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Do you even read posts before replying? No matter how clear I try to be I feel that you will always miss the point.
AR are not idiots they are just myopic at the moment and have different goals because they are a large company navigating uncertain market conditions. Obviously they really care about internal development, cutting costs, and saving a couple hundred grand more than exploration and cheap expansion. Low gold prices were a flimsy excuse to leave since the amounts were modest and the contract had it put out in stages over years. The grades in the known areas are so high that they would be profitable even with low gold prices. High grade is the solution to low prices not a reason to flee.
Mexus will have low costs because they have very high grade ore close to the surface. In the simplest terms possible if other people can make 1 gram work then 1 ounce+ will not just work it will work well. This is why Mexus will be at or below $600 cash cost since most mines have to move 60-100 tonnes to extract an ounce while Mexus needs to move 1 or .5. This is the power of grade and grade drives margin. AR turned this opportunity down and I think it was a mistake but that's just an opinion. AR's board probably thinks it was just a prudent business decision relative to prevailing conditions and the company's other commitments. Mexus was never material for them and even with Burkhart understanding the potential one man and a couple geos cannot overrule the BOD even if they were so inclined.
Realtor I am not sure what are you asking me. I would guess you have way more experience valuing real estate than I do. I don't even know if they (these entities) own lode stock anymore or if this idea makes any sense at the moment. It's something to look into and do your DD and read the filings if you're curious.
They might be undervalued or not, I have no position and don't really care one way or another. It might be a way to get cheap shares or not.
At one point it looked something like this (these numbers are not accurate): 50 M of real estate, a whole bunch of stock, and couple million profit for a market cap of 50 M, valuing the income stream at 0 and marketable securities at 0 (obviously they are worth more than 0).
Geo, JW is a Californian real estate "mogul." Standard MO from what I can tell, wants to become a billionaire at any cost and get into the good parties. 10k/plate environmentalist, save the whales and be publicly hailed a hero while he steps on the little people in style.
http://www.bloomberg.com/research/stocks/people/person.asp?personId=346192&privcapId=280402
I don't know of any boss connection but I have read through several of the lawsuits filed against him over the years. Even when he does things legally (lode financing) it is lawful but not ethical.
All IMO, don't sue me J.
Geo if you're bored check out the other two Winfield companies, PRSI and INTG. I am not up to date but at one point they were both profitable and owned an absurd number of lode shares that were valued at near zero. The one has land, hotel income, and shares IIRC. This is perhaps a better value than lode stock itself since the optionality is still intact but also supported by profits. I haven't done the math in ages but I think for a while there after subtracting their land value their lode shares were selling for less than market.
I don't really like Winfield but the guy is definitely far sighted when it comes to acquiring real estate (and mineral claims). He is also adept at mining shareholders and these entities have long prospered at common lode's expense.
I am not sure how much of the above still applies but it might be worth looking into. Definitely would have preferred to have been an INTG shareholder rather than a lode holder the past few years.
Lode's newer assays are encouraging but their lack of profits are not. Real estate is good but a mine that earns no profits is of dubious value. Hopefully this is about to change.
It rose 40% after falling 98%... A stock could go up 1000% and that has no bearing whatsoever on whether or not it is a scam or a legit company.
At this point Rubicon may get bought out or it may go BK, or maybe, just maybe, they meander along for a year until a recovery takes place. No matter the outcome there is probably better risk and reward elsewhere unless you have some kind of crystal ball or a deep gambling streak.
Rubicon appeared to be in great shape 9 months ago when the cracks first showed and now it is in an absolutely atrocious position. Lawsuits are coming too, I can hear the class action attorneys' slithering getting closer. This stock is going to be very volatile and only nimble traders are likely to enjoy the churn and short term flipping potential.
I agree with you but positions are all relative. By number most of Claude's holders are well under a 100k shares so if someone bought near but not at the low, say a 30 cent average, they still could sell .90 cad for 200% and the spread isn't really much of a factor. $2500 invested would be $7500, not a bad profit % for a pretty rough year for most. What is meaningful is up to the individual and there are millions of folks who would consider even a $5000 windfall to be meaningful. About half of north Americans have no savings let alone stock wealth and lots of Canadians own Claude (and others) in TFSAs, which because of the lack of taxes, encourages small trades and speculating in juniors since they often have a compelling risk/reward to earn large sums of now tax free wealth. If someone bought at .75 and wants to sell .90 that's a different story.
If you wanted to take profits from a stack of millions of shares it could still be done, it just needs lots of staggered/layered sell orders of medium to small amounts done over days/weeks/months. Not ideal but possible. The idea isn't to exit the stock ASAP and destroy the market but to skim a bit of profit. Since the position is so large trimming or hedging it may be a prudent thing to do, even at the cost of future profits, especially if it is hugely in the money.
Some people are myopic while others are far sighted, there is a time for both mindsets to shine and there is no sense being locked into just one when having eyes open can allow you to benefit from both perspectives. Personally I think prudence is the arbiter more than a mindset of being long or short. I have seen a lot of people blinded by this and have been myself on numerous occasions.
Claude should get themselves over 100k oz a year and then declare a modest dividend and then the stock would rise and more folks would hold for income and long term capital gains instead of trading for it. Guidance is low this year, right where it should be. Under-promise and over-deliver.
The stock is up about 350% in the past year and that's plenty for a short term move if you ignore the company's fundamentals (which the market and its participants seem to do often as of late).
At some point it is prudent to take profits. There is nothing worse than having a stock go up 5-10x or more and then ride then it right back to where it started. Junior miners, even producers like Claude, can be very volatile especially if there is news that disrupts production. Such news is always possible, all it takes is a break down, a chemical leak, a resignation, native protest, forest fire, etc for this stock to lose a large portion of its recent gains.
I think we are heading for 2s this year but that doesn't necessarily mean that taking a bit of profit right now is a bad move.
