Economic Assessment (the "PEA") uses the same mineral resource estimate as the previous PEA and does not incorporate drilling completed since April 2013 or any of the Sigma/Lamaque mineral resources obtained in the acquisition noted below
Dr Air MUX/MUXTO Looks compelling. Keep it coming. Cant argue with the mgt (Rob McEwen) and like the jurisdiction.
In my mind comparison to GORO Gold Resources. You get little over half the production at GORO for about half the market cap. Was a steal Dec at $2.75/sh. Im expecting AISC for GORO to improve to near $900 Q42014 and 2015 due to the higher grade ore their mining now. No official guidance for 2015 production yet, but with the recent doubling of the mill capacity, they have plenty of extra paid for capacity. Their busy drilling and I think there waiting to see how switchback turns out. I could easily see the case for between 110 and 140k production rate H2 2015. Can't discount their history as the highest yield dividend payer of all the gold minors through the gold glory years of over $1200 gold.
How could I forget Gowest Gold GWA.v GWSAF one of my favorites, and no better time to buy than today while someone is year end dumping for tax reasons.
One only needs to know the conservative nature of mgt and to read the timeline from the presentation to see the potential catalysts there.
http://www.gowestgold.com/wp/wp-content/uploads/2014/10/Corporate-Presentation.pdf
Older PEA showed IRR of 50% based on 95k/yr production of $1200 gold and contract processing with Xstrata Glenncore. Upside from there is huge based on the quality of the resource, the fact that the resource comes from 1% of their Timmins ON land package and the testing of ore sorting that could add 50% to their numbers alone.
They are financed through pre fease but the big question, will be how much will future CAPEX cost them to rehab the Xstrata D Line and prepare the underground? Its my belief that their new finance partner Future Fortune, is a true partner and will be their for fair financing. They want the upside to the entire North Timmins land package and need the GWA technical team. Insiders buy on the open market here and control a large portion of the company, so their is little worry of a takeover.
Xstrata could easily step in and help to finance the mill as it benefits them greatly.
The big picture here is that XstratraGlencore buys them out for many multiples, once GWA irons everything out. There 4 lines would be perfect for a large growing resource that Gowest will have, and Xstratas mine is nearly mined out. The alternative would be an expensive mine closure and 1600 lost jobs to the legendary mining town of Timmins ON. Everyone involved, including government has much to gain from this partnership. The reverse could happen as well. Gowest with their well healed financial partner could look to acquire the Xstrata lines in the future.
I had a bid in to add the other day but hit the Integra shares instead.
Current bid of .055 Canadian is outstanding.
Happy New Year
Headed to a 4 day party.
Checkmate28
Integra Gold ICG.v ICGQF was a great recent find for me. They just acquired for 25M shares a new 2200 tpd mill worth $100M alone, and got a second mine for future production for free. The deal makes this a no brainer coupled with the high grade resource in a top jurisdiction run by very competent mgt. The mill wasnt worth 2 cents to the other companys that were further away so Integra got a steal on a mill 500 yards away and a huge new catalyst.
To save time my Dec 24th notes
MC 38M @ .18
CASH 12m 40k aggressive drill plan
In Quebec mining town of 35k
Aquired 2200TPD Mill w/mine (100 mil replacement)
Current NI43101 725K oz 12GPT (5GPT CUTOFF) indicated, plus inferred.
Resource Update coming Q1-15 to include new mine
Old PEA 100K at 50% IRR pre tax at $1350CaAu. CAPEX $69M, New Mill will reduce CAPEX and increase IRR
Catalyst Updated PEA in January and updated 43-101 in Q2
I expect the shares to respond well.
Also reentered Dr Airs TGZ based on the low valuation for the current low cost production but mostly the near/mid term bump, coming from the new acquisition.
Looking to add EDV for the leverage also GORO, SAS, CSQ EXN are all compelling to me on any dips.
If silver shows signs of getting back near $20, reducing risk, there are a few companies I would leap into. Aurcanas Lenegra comes to mind, as does Golden Minerals deserve a look for the revamp of their entire operation towards low cost production.
Going to follow Silver Bulls refocus to base metals and its zinc resource. Could turn into a sleeper ticket if Zinc goes where its supposed to. Looking back up my post, most names I've mentioned are polymetalic mines with strong base metal content.
Checkmate28
bbotcs Re MMT While I am looking to add to my Mart position over the coming months when opportunity presents, you missed one I worry about.