Not much to say on this board lately that hasn't already been said. Claude is kicking ass. Keep it up gents.
8 years of development and they discovered ~20 moz with potential for 40...downgraded to 1 m with potential for 3M...downgraded to a hundred k? WOW. Hundreds of millions of dollars raised and spent. I should have followed McEwen when he left years ago. Hindsight is 20/20 but anyone trying to explain to me even a year ago how Ruby would be at 3 cents when they are going into production I would have just laughed.
At this point Rubicon is worth 19 M CAD and they have 22 M cash...wow. Half of Red Lake (one of the best districts in the world) is now worth negative money? Madness.
Grades down 20-30% and resources down 91%? Delisted? Ouch.
Well if an MM did have it at .0004 (they don't, extra zero there) their 165000 shares at that price point are exhausted when 165000 have been bought or sold, but that only assumes there is one MM (there are many) and one buyer/seller (there are many) and nothing else is happening. So what is more likely to happen is a layer of bids and asks that change based on the trading action of the day.
So 165k MM1 .0005 ask(mm willing to sell) and .0004 bid and mm 100k willing to buy.
Someone purchases 25k shares at ask. (This may cause the MM to short 25k on their internal ledger, more or less, taking the opposite end of the trade. They will balance this later over the course of days or weeks usually.)
Now mm1 has 140k for sale at 0.0005 but only for a second, since that buy has triggered the MM's algo to raise the asking price. The price could stay as it is or rise, but several small buys in a row can likely significantly raise the price. So the 165k shares were "sold out" by a mere 25k, now the MM and the others will change, raising and lower prices depending on what is going on. Maybe news comes in and investors and traders add their own buy and sell orders to the mix. So maybe the shares are sold out quick or maybe they double down, going increasingly short as others go long.
So after that buy maybe there is 100k for sale at 0.00055 and the bid has probably risen to 0.0005. This is why one person can't raise the price to a dime or whatever without huge volume and many purchases that break through thin layers of asking prices by multiple MMs. These prices are malleable.
Also I will point out again that MM's stay neutral (net long/short over the long haul) and care only about profiting via the spread. The type or fundamentals of the company are irrelevant. MM's are one of the most common boogiemen and scapegoats on these boards. The truth is when buys significantly outnumber the sells the stock will rise and when the opposite is true it will fall. If the volume is low we will bounce around with exaggerated moves. MMs do play games but performance, time, and progress trumps games every time.
Clean TeQ's Resin-In-Pulp pilot plant for scandium extraction on Clean TeQ's Syerston ore in action.
You sent Don and I an insulting message on a public forum, not the other way around. There is a preview button for a reason. If you insult people and then delete the message it doesn't magically remove the insult, it actually doesn't even count as an apology in polite circles. You even wrote "Do not delete this post" as if you really stood by it only to edit it yourself later into a completely different but still ridiculous message.
I realize you're frustrated, and that is not an uncommon feeling ATM. If it makes you (or anyone) sleep better you can blame me for 100% of your losses. You were forced into Mexus at gunpoint after all.
Our zero dollars is estimated to last approximately zero days.
Already down another 53% this morning - ouch. This is the double edged sword of a penny stock, there is no real ceiling in a bull and no real floor for the stock price with bad news in a bear market.
Mexus is now worth under $2 million. I think the Julio claims are worth more than that alone but it will be volatile for a while here over the Christmas season as people continue to digest the recent news, do gut checks, tax selling, and new estimates of what year could bring material production, etc.
Recent events are quite unfortunate. The only comparable experience I have was when Rubicon spent a bunch of money doing a bulk sample to once and for all reconcile their grades. They played it up as very important (it was, since it should be more representative of the deposit than narrow drilling) and then they did the sample in the middle of nowhere and so the results were bad and the stock tanked. It made no sense to me at the time - it wasn't representative of the actual mine at all, just like the recent Mexus assays and the subsequent determination.
The lower the share-price the greater our risk for excessive dilution. We have no cash and are in poor condition so rates will bad Typenex style. I don't even want to imagine what price a PP would take today.
Mexus' geological fundamentals are still sound. There is obviously a lot of economic gold there that can easily pay for a few mistakes and delays. Yet will it be enough to pay for the tears and ulcer medications of Mexus shareholders? I still think so, although my optimism is temporarily blunted. Mexus is still an attractive high grade mine and JV partner.
Yeah it is an average...of the intercept. It isn't like they hit half an oz/t and then nothing in the remainder and averaged it out to a deceptively low number.
http://www.globenewswire.com/Tracker?data=Fi99UW7sW_e83UZEQKX9xU6qnYxiT6lRCgwv1U3Xv6ulToFILIQwafi8ibX6CKEUM5s77YBu6ufruv_c_UOBQzLzPqZZG5IXJZQgmdFB9l0pZoAI26tk8Nbsz4UJhpfnp--kwjoFH1XpdBaNJy1oINEzb-fhqLfA8o7xRfJbc0U=
None of these assays change anything about the high grade nature of Mexus or the ultimate success of a small heap and UG operation in the known productive areas. It would have been nice if the entire property is mineralized from the surface down with high grade, but that isn't realistic and perhaps there is less low hanging fruit than previously thought.
AR expert GEOs are less effective than amateur prospectors? That is amazing to me.
I find it genuinely strange the way they did this though. Why not drill 1 hole down the Julio hanging wall and one through Ceasar's heap zone? 2/16 holes and no rational person would give up the option even if the other assays were zero. If they would have instead of a "there's nothing here, the end," sort of vague, anticlimactic whimper we'd be on to phase 2. As a Mex/AR shareholder I think both companies got screwed here.
Definitely not the news I was expecting. My honest evaluation is that these assays are not good and are the main reason Argonaut bailed along with market conditions. 1ppm = 1g/t so we barely came up with half of that meaning it is not materially better than what AR is currently mining. Results are well below expectations.
AR wanted big swathes of high grade near the surface for leaching and with 16 holes found nothing but small amounts of low grade. The grades were very poor along with intercept lengths, very narrow stuff. They want a low cost heap that can operate for many years while Mexus' high grade leachable ore they already discovered isn't enough for sustained multi year 6 figure production without new discovery.
With sorrow I revoke my sub-penny prediction - all bets are off in the short term until the dust settles.
I was expecting something more like this:
"November 12, 2015
Vancouver, BC - Timmins Gold Corp. (TSX: TMM, NYSE MKT: TGD) (“Timmins Gold” or the “Company”) is pleased to announce results from a recent drill program at its Ana Paula project located in the Guerrero Gold Belt, in the State of Guerrero, México. The drill program was carried out to: (i) confirm previous drilling; (ii) obtain metallurgical samples; and (iii) carry out select infill drilling. The drill program consisted of 2,000 meters in 10 core holes.
Select significant mineral intercepts measured downhole from the 1,400 meters of infill drilling in seven core holes include:
25.30 meters of 2.67 g/t Au at 13 meters downhole and 9.85 meters of 6.93 g/t Au at 53 meters downhole in hole AP-15-233
122.25 meters of 4.45 g/t Au at 80 meters downhole and 22.50 meters of 1.49 g/t Au at 215 m downhole and 29.00 meters of 2.86 g/t Au at 255m downhole in hole AP-15-236
33.00 meters of 2.98 g/t Au at 50 m downhole, 23.85 meters of 3.73 g/t Au at 171m downhole and 42.75 meters of 2.16 g/t Au at 207 meters downhole in hole AP-15-237
87.80 meters of 7.14 g/t Au at 62 meters downhole and 49.50 meters of 1.34 g/t Au at 178 meters downhole in hole AP-15-239
Select significant mineral intercepts from the twin-hole drilling include:
97.62 meters of 4.64 g/t Au in hole APM-15-01, at 20 meters downhole;
95.15 meters of 5.14 g/t Au in hole APM-15-02, at 141 meters downhole;
200.35 meters of 8.33 g/t Au in hole APM-15-03, at 0 meters downhole. This hole is a twin hole of hole AP-11-37 drilled in 2011 which intercepted 198.45 meters of 8.379 g/t Au at 3.05 meters downhole.
The results from the confirmation drilling were consistent with those from previous programs. Additionally, the infill drilling results were very encouraging, as they continue to display Ana Paula’s high-grade gold mineralization and allow for a greater understanding of the deposit.
The samples will be sent for metallurgical testing which is expected to be completed in early 2016. The metallurgical results will be part of a Feasibility Study which the Company is scheduling for completion in the middle of 2016. "
It should be noted the market didn't like Timmin's results either and they are many standard deviations better than our initial assays. If ours were similar I guarantee there would be a phase 2.
Looks like we are back to looking for a partner or going it alone, and placing the known high grade zones into production.
I am genuinely surprised they bailed so early though... definitely won't do much for short term optimism. Will definitely be selling my AR shares, Mexus is still in the hold for better days category.
Like 8 said all we have to do is exceed what they are currently mining and what they have in their pipeline. They are doing quite well with deep .3 and .4 gram stuff so it is quite obvious if they hit some good intercepts of something greater they will be very pleased and push for development and a larger follow up program. It is all relative, so if they hit 1 gram they would be happy; if it's 2 or 3 they would be ecstatic as that represents many multiples of what they are currently mining and sits near surface. At anything in size over 1.5 grams they can't lose. If they duplicate Mexus' old assays or discover anything in the hot spots...well let's just say the Julio property will soon be showing up in AR slideshows. If (when) they hit ounces per tonne... fire up the local laundries.
For some reason the market as a whole seems to have made some assumptions like: Argo will not be able to duplicate or better Mexus own results. I find this very hard to believe given their resources and expertise at hand and given the already known results and the success of amateur prospectors. The truth is AR will probably find a lot of gold and they most likely already have.
“I’m extremely confident that Argonaut’s drill results will confirm what our own geologists had found. These initial drill results should be released later this quarter and I fully expect Argonaut to exercise its extension of the option into next year. Our company has a great partner to move forward with and we are just beginning to unlock the true value of this property and others that we control,” said Paul Thompson.
Mr. Thompson closed, “I think history will show that the current share price is extremely undervalued. My hope is that this news and future press releases will allow everyone to see what the true value of this company is.”
P.S.
Rick Rule :
http://www.bnn.ca/Video/player.aspx?vid=749130
Best moment: "That can't be true!"
http://www.bnn.ca/Video/player.aspx?vid=741019 mentions AR hereabout 15 min in. Rick is aware of but not familiar with Mexus, since I told him about it around 10 cents before it went on its little run years back. He loves royalties and streams, I am not sure if he is up to date on the connection with AR. He doesn't see much reason to own AR, since it is a healthy producing company, (not something Sprott would usually finance) yet Mexus may very well be that catalyst that gets them out of their own rut. Nothing like a major discovery to raise shareholder morale and share-price.
Awesome stock with 20% of a soon to be best in class mine for sale for 1 cent?
"That can't be true!"
It won't be for long.
Interesting. I was just about to dip a toe in the water too. Good call on St. Andrew, Geo. I'll probably wait and then do some math on the combined company.
Looks like some super high grade but narrow vein stuff. 53.83 opt is pretty darn high even if it is less than a meter width.