4) Oil theft rates going to record levels, as it is this oil that supports the economy and the Nigerian Government.
GORO Short Interest
http://www.nasdaq.com/symbol/goro/short-interest
Picked off some cheap GORO today adding to my position.
I can see the day where GORO pays a 30% yield on the shares I buy today.
At that same time those shares could be up 10 times in value from todays price. Would only take $1900 gold/$28 silver
There are a lot of companies that could go up 10 times but you have to look very hard to find one with risk as low as GORO Gold Resources. They could survive $500 gold prices.
Chen Lin on GORO 2 days ago
CL: I'll name two. The first is Gold Resource Corp. (GORO:NYSE.MKT; GORO:OTCBB; GIH:FSE), which is a low-cost gold and silver producer in Oaxaca, Mexico. The company is doing quite well. It has no debt on its balance sheet and pays a monthly dividend.
TGR: Gold Resource devotes one-third of its cash flow to dividends. Should it continue to do so?
CL: If the gold price continues to drop, I would argue that management should cut the dividend and buy other assets instead because every other asset is a fire sale. The point is Gold Resource has financial flexibility, and that's a very good thing for a mining company right now. That's why I like it.
In this market, we might have to resort to trading to take advantage of these conditions that should see some of our good names drop hard for no reason.
While not a good name I called ANV - Allied Neveda a bounce leverage play on Nov 6th. Could have bought at .87, trading now after hours in the 1.70s Thats a 100% 10 day gain just for taking the chance.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=107915197
Also called CSQ on Nov6th at .085 5 days later traded .13 Nice gain
CSQ Canamex-resources-corp down 25% today. Great buying opp. Trading at .085 down from .25 in August. MC only 11 million. Solid, high grade explorer thats going to build IMO
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=107905826
If anyone sees anything crazy, as to large price drops for no good reason on any of our better names, they should post it and with reasons they think its a great buy or trade.
Like Chen says in his article, we need to be ready to scoop the best value plays when the tide turns on the metals
Checkmate28
I had to break the ice. Has this board ever had an 8 day period with zero posts?
Pretty good volume on many of the better names today. Typically were seeing a further sell off after a good day recently.
RIC Richmont hit a 52 week high. At this point I think its better to wait as Q4 should be soft as they lose production from one mine and wait for Island Gold to hit its stride mid 2015
Chen Lin Says Gold Miners Need to Produce at $1,000/oz or Less to Survive
expects a probable near-term low of $1,000/ounce.
http://www.theaureport.com/pub/na/16369?utm_source=delivra&utm_medium=email&utm_campaign=Gold+final+11-17-14
LC I agree 100% ANV would be a gamble now.
I am keeping 2 lists both of which are waiting for a confirmation of a bottom or support.
I wouldn't buy anything off my leverage list now, but I want a list of fully DD'ed company's ready to go, should by conscience confirm an upward movement in metals.
The truth is, for the first time in a good while, I'm worried that in light of the illusion that the US economy is in good shape, the dollar will stay strong, and money will move off the goldd fear trade to dollar backed investments, and that this may last longer then I think. Hopefully I am marking the bottom capitulation, as to being from the last die hard group to fear and question my long gold belief. My fear being, Maybe their right for a while and I have dead money for a couple more years.
As to now, there are enough quality low cost producers, with quality assets on fire sale daily, to keep me away from the more risky leverage plays. My dollars are waiting for Dec
LC Re ANV Allied Nevada Im not here to tell you they'll make it, but I did mention them here 2 times here as a good potential leverage turn around play with a good degree of risk but high reward.
The potential of ANV with their backs up against the wall, getting things in order, becoming reality, would make a swift move up in the share price netting several hundred % profit in short time.
ANV has assets/production/ that would sell for more then the current MC and would make a great value buy for a cash heavy company looking for production. Their problem is servicing the debt load $250/oz with their current costs. Their are several options for an ANV up against the wall to mitigate the risk.
Hot off the press, an author who agrees and makes the point much better then I could.
Allied Nevada Has Been Left For Dead: Why A Speculative Long Position Makes Sense
http://seekingalpha.com/article/2642585-allied-nevada-has-been-left-for-dead-why-a-speculative-long-position-makes-sense?app=1&uprof=44
Meanwhile, the good news is lost in the chaos, and while it isn't plentiful, it does exist. But more importantly, the dire situation facing Allied Nevada has forced it into a corner: it needs to solve its problems now, or the bondholders will wind up owning the company.
That being said, I think there is an opportunity in Allied Nevada shares. It is not a "no-brainer" buy, and it certainly isn't without risk, but considering that the downside is priced in, and considering that the company is going to act in order to improve its financial situation (even if this means diluting shareholders or selling assets at a depressed price), I think that the risk/reward favors the bulls at this point. Before considering why this is the case, let's first briefly look at the situation that the company is in now.
An Overview of Allied Nevada
Allied Nevada owns one of the largest gold and silver deposits in Nevada at its Hycroft Project. The project currently produces a little more than 200,000 oz. of gold per year, although this is very little compared with the massive resource, which exceeds 18 million gold equivalent ounces. 2.7 million of these ounces will be processed using heap leaching, while the rest will be milled once the company completes a much anticipated expansion plan.
The milling operation requires well over $1 billion in initial capital that Allied Nevada doesn't have, and this asset is essentially on the backburner unless it is used as a bargaining chip in a merger or a JV deal, although it is a quality asset.
The current heap leaching operation should be slightly cash-flow positive even at the current gold price. The company generated ~$5 million in cash flow in the third quarter on 52,000 oz. of production, with gold price about $100/oz. higher than today's price. But investors need to keep in mind that the company sacrificed gold production and efficiency in the third quarter, in order to reduce its strip ratio in future quarters. It is worth citing the exact language found in the Q3 earnings press release (p. 2-3)
During the third quarters of 2014 and 2013, our waste to ore strip ratio (excluding stockpiled ore) was 3.7:1 and 0.7:1, respectively, and during the first nine months of 2014 and 2013 our waste to ore strip was 1.7:1 and 0.7:1, respectively. The mining of increased waste tons during the third quarter and first nine months of 2014 resulted in lower third quarter production but was necessary to open up new mining areas for the 2015 mine plan. During the fourth quarter of 2014, we plan on lowering our strip ratio by focusing our efforts on mining increased ore tons with ore grades higher than those mined during the first nine months of 2014.
In short, the company mined additional waste in the third quarter, in order to reduce its costs in subsequent quarters. This should lower costs so that the lower gold price is offset, making the operation cash flow-positive going forward.
But the real issue is the company's enormous debt obligation, which I've previously stated adds ~$250/oz. to production costs when we consider interest obligations alone. The following table lays out the company's future debt obligations, and as you can see, they are substantial in the near term.
Missing Chart***
(Source: Allied Nevada's 10-Q)
Now $128 million in obligations in the next year is substantial. The company had $170 million in working capital, but only $5.7 million of this is in cash/equivalents, and $188 million is in gold and silver ore on the leach pad, which has been shedding value and which takes time to process, making it not immediately available. While the company does have an additional $75 million credit facility ($58.6 million available as of Sept. 30th), increasing the debt load won't solve any problems, but will only stave off immediate ones which are becoming more pressing.
The Current Situation And The Potential To Generate Value
In essence, the company is nearing the end of its rope. But just because Allied Nevada is being forced into survival mode doesn't mean that it is a poor investment, especially from such a depressed level. The fact that Allied Nevada in particular is in this situation is actually extremely promising for those looking to get into the stock at current levels because of the vast disparity between the quality of the company's assets and its fiscal situation. Virtually any of the actions that the company can take in order to stave off bankruptcy - other than borrowing more money - can be extraordinarily bullish.
Dilution
Long-term shareholders are probably now wishing that Allied Nevada had dumped stock onto the market at $40/share a few years back, but for those looking to enter at just over $1/share, dilution could be a catalyst.
If the company wanted to issue enough stock at, say, $0.90/share in order to meet its obligations for the year, it would need to issue about 140 million shares, bringing the total share count to 245 million, giving the company a valuation of $260 million. For a company that is going to produce 240,000 gold equivalent ounces next year, this is still a very low valuation. We need to also take into consideration the fact that my concerns regarding the company's effective cost of production would be behind the company. If the company can keep sustaining costs down, as it plans to in the 4th quarter (Q4 sustaining costs are expected to be $10 million), then sustaining capital is about $170 per gold equivalent ounce. Now cash costs were ~$850 per ounce in the third quarter, but we saw that this is elevated due to the higher strip ratio. Assuming a reduction to $800/oz. (probably conservative), the company's costs are roughly $970/oz, meaning that it is earning $200/oz. on an operating basis. At 240,000 gold equivalent ounces, the company is generating an operating profit of $48 million, which means the shares would be trading at just 5.4 times 2015 operating cash flow. Not only is this inexpensive, but we need to also consider that such a move would scare off the vultures looking to short the company into bankruptcy, and this would generate a short squeeze.