Some thoughts from some smart folks:
Rule:
http://cms.sprottglobal.com/thoughts/articles/rick-rule-market-chaos-creates-opportunities/
Hamilton:
http://www.zealllc.com/2015/absgslev2.htm
McEwen:
http://www.thestreet.com/story/13359826/1/no-one-paying-attention-to-the-gold-price--rob-mcewen-chairman-mcewen-mining.html?puc=yahoo&cm_ven=YAHOO
As far as I know they would use standard aluminum welding techniques only to a much greater effect. The Sc alloy has greater plasticity and weld strength. I would guess that abundant scandium would make welding aluminum a more common practice since I know it is a finicky metal to work with.
http://www.lincolnelectric.com/en-us/support/welding-how-to/Pages/guide-aluminum-welding-detail.aspx
As for rolling out a large amount of scandium aluminum alloy I doubt they (aluminum manufacturers) need large scale modifications since the machinery I've seen looks really heavy duty. The rollers are huge and the material would only get thinner to meet the same strength requirements.
Is Rubicon crossing the Rubicon?
The idiom "Crossing the Rubicon" means to pass a point of no return, and refers to Julius Caesar's army's crossing of the Rubicon River in 49 BC, which was considered an act of insurrection and treason. Julius Caesar uttered the famous phrase "alea iacta est"—the die is cast—as his army marched through the shallow river.
https://en.wikipedia.org/wiki/Crossing_the_Rubicon
If I were GG now is the time to pounce. No other comments aside to say "not good." Their initial grades were only 4% higher than reported and going back into hibernation after spending so much money to get to where they are now is not good news. They laid off 90% of their staff and only have 23 million left... I can hear the Goldcorp vulture wings a flappin' on the breeze.
Rubicon under 20 cents - never thought I would see that one.
This is a reason why it is prudent to diversify amongst juniors because even the strongest companies and deposits, can under many circumstances, still fail or perform poorly.
"What's in a name? that which we call a rose
By any other name would smell as sweet;"
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=115480238
Sail,
I like Hamilton and agree with the vast majority of what he writes. I agree the industry as a whole has no problem with $1000 gold or less, as there are many low cost mines out there and the whole industry is flexible. The notion that sub $1k would destroy all the mines is absurd. In Mexico they are profitably mining fractions of what lode is for some nice margins. The sector isn't at risk, just the companies with high AISC.
http://www.mining.com/web/gold-miners-1200-cost-fallacy/
I actually have no comment aside to say I agree and that I think Adam is a sharp guy. There is a lot of false dichotomies and dilemmas in the investing and speculating world and it is handy to have help to cut a few of them away.
If you didn't read this one from this summer it is also must read:
http://www.zealllc.com/2015/absgslev.htm
Comstock Mining Announces Third Quarter 2015 Results
Simplifies Capital Structure, Lowers Obligations and Accelerates Development
Virginia City, NV (October 22, 2015) Comstock Mining Inc. (the “Company”) (NYSE MKT: LODE) today announced selected unaudited financial results for the fiscal quarter ended September 30, 2015.
Strategic Highlights
Restructured and simplified the overall capital structure, eliminating all preferred stock, special rights and PIK dividends and permanently reducing land obligations and royalties.
Permitted, commenced and advanced the Lucerne underground “Harris” portal and drilling.
Encountered significant high-grade gold and silver intercepts in the Dayton Drill Program.
Received the “Nevada Excellence in Mine Reclamation” for Keystone mine restoration.
Recognized, along with the Comstock Foundation for History & Culture for “Outstanding Rehabilitation of the Historic Upper Yellow Jacket Hoist Works.”
Achieved year-over-year cost savings of $6.7 million for the nine months ended September 30, 2015, and, coupled with the recently completed restructuring activities, remain on track to save $10 million for the full year 2015, as compared to full year 2014.
Partnered with American Mine and Tunneling LLC and American Drilling Corp, LLC to commence key underground development and drilling access to the PQ and Woodville structures.
Strengthened the balance sheet, raising $6 million for the drilling and development of the Lucerne underground program, and prerequisite planning for the next phase of Dayton drilling.
Selected Financial Highlights - Nine-months Ended September 30, 2015
Mining revenue was $15.7 million for the nine months ended September 30, 2015, as compared to $18.1 million for the same period in 2014, a decrease of 13%, resulting from lower average price per ounce of gold realized and lower production.
Costs applicable to mining revenue were $10.4 million for the nine months ended September 30, 2015, as compared to $14.6 million, net of silver credits, for the same period in 2014, a decrease of 29%, primarily due to mining cost reductions, resulting in a gross margin of 34%.
General and administrative expenses were $5.1 million for the nine months ended September 30, 2015, as compared to $5.2 million for the same period in 2014, a decrease of 2%.
Net loss was $4.5 million, for the nine months ended September 30, 2015, as compared to a net loss of $8.3 million, for the same period in 2014. The $3.7 million improvement resulted primarily from $4.0 million in lower mining and operating costs offset by higher exploration and development for Lucerne and Dayton, SR-342 realignment, severance and lower revenues.
Net cash generated by operating activities was $0.4 million for the nine months ended September 30, 2015, as compared to a net cash use of $2.6 million in 2014, a 117% improvement.
Excluding the road realignment cost of $1.7 million, net cash generated by operating activities was $2.1 million for the nine months ended September 30, 2015.
Net cash used for investing was $4.8 million for the nine months ended September 30, 2015, including $2.8 million for land and $1.9 million for property, primarily for leach pad expansions.
Debt and capital lease obligations totaled $15.8 million at September 30, 2015, including $2.8 million outstanding on the revolving credit facility.
Cash and cash equivalents at September 30, 2015 were $2.5 million.
Selected Financial Highlights - Three-months Ended September 30, 2015
Mining revenue was $4.3 million in Q3 2015 as compared to $6.5 million in Q3 2014. The decrease resulted from lower average price per ounce of gold realized and lower production.
Costs applicable to mining revenue were $3.5 million in Q3 2015, as compared to $4.4 million, net of silver credits, in Q3 2014, a 21% decrease primarily due to mining cost reductions.
Mine claims and costs decreased by $0.4 million in Q3 2015, as compared to Q3 2014.
Exploration and mine development costs increased by approximately $0.7 million in Q3 2015, as compared to Q3 2014. The increase is for the underground drift-mining and drilling for the first geological target (“PQ target”) in Lucerne and for the recent Dayton drilling program.