Selling A Stream or a Royalty
Dilution is going to irk long-term shareholders even more than the current carnage, so I think this is a likely option. Fortunately, it is a good one, and one that the company mentions explicitly in its 10-Q as a possibility.
There are innumerable ways for such a deal to play out, but if we were to assume that the company sells a 5% stream on the Hycroft Mine with a price of 25% of the spot price of gold/silver (a common type of deal we've been seeing of late), such a deal would generate $875/oz. in gold revenues and $12/oz. for silver. Now on the heap leach operation, this would amount to $10 million/year in revenue for the streaming company. Discounted at 5% for 10 years, it is worth $81 million.
But it gets better when we consider the expansion ounces, which would generate $30 million in streaming revenue per year for 18 years at current prices. Even if we discount it at 7% out 5 years, it is worth $230 million, meaning that a company such as Royal Gold (NASDAQ:RGLD) or Franco-Nevada (NYSE:FNV) would be willing to pay $300 million for the whole package, and possibly more, given the exploration potential. This figure dwarfs the company's current market capitalization, and having that sort of cash on hand would essentially eradicate market fears of a liquidity crisis, which would send shares soaring.
An Outright Sale of the Company
Allied Nevada is worth substantially more in the hands of a major that is well-capitalized than as a standalone company. The reason for this is that in the hands of a major, Allied Nevada's obligations wouldn't impact the effective production cost per ounce to the extent that they are now. We saw, for instance, that the company's interest expenses alone are tacking on $200/oz., and this rises even higher when we consider that the company has to pay off the principal on its obligations as well. If a company such as Goldcorp (NYSE:GG) were to buy it, the interest expense of ~$40 million/year would smooth out over 3+ million ounces, and the obligation would be virtually negligible on a per-ounce basis. Thus, the company's debt load would have a minimally adverse effect on the DCF valuation of its assets, making the company's cash flow potential roughly $40 million/year greater for the acquiring major. That, combined with the fact that the company has an economical expansion project in one of the best mining jurisdictions in the world make this a no-brainer for a potential acquirer, so long as that acquirer is willing to put the time and capital into bringing out the value of its assets.
CSQ Canamex-resources-corp down 25% today. Great buying opp. Trading at .085 down from .25 in August. MC only 11 million.
Solid, high grade explorer thats going to build IMO
Gold Resource Corp and Hecla both major share holders.
Drop is on low volume. Probably a tax seller dumping a position at a time where bids are low.
Were going to see these day by day and thats what Im looking for. Then before buying, we need to do a final refresh DD to make sure there is no fundamental reason for the drop.
http://www.stockhouse.com/companies/quote/v.csq/canamex-resources-corp
Another thing marking the bottom that I saw last year during December was insider buying. Ive been watching for this, and its picked up briskly this last week with the miners. If anyone knows a good value, its them.
Also increased M & A Activity should help signal better times
Couple of my favorites hit the last few days
https://www.canadianinsider.com/node/7?ticker=SAS
https://www.canadianinsider.com/node/7?ticker=RD
https://www.canadianinsider.com/node/7?ticker=DNA
Sorry Bobwins I had my head in the sand! Actually I've been thinking about a response to that question every day and was not going to forget. Didn't want you to think you lost all your friends.
Another problem is, when you think you have a handle on the best buys out there, things change so fast my head is spinning.
I also was hoping that we could collect some ideas here. I can only stay close to about 30 stocks so there are many other great pics that may be better then some of these. I just dont study them.
I think we need to be thinking about 2 kinds of stocks.
Contrarian leverage stocks that are sold down to nothing with tons of leverage should metals bounce back Like:
ANV Allied Nevada FROM $30 DOWN TO .80
AUN Aurcana From $9 down to .23
GCM Gran Columbian fROM $55 DOWN TO .55
AUMN Golden Mineral From $29 down to .47
CDE Coeur Mining From $35 down to 3.50
Stocks that have the lowest AISC, plus cash that can survive the storm
GORO
TGZ DR AIRs pick
EXN
EDV
Also really interested in DD'ing Red Eagle. Looks like a great prospect.
Bobby EXN.T I posted before the financial came out. Yes they had a bad quarter, but they are still CF positive for the year and the bad Q was due to an generator failure and lower grade Mantos. I had spoken with IR about a week ago and they are into the higher grade Mantos and equipment is repaired. The expected bad Q plus, equipment failure created a buying opportunity IMO. Humm LSG plus 50% to $1.32 or EXN up 50% to $1.26 Thats tough I like them both
The Company's adjusted net loss of $2.4 million during the third quarter was primarily due to low production during September (and consequent lower production during the quarter of 455,150 AgEq ounces), which resulted from a transformer failure in the Guadalupe South Manto and associated increased water management in the Guadalupe South and 6A mantos.
Lower net revenues of $7.2 million compared to $11.6 million during Q3 2013 resulted from (i) lower production of payable silver ounces relative Q3 2013, (ii) lower silver grade of 550 g/t Ag in Q3 2014 vs. 975 g/t Ag in Q3 2013, though consistent with estimates for the Platosa mineral resources mined during the period, and (iii) lower silver prices of $19.00 in Q3 2014 vs. $22.54 in Q3 2013.
Exploration expenses increased during the quarter to $1.3 million, as the Company carried out a 2D seismic reflection survey at its Platosa property in Mexico and drilled nine diamond drill holes totaling 4,328 metres. The seismic survey provided significant structural data and the Company is continuing its analysis of the results while considering future plans to use this effective structural mapping tool in conjunction with other geophysical data. The Company expects to monitor and incur exploration expenses in the fourth quarter and into 2015 relative to silver prices and the Company's production profile.
The Company spent $1.0 million in capital expenditures for mine development in Q3 2014 compared to $0.8 million in Q3 2013. Mine development continues to be a priority for the remainder of 2014 and early 2015 as the Company prepares to access the higher grade Rodilla and 623 mantos, the latter of which hosts mineral resources of 83,000 tonnes at 1,232 g/t Ag (1,777 g/t AgEq).
Total cash cost per silver ounce payable was $15.52 during the quarter versus $6.17 in the third quarter of 2013 and $9.03 in the second quarter of 2014. All-in sustaining cost ("AISC") per silver ounce payable was $25.77 during the quarter compared to $11.50 in the third quarter of 2013, primarily as a result of lower silver ounce production. Excluding non-cash components of AISC (share based compensation and amortized reclamation costs), all-in sustaining costs during the third quarter of 2014 were $24.97 per silver ounce payable and $17.50 per silver ounce payable year-to-date.
Excellon defines AISC per silver ounce as the sum of total cash costs (including treatment charges and net of byproduct credits), capital expenditures that are sustaining in nature, corporate general and administrative costs (including non-cash share-based compensation), capitalized and expensed exploration that is sustaining in nature, and (non-cash) environmental reclamation costs, all divided by the total payable silver ounces sold during the period to arrive at a per ounce figure.
The Company believes that further decreases in production costs per ounce remain attainable in the near term through further reducing water inflows into the mine, managing electricity usage and accessing higher grade mantos in late 2014 and into 2015. The Company increased capital expenditure in the second half of 2014 and may also conduct further exploration, both of which may contribute to increases in AISC per ounce
EXN EXLLF Excellon Resources at a 5 year low. Insane cheap valuation. 2.5million oz profitable silver miner selling at an EV near $35M
These guys have the highest grades in Mexico and are set up to last through anything. Table pounder if your buying today
Traderfan, Their cashed up enough to get them through the feasibility study and permitting. Indiders own about 40% of the shares. Not a worry for awhile. We already took the hit.
Bobwins. Thanks I caught Rick on KWN. Besides you LOL, If I needed a mentor, Id choose him. As to juniors, Im counting on prices coming down. I have some cash I'm holding just for that. I think were seeing it on a daily basis. 50 mining stocks on my portfolio and ALL are red today. I sort them by worst performance multiple times per day. When I see a downer 15 - 20% I ask myself, is there a good reason why? Many times they are some of my best profitable miners down on very low volume. Im counting on prices coming down, even the ones I own.
We just have to make sure we have the survivors. Other than Gowest and Aurcana ugg and a couple others, Im only holding cash flowing companies companies.
Funny someone made a comment that Lenic Rodriguez was on the sidelines with his cronies waiting for Aurcana to go bankrupt and I thought? I wouldn't put it past him.