Net loss was $4.3 million, for Q3 2015, as compared to a net loss of $1.0 million, for Q3 2014. The $3.3 million increase resulted from a $2.4 million decrease in revenue and a $0.7 million decrease in net other income, offset by a net increase in all other costs, including the SR-342 road realignment and Lucerne and Dayton exploration and development costs.
Net cash generated by operating activities was $0.1 million for Q3 2015.
Excluding the road realignment cost of $0.8 million, net operating cash generated for Q3 2015, was $0.9 million.
Third Quarter and Year to Date 2015 Selected Operational Highlights
3Q 2015 2Q 2015 1Q 2015 YTD 2015 3Q 2014 2Q 2014 1Q 2014 YTD 2014
Mining Operations
Tons Mined 140,415 254,856 316,199 711,470 1,131,985 944,166 947,852 3,024,003
Processing
Tons Crushed 104,286 211,942 157,612 473,840 191,013 122,026 205,686 518,725
Weighted Average Grade Per Ton Au 0.021 0.030 0.039 0.031 0.026 0.034 0.024 0.027
Weighted Average Grade Per Ton Ag 0.573 0.654 0.734 0.663 0.564 0.546 0.345 0.473
Estimated Au Ounces Stacked 2,240 6,438 6,083 14,761 4,926 4,191 5,016 14,133
Estimated Ag Ounces Stacked 59,717 138,639 115,689 314,045 107,822 66,607 70,989 245,418
Estimated Au Equivalent* Ounces Stacked 3,034 8,344 7,669 19,047 6,584 5,205 6,140 17,929
Au Ounces Poured and Sold 3,847 4,575 4,695 13,117 5,002 4,763 4,507 14,272
Ag Ounces Poured and Sold 62,480 60,112 56,482 179,074 61,096 48,626 49,358 159,080
Au Equivalent* Ounces Poured 4,678 5,400 5,470 15,548 5,936 5,499 5,290 16,725
* Au Equivalent ounces = Au ounces (actual) + (Ag ounces (actual) ÷ the ratio of average gold to silver prices) 75.27 72.73 72.91 73.63 65.03 65.69 63.14 64.62
Nine-months ended September 30, 2015
Metallurgical yields improved to 81%, from an average of 77% in the first nine months of 2014.
Weighted average gold grades improved 15%, to 0.031 opt, from 0.027 opt in the first nine months of 2014. The Company sold 13,117 ounces of gold in the first nine months of 2015.
Weighted average silver grades improved 40%, to 0.663 opt, from 0.473 opt in the first nine months of 2014. The Company sold 179,074 ounces of silver in the nine months of 2015.
Silver to gold production exceeded a 13:1 ratio, from 11:1 in the first nine months of 2014.
Strip ratio improved to 0.35:1 for Q3 2015, down from the full year 2014 average of 4.8:1.
Three-months ended September 30, 2015
Metallurgical yields have sustained at 81% throughout 2015.
Weighted average gold grades decreased to 0.021 from 0.026 opt in Q3 2014.
Weighted average silver grades improved 2%, to 0.573 opt, from 0.564 opt in Q3 2014.
Silver to gold production exceeded a 16:1 ratio, from 12:1 in Q3 2014.
Corrado De Gasperis, President & CEO, commented, “The achievements this year have been foundational, expanding our lands and all major permits, achieving low cost production by improving every major variable from grade to yields to strip ratios to fundamental cost and project management. We are well into the transition with the underground drift now reaching 500 feet and the fourth drill station under development and we are looking forward to testing some high-grade material on the leach pad as early as this (fourth) quarter.”
Production
Metal pours totaled 3,847 ounces of gold and 62,480 ounces of silver, during the third quarter of 2015. The Company crushed and stacked approximately 104,000 dry tons of mineralized material, delivering 2,240 estimated ounces of recoverable gold and 59,717 estimated ounces of recoverable silver to the leach pads with weighted average gold grades of 0.021 ounces per ton.
For the nine-month period ended September 30, 2015, the Company realized an average sales price of $1,212.03 per ounce of gold and $15.96 per ounce of silver. In comparison, commodity market prices in the same period of 2015 averaged $1,178.69 per ounce of gold and $16.02 per ounce of silver.
For the quarter ended September 30, 2015, the Company realized an average sales price of $1,116.44 per ounce of gold and $14.83 per ounce of silver. In comparison, commodity market prices in the third quarter of 2015 averaged $1,124.01 per ounce of gold and $14.93 per ounce of silver.
Operating Costs and Cost Reductions
During the three months ended September 30, 2015, actual Lucerne Mine costs applicable to mining revenue were approximately $4.4 million ($3.5 million net of silver by-product credits) as compared to $5.5 million ($4.4 million net of silver by-product credits) for the three months ended September 30, 2014, representing a 21% reduction of net costs applicable to mining revenue.
During the first nine months of 2015, actual Lucerne Mine costs applicable to mining revenue were $13.2 million ($10.4 million net of silver by-product credits) as compared to $17.8 million ($14.6 million net of silver by-product credits) for the first nine months of 2014, representing a 25% reduction in costs applicable to mining when comparing the first nine months of 2015 to the same period of 2014. These costs applicable to mining revenue for the first nine months of 2015 and 2014 also include depreciation of $4.6 million and $3.9 million, respectively.
During the first nine months of 2015, the Company continued reducing costs applicable to mining revenue, targeting $7 million in reductions this year as compared to 2014. The Company has already realized $4.2 million of savings from reduced labor, drilling, and blasting and fuel and $1.7 million of cost reductions in non-mining activities in the first nine months of 2015, as compared to the same period in 2014. The Company has also identified $3.0 million of potential cost reductions in all other non-mining activities, including general, administrative, and environmental areas. The Company incurred approximately $0.7 million in severance costs during the first nine months of 2015, in mining and general and administrative expenses, associated with organizational cost reductions. The Company is on track to achieve its stated costs savings target.