Aurcanas LeNegra mine is a highly impressive low cost property, with probably 50+ years of mine life and capable of 10,000 tonnes per day. With Rodriguez gone, they are focusing on costs. Im hoping they get Lenegra profitable enough to carry the whole company, Shafter debt and all, even at $17 silver. I think its possible. If that happens and they get Shafter on its feet, plus a few extra dollars in the price of silver and they might make the story of the year. It would make a 25 - 50 bagger with $30 silver.
I spend a lot of time looking for these types of stories, high risk now, but with huge catalyst and just waiting until we get the green light.
Checkmate28
Traderfan RE Gowest Gold GWA.v Other than lack of bid, due to the overall condition of the Gold Juniors, I dont know of any reason for the price decrease. They have plenty of money to carry on for a good while. I imagine the office isn't worried about the PPS now either and are zooming forward with the Prefeas study and their permitting.
http://web.tmxmoney.com/pricehistory.php?qm_symbol=GWA
You can see that the last 14 days, there has only been $47700 worth of stock traded. Lots of stocks are going to drop during tax selling season and if metals go lower, lack of bid is going to show up on the PPS.
Now if Im talking with my friends, Im going to tell them, I think Gowests propertys are every bit as good as their neighbor Lakeshores. Lakeshore had a headstart in the sense, they started with mines and a mill and Gowest has to build. There going to be some setbacks before they get their stride. They have been executing well under the circumstances IMO.
Abitibi Greenstone Belt, historic production and reserves of over 143.7 million ounces of gold, or 48% of all the gold in Canada. The Timmins Gold Camp alone, a relatively small portion within the Abitibi Greenstone Belt, accounts for 70 million ounces. Gowest sits in the heart of Timmins. So this means Timmins has produced 25% of all gold in Canada.
Now heres my thesis and I entirely dont have enough information yet. Fact, Gold is nearly everywhere in Timmins. Gowest property sits in Timmins on a previously undiscovered area due to the nature of the overburden on that land. You see, previously, current technology could not find the gold, because of the overburden (dirt) covering the rock out croppings and soil samples were useless. Its only recently that technology could fly over and map the hot spots with the 3d magnetic resonance testing. Gowest can now see through the dirt. Their total 1.5M oz compliant gold resource, sits on less than 2% of their total land package. I think they could have a multiple mine gold camp on their property over time. I should get an update soon and will post if their is anything interesting.
CHECKMATE 28
Lake Shore Gold LSG) Knocks it out of the park with Q3 Net earnings $7.9m. In 2012, they leveraged the farm to finance what were seeing now while everyone screamed dilution. It paid off. It was simple to me. A Timmins property with Lots of Very high grade gold, just ready to be cherry picked. Because of grade, they had the right formula even with $1200gold. Just Needed execution. Cash costs $588 AISC $861 year to date! I didn't see that coming.
Third Quarter 2014 ("Q3/14")
-- 58% increase in gold production from third quarter 2013 ("Q3/13") to
45,600 ounces
-- 41% growth in sales from Q3/13 to 45,500 ounces
-- 15% improvement in cash operating cost(1) per ounce sold to US$594 from
US$701 in Q3/13
-- 16% improvement in all-in sustaining cost(2) per ounce sold to US$858
from US$1,207 in Q3/13
-- Total production costs(3) of $29.6 million
-- Capital expenditures of $15.2 million
-- Net earnings of $7.9 million versus net loss of $1.7 million in Q3/13
Nine-Month 2014 ("9M/14")
-- Record production of 142,500 ounces, up
72% from first nine months 2013 ("9M/13")
-- 65% growth in sales from 9M/13 to 142,000 ounces
-- 31% improvement in cash operating cost per ounce to US$588 from US$856
in 9M/14
-- 34% improvement in all-in sustaining cost per ounce sold to US$861 from
US$1,307 in 9M/13
-- Total production costs of $91.6 million
-- Capital expenditures of $39.4 million
-- Net earnings of $25.7 million compared to net loss of $7.8 million in
9M/13
Cash and bullion(4) at September 30, 2014 totaled $67.3 million, an increase of $33.3 million or 98% from $34.0 million at December 31, 2013.
Tony Makuch, President and CEO of Lake Shore Gold (LSGGF), commented: "Q3/14 is our fourth consecutive quarter of generating net free cash flow, a period during which our cash and bullion has increased by over $50 million. We have achieved solid production growth year over year, and are one of the lowest cost producers within our industry. Total cash costs per ounce sold were US$594 in Q3/14 and US$588 in 9M/14, while all-in sustaining costs averaged US$858 per ounce in Q3/14 and US$861 per ounce year to date. Given our results to date, we will produce at least 180,000 ounces of gold in 2014 at costs lower than our guidance.
MTO.V MEAOF Metanor Reports Q4 Net Income of $1,078,441 on record production of 13K oz
Very interesting. A few thoughts:
They did meet their guidance for the year and continue to hone and increase their operations.
Their in the Timmins camp producing from a previous high grade underground mine.
They have lots more gold to find at Bachelor and about 50% spare capacity at their state of the art paid for newer Bachelor mill.
If they get promised electricity up the road at their Barry property, look out, because this will be a whole new company. This property is compared to the Trelawney property that IAMGOLD paid $600Mill for. They've already trucked in their bulk sample from Barry to Bachalor and it works. They could make money just trucking it to their spare capacity.
Cons: Electricity although promised by government, could take awhile.
Management has a habit of over promising. They will have to shake that to get my money.
But for .08 and a MC of $24mill, its a buy if they just stay even and wait for the electricity or price of gold. The right news and I would hop on in a hurry
Not much on my buy list. Waiting for more tax selling, Most fund companies have fiscal years that end on October 31st so expecting some bargains and maybe another round in late Dec if we dont get a bounce in gold.
Some incredible buys out there, should price of gold take the risk off.
PTAXF.. $0.251 Thanks
Gold Resource GORO (Bad news)reports Q3 production of 17.2K gold equiv. oz., which brings total YTD production to ~65.1K gold equiv. oz
Q3 production fell 28% Q/Q as slower than expected mine development resulted in fewer tons delivered to the Aguila Mill; GORO says the production issues revealed needed managerial changes at the Arista mine, which are underway.
They acted swiftly and fired the General Manager and hired Mr. Oscar Zelaya former GM of Endeavor silver
GORO also maintains its 2014 outlook at 85K-100K gold equiv. oz. So they are hoping to hit the lower end of guidance for the year.
Coincidentally I had a call into GORO IR and I received that call right after the news came out.
Only thing I can add, is that there were a few problems with water and that they are back on track.
Im not to excited but will hold my shares. Expecting a dip tomorrow.
Dr Air LOL! RIC Heres how it happened. You enlightened me to the story of RIC Richmont Mines, a then mediocre company I'd hardly known anything about, I did about 30 minutes of research, put the numbers together and immediately bought the shares before even finishing the research. I knew I would at least get a pop out of the news. I almost never buy that fast.
I followed up with deeper research, and as always, I'm looking for the holes in the story. It was Jennifer Aitken, the company IR spokes woman who set me straight. I was expecting a continued shot up in everything, as they got the island gold expansion going. I was expecting 150k production next year and up from there. She enlightened me on the 2014 H2 numbers going down, and the fact that the Island Gold project would take much more time than I was thinking.
I appreciated her honesty and openess (new word) and she impressed as one of the better IR persons Ive spoken with.
In the name of getting balanced real information on the board, I posted the negative points as well as the bright future and would do so even owning the stock. Sometimes I broaden my posts with information for new people here, knowing you know most of this stuff anyways.
Simply put, I think there is some time to buy the shares, before we see another substantial run up in price. My call to Jennifer prompted me to take my dollar per share profit, thanks to you :) and re access the situation. The only thing different thats happened since my call, was they have fast tracked Island Gold and obtained the new CEO.
Do yourself a favor, Give Jennifer a call.
Hope I helped someone here.
Checkmate28
Dr Air Re: RIC
Since I hoped on at $1.62 I put in a sell for 2.62 and was out quick. They had an exceptional H1 but H214 production should be down. They hit a very high grade area to pull off H1. H2 numbers will be a disappointment to many, because grades, tonnes and gold being down, should weigh negative on the costs and CF side. This might present an opportunity.
Nine month 2014 gold production of 71,354 ounces
2014 guidance has been increased to 85-90k ounces
that leaves 15-20k for Q4 and a down quarter.
Also, the Pit will be depleted this year, and they will run that stockpiled ore through H1 2015" Starting H2 2015 they will be minus nearly 20k OPY production from this. These last 2 points should be a negative for the shares short term IMO. I dont think most realize this yet.