SR-342 Realignment and Extraction of Existing Mine Dumps
In early February, the Nevada Department of Transportation, (NDOT), closed an approximate two-mile section of SR-342, south of Gold Hill, as a safety precaution following roadway cracking and area specific sinking during a weekend of heavy rains.
The realignment project has two major phases. Phase 1 of the project, realigning a portion of the state route away from the historic Silver Hill Shaft and permanently capping that historic shaft was completed on June 1, 2015, about one week ahead of the original schedule.
Phase 2 of the project, realigns the remaining portion of the road, removes additional loose dump fill and related material on the east side of the roadway and ties back into the south end of the newly constructed (Phase 1) alignment. The latter part of Phase 2 also includes plans for a restoration and stabilized storm water flow, post construction. The project is scheduled for early completion in November 2015, with an estimated remaining cost of approximately $1 million.
In addition, during the latter part of 2014, the geological and environmental teams undertook a systematic evaluation of historic mine dumps throughout most of the central part of the District. Overall, we identified approximately 640,000 tons of mineralized dump materials. Of that total, approximately 450,000 tons were located underneath and to the east of State Route 342, with an average grade between 0.025-0.035 opt Au. These tons are being extracted as part of the SR-342 re-alignment, and stacked onto the leach pad for processing providing a significant environmental remediation and a meaningful contribution to operations and production schedule.
Lucerne Exploration and Underground Development
The Company completed extensive geological development and modeling, including analysis of surface drill hole results, metallurgy, proximity to the current Lucerne Mine floor, and past mining data. This resulted in highly detailed geologic level plans and cross sectional analysis for the Lucerne East-side. The work confirmed that the lode is comprised of a group of northwest trending, sub-parallel, higher-grade, mineralized structures, rather than a simple vein system confined to a single fault zone. These structural groups coalesce into a single zone in the central part of the East-side area and diverge to the north and south to create zones up to 600-feet wide. The Company also discovered dike-like masses of quartz porphyry (PQ) that have intruded into the main lode and have a direct relationship to the known mineralization.
Out of this extensive geologic work, a definitive underground exploration and development target emerged, specifically that part of the lode occupied by the mineralized mass of PQ, as well as the neighboring structures.
In addition to the mineralized mass of PQ, we developed and defined the nearby Woodville Bonanza structures with the same diligent level plan and cross sectional development. These geologic definitions include the same detail and historical mappings plus over 116 intercepts of at least 10 feet grading over 0.22 ounces per ton gold and 1.59 ounces of silver per ton.
The Company, on September 5, 2015, commenced developing a new underground access to the PQ structures and the almost adjacent Woodville Bonanza structures. The first phase of the tunnel development, with a planned investment of $3 million, is expected to be approximately 800 feet, running parallel to the PQ target. Development of the tunnel is progressing on schedule, reaching a linear distance of approximately 300 feet at September 30, 2015.
This phase includes approximately 20,000 feet of diamond-core definition drilling and is scheduled for completion before year-end. Previously disclosed drill data from the PQ includes 46 intercepts of at least 10 feet that grade, on average, over 0.23 ounces of gold per ton and over 1.71 ounces of silver per ton. Construction of the first drill platform was completed and the underground drilling of the previously discovered, dike-like masses of quartz porphyry (PQ), commenced. The objective of the program is to establish longer, higher-grade mine lives, with the ability to grow production from multiple mine sources, including both the PQ and the Woodville.
Dayton Drill Program
Surface drilling on the Company’s Dayton property, located in the southern part of the Comstock district, commenced in the first quarter of 2015. The program consisted of 408 holes totaling 30,818 feet of drilling that was completed in late September of 2015. The Company used an extremely efficient percussion drill rig, with total program costs of about $200,000, or about $6.50 per foot.
The Company also completed underground mapping and sampling from a number of historic mine tunnels. This work, together with the drilling, resulted in several important discoveries, including defining multiple, previously undefined mineralized zones and additional dike-like masses of quartz porphyry, similar to Lucerne.
The main objective of the program was to pinpoint the major surface structures (faults) and then explore these structures for mineralization. This then enabled efficient infill drilling that further refined and resolved areas of structural complexity in the geologic models. The program was successful in both defining and expanding the near-surface mineralization. The Company will update its geologic model based on the results of this drilling program and increase the gold and silver resource estimate. The Company is now finalizing a comprehensive drill program designed to deliver a mine plan, economic reserves and mine life.
Of the 408 holes drilled, 245 contained intercepts of 10 feet or more in length with gold grades exceeding or equal to 0.015 ounces per ton (opt.), and with an overall weighted average grade of 0.035 opt Au and 0.323 opt Ag. Out of those same 245 holes, a total of 32 contained intercepts of 10 feet or more in length with an average Au grade exceeding or equal to 0.100 opt Au., and with an overall average weighted grade of 0.148 opt Au and 0.694 opt Ag.
The underground mapping and sampling effort, together with the drilling, resulted in several important discoveries. The most significant was defining mineralization along a previously undrilled, 600-foot segment of the Grizzly Hill Fault and additional mineralization at an intersection of the Grizzly Hill and Alhambra Faults with the Silver City fault. The Company also discovered additional dike-like masses of quartz porphyry, similar to Lucerne, that generally host significant mineralization. Finally, the drilling also helped to define extended mineralization along a 550-foot segment of the Mill Fault.
The Company also commenced metallurgical test-work on representative samples of mineralized rock types. The Company also commenced standard column tests on five surface-generated samples and one underground sample. These tests are ongoing. All samples, both from drilling and underground, were analyzed for gold and silver at the Company’s existing, on-site, industry standard, production assay lab. Ultimately, the objectives are the same as Lucerne, to establish longer, higher-grade mine lives, with the ability to grow production with yet another mine source.
The Dayton property includes the Dayton (Marble), Alhambra, Kossuth, Metropolitan and Gennessee patents representing a structurally controlled mineralized system hosted in tertiary volcanic rocks that, in terms of the overall geologic setting, is similar to the Company's Lucerne property. The properties are separated by approximately one mile along the Silver City branch of the Comstock Lode.
Corporate
Cash and cash equivalents on hand at September 30, 2015 totaled $2.5 million. Total debt and capital lease obligations at September 30, 2015, were $15.8 million as compared to $12.2 million at September 30, 2014. For the remainder of 2015, the Company plans on spending approximately $1.0 million in road and capital expenditures and approximately $1.4 million on the underground drift, drilling and some infrastructural development for the Lucerne underground mine plan development advancement. The Company also plans to pay down an additional $3.0 million in debt obligations, including $1.2 million on its revolving credit facility.
As announced on August 27, 2015, the Company successfully completed a restructuring of certain components of its capital structure, primarily associated with all series of its issued and outstanding Convertible Preferred Stock and certain obligations associated with the Northern Comstock joint venture associated with some its most important land holdings. The Company successfully converted all of its preferred stock to common stock, eliminating the preferred stock, eliminating the special rights of the preferred stock holders, including extra voting rights, and eliminating future dividends associated with those instruments. The Company also materially reduced future capital and royalty obligations associated with some of its highest prospective mineralized land claims contained in the Northern Comstock joint venture, from $31.05 million down to $9.75 million. These actions will also contribute to cost reduction efforts for 2015.
On October 19 2015, the Company issued 10,169,492 shares of common stock to investors at a price per share of $0.59. As a result of the offering, the Company received net cash proceeds of approximately $5.9 million.
Shares of Common Stock issued and outstanding at September 30, 2015 were 149,748,219.
Outlook
The Company has been cash flow positive from operations for the first nine months of 2015, and expects to be cash positive from operations for the full year 2015, notwithstanding weaker revenues in fourth quarter as the Company transitions from the final phase of surface mining in Lucerne to the expansion into an underground portal and drift development in Lucerne. The Company is concurrently completing the road realignment during fourth quarter.
The Company commenced the underground drift-mining and drilling, associated with the first underground exploration phase of the PQ target, in September 2015, and expects to complete drift-sampling, drilling and ongoing metallurgical test work of the PQ target by December 2015. The second major phase of drift-mining and drilling, currently planned for the Woodville target, is expected to be completed by April 2016.
The Company's goals for this year included minimizing operating and capital costs, including the elimination of legacy royalties and dividends, restructuring and simplifying the capital structure, eliminating and reducing certain liabilities, completing the SR-342 realignment project, currently scheduled for completion in November 2015, expanding the Lucerne exploration and development activities, primarily through the underground portal and drift development and commencing the final development phase of the Dayton Resource Area.
Mr. De Gasperis concluded, “With all the excitement around drilling the quartz porphyry mass at the Lucerne portal, we were thrilled at the magnitude of these same quartz porphyry-type discoveries in Dayton. These new discoveries have accelerated our preparation for developing these remarkable gold and silver resources into a second mine. Both phases of Lucerne and Dayton represent remarkable exploration and development opportunities with the objective of establishing long-lived mines and higher grade reserves for mining.”
- See more at: http://comstockmining.com/news/press-releases#sthash.z3ezsrLR.dpuf
Conference Call should be here shortly: http://comstockmining.com/investors/investor-library
Yeah they would have saved another $1.7 million for the road according to the PR. They did lower their mining costs along with their grade so if it goes back up to where they were earlier in the year and they have no more surprises like the road issue they are very close to turning their first profit but they still aren't there yet. Every quarter or two I think they just need another quarter or two to turn the corner but I haven't seen it yet. Lode has been on the borderline for a long time. Like with Claude and others earning profits here will be a game changer if/when it happens.
Some other recent Sonora JV's to compare.
Riverside Signs Option Agreement With Centerra Gold Inc. for Tajitos Gold Project in Sonora, Mexico
https://ca.finance.yahoo.com/news/riverside-signs-option-agreement-centerra-120000617.html
Riverside Centerra:
Date Exploration Expenditures
By April 30, 2016 Expenditure of not less than $250,000
By December 31, 2016 Additional Expenditure of not less than $500,000
By December 31, 2017 Additional Expenditure of not less than $1,250,000
By December 31, 2018 Additional Expenditure of not less than $1,750,000
By December 31, 2019 Additional Expenditure of not less than $2,250,000
All amounts in US dollars
Riverside's President and CEO, John-Mark Staude, stated: "Riverside Resources believes in the potential for finding new large gold discoveries in Sonora like the Herradura Mine of Fresnillo, San Francisco Mine of Timmins Gold and Chanate Mine of Alamos Gold. Our Tajitos project has the geologic features and near surface gold indicators similar to those found at and around these nearby gold mining operations. We are delighted to have a strong mine production partner like Centerra Gold Inc. stepping into a new jurisdiction and working with Riverside on this high quality gold property. Riverside looks forward to rapid exploration progress including trenching, detailed channel sampling and moving through preparations ahead of drill testing in 2016. We continue to have a strong cash position, no debt and partners funding projects that Riverside controls thus progressing and de-risking the assets for our stakeholders."
Additional details: The initial $250,000 in exploration expenditures is a firm commitment ("Mandatory Payment") and must be incurred by April 30, 2016. At such time as Centerra exercises the Option, the parties will form a Joint Venture to advance the Tajitos Gold Project with initial participating interests of Centerra and Riverside at 70% and 30% respectively. Should a party elect not to participate in a work program a standard straight-line dilution formula will apply. Dilution to a 10% joint venture interest will result in the diluted party's interest being converted to a 2.5% net smelter royalty (NSR), with the other party having the right to purchase 1% of the NSR for $2,000,000 within three (3) years of conversion.