Developing 600M level will take time, Drifts Venting, elec ect Some production starting H1 2015 but the real progress will come in H2 2015 I guess. This is VERY high grade ore once they start. Production should spike as costs go down. This is why we want to be here, now or maybe better sometime in H1 after the above neg events take place. If further drilling increases the strike, we could see other additional production increases, due to substantial increases in tonnage as well. This will cheaply add capacity to the mill as this is higher grade clean ore.
With their experience, 38m cash, low market cap coupled with their increased production, the shares are an incredible value. The only thing that keeps me from getting back in now, are the large numbers of other incredibly good deals out there. Im Saving some cash for tax loss season. That should be sure to offer some of our best value company's at even greater discounts.
Checkmate
EXN.T EXLLF up 25% Was a no brainer sitting at the 52 week low. Todays PR was business as normal, but looks like some noticed the low costs today.
"Production during the first two months of the third quarter was solid, with costs trending significantly lower," stated Brendan Cahill, President and Chief Executive Officer. "During August, we milled over 8,500 tonnes, a monthly record, at net cash costs of $2.52 per ounce, demonstrating Platosa's potential to significantly improve its cost profile with higher production rates. Unfortunately, a transformer failure in mid-September complicated water management in the 6A and Guadalupe South mantos and limited production during the month, which impacted production totals and costs for the quarter. Production is now returning to normal and development continues into the higher grade 623 and Rodilla mantos."
Unfortunately the transformer problem is going to effect Q3 numbers. Reason being is the their production is from an aquifer and controlling the water is important.
On the upside, they are in a higher grade mantos for awhile. That will push the numbers higher for q4. Another bonus is the higher prices they are receiving from the Zinc production.
Still a great low risk company to have while metals trudge the bottom.
Checkmate28
CDE Coeur Mining, Haven't bought yet, but I'm carefully watching for the bottom or a confirmation of raising silver.
They probably have the most leverage, and highest sensitivity to raising silver prices of any decent sized producer out there.
Last 2 years they have been successfully revamping the company, including the royalty mining costs and CAPEX and subsequently are in much better position, other then suffering from low commodity prices.
500M MC
Cash 300M
Debt Long 468m
EV Near $670M
PPS dropped from $32 to $5/shr in last 24 mths
For that you get
500M oz AgEq Reserves and
30M oz AgEq annual production
Going to be some story when silver heads back up.
EGZ.v ENZR Energizer Resources Up nearly 100% last week and on fire this AM. My graphite play has always been Energizer. Even though they were behind in time, I've always seen them as the company with the best resource and best chance at big graphite production soon. They are moving through the development process fast. If you link back to my past posts, I compared ENZR to ZEN when everyone was on the ZEN train. While the writers were touting the other graphite plays, I touted ENZR as a better play for the future. Again the size and quality of the resource, plus the simple manufacturing process due to the simple metallurgy.
I thought about selling as mgt has been suspect in being greedy IMO, but again, the size and quality of the resource, plus them having DRA as their technical partner, makes me think they will get to production with low costs and minimal time. All they need is a low cost flotation circuit to get the job done.
Mention of Energizer being the supplier for Teslas new gigabattery plant sparked the recent fire for the shares. Personally, I dont think Tesla will choose ENZR due to logistics, but the Tesla battery plant will use more graphite in one year then the current entire yearly production of all graphite companies combined. This demand will cause all future graphite companies to rise
Info on Tesla/ENZR
http://www.nasdaq.com/press-release/teslas-new-gigaplant-will-double-the-worlds-demand-for-flake-graphite-and-energizer-resources-inc-20140911-00219#ixzz3DNulaqWg
ENZR- Big catalyst going forward will be the Bankable feasibility study due forth quarter. This should further signal to the market the value of the resource.
Secondly if you have not researched graghene, you should as its going to change the world in your lifetime.
The "wonder material" conducts electricity (think computer processor) better than copper and is the toughest material known to man. The 2D material is 200 times stronger, but six times lighter than steel, and is one atom thick.
Another company I own LMR.v Lomiko Metals has a contract out to supply GGG.V Graphene 3D Lab, with the graphene infused material. GGG supposedly has contracts to supply many of the 3D printing companies with Graphene infused material that will allow the 3D printers to print 3D models (parts) that conduct electricity.
I am not advocating buying any of these now, esp without lots of DD as they are all not producing cash yet, plus have all appreciated in share price recently. If you arn't familiar with Graphine, I would research it soon, as it will change your world faster than you think. As for now, Im enjoying the ride.
Checkmate28