Kootenay Announces Cervantes Project Optioned to Aztec Metals (ATZEK?)
https://ca.finance.yahoo.com/news/kootenay-announces-cervantes-project-optioned-130000222.html
VANCOUVER, Oct. 13, 2015 /CNW/ - Kootenay Silver Inc. (TSX VENTURE: KTN.V) ("Kootenay" or the "Company") is pleased to announce that it has optioned its Cervantes Gold/Copper project located in Sonora, Mexico to Aztec Metals Corp. ("Aztec"). Cervantes is a Gold/Copper Porphyry prospect located approximately 50 km northeast of the Company's Promontorio Silver resource in Sonora, Mexico, which based on geologic observations, the Company believes has potential for hosting leachable gold resources. The project is the result of Kootenay's generative program and was staked through its wholly owned Mexican subsidiary, Minera J.M. ("MJM").
States Kootenay President and CEO James McDonald, "We are very pleased to enter into an option agreement with Aztec Metals on our Cervantes Gold/Silver prospect in Sonora, Mexico. The agreement with Aztec represents our third successful option agreement in the past 12 months of our generative program. The agreement serves as a strong compliment to our previously announced option agreements over this same period, including optioning the Silver Fox property to the major copper mining company Antafogasta and the San Diego property to Alamos Gold. As we continue to advance our top priority La Negra silver discovery in Sonora, Mexico, our success finding and leveraging exciting new projects adds significantly to the intrinsic value in Kootenay, while providing maximum exposure to new discoveries and minimal share dilution through our generative program.
The terms of the agreement allow Aztec to earn a 65% interest by spending an aggregate total US$1.5 million in exploration expenditures over 4 years (by July 25, 2019), to pay an aggregate total of US$150,000 in staged payments to the Company by July 25, 2019 and issue an aggregated total of 1,000,000 common shares of Aztec in staged payments on each anniversary with the final issuance payable 60 days after the fourth anniversary of July 25, 2019. Aztec will also be responsible for annual Mexican assessment work and mining concession taxes during the term of the agreement.
Upon earning the initial 65% interest and within 60 days of such date, Aztec will have the right to elect and acquire the remaining 35% interest by completing a preliminary economic assessment report ("Scoping Study") by the fifth anniversary date (July 25, 2020), paying US$5.00 per gold or gold equivalent ounce of estimated recoverable, payable gold or gold equivalent ounce of the contained metal for the measured, indicated and inferred resources based on the Scoping Study. On acquisition by Aztec of 100% interest, Kootenay will receive a 2.5% net smelter royalty. If Aztec decide not to exercise the Second Option in order to acquire the remaining 35%, a joint venture will be formed to further develop the project. If at anytime during the process of exploration and/or development after the completion of the Scoping Study and before the completion of a feasibility study or production decision, an additional resource is delineated on the property Aztec shall have the right to acquire the remaining 35% interest under the same terms of acquiring the initial resource outlined previously.
They want to renegotiate a 12 year contract from 2013 by blocking the road? Whether its natives or ejidos or whatever locals they clearly want a bigger bribe. The problem is if they give in and up the bribes then that leads to more renegotiations and more bribes and encourages more mining blockades and undermines the project's economics and future. It also ensures they will be right back at it and demand an even larger bribe when gold prices rise.
I won't get into politics here but I always face-palm when certain groups get enough free money to live like kings yet live in complete squalor and do everything in their power to block projects that would employ them all with six figure jobs. Instead they block roads and demand more bribes.
I have no qualms calling it a bribe because that is exactly what it is. Bribes are standard operating practice for some of the largest companies on earth.
Even Walmart bribes the Mexican authorities:
http://www.nytimes.com/2012/04/22/business/at-wal-mart-in-mexico-a-bribe-inquiry-silenced.html?pagewanted=all
GE, Pfizer, J and J, Halliburton, Siemens etc all well known for bribery, some spending BILLIONS on bribes. Once you get into the resource industry bribery is so common that is completely unremarkable.
"We want to mine here, so here's a school, a hospital, and some jobs. Please don't attack us and waste our time and money."
Then the other side goes: "even blocking a road or complaining a little bit will cost you lots of money, its far cheaper to leave us esteemed local leaders a briefcase to display mutual good will."
I am glad we don't have to deal with this.
Cash and cash equivalents as of September 30, 2015 were only $2.5 million, which is why they raised more money. Even with the new raise another one within six months is quite likely. Stage 1 UG will cost just under 3 million and their burn rate is still high. Their production is also dropping instead of rising as well, revenue down, no where near 150-200k target, they will be lucky to do 30k this year.
Correct me if I am wrong but I think it was supposed to be year 1 20k rate year 2 30k year 3 ~70k+ year 4 150-200k. We are now in year 4 at about 27-29k per year without making a single dime.
Found some pics:
Their debt has also increased to a significant percentage of market cap at 16 million (from being debt free a couple years back). And their grades have dropped from .039 to .027, which even with the decline in oil and consumables means they still lose money. "The decrease resulted from lower average price per ounce of gold realized and lower [gold] production." I am not sure if that is a temporary section they are working through or what but things do not appear to be moving in the right (profitable) direction. Lode's plan seems to be: hope for higher metal prices and higher Dayton grades.
Good points. I think competition is far more likely than collusion yet it is a matter of degrees and I can see how they could simultaneously do both. The scandium companies compete for business but if one of them locks down a bunch of deals at a very high price point that might stick as the price for the first few years.
The Australian laterites will be low cost mines and this will drive those prices down in the long term even if there is a scandium cartel. It is obvious that if scandium was cheap enough demand would be tens of thousands of tonnes per year. At 3, 5, 10k/k that gets into the realm of being cost prohibitive and relegated to a niche market like military applications and areas where that cost benefit is still overwhelmingly favourable. Just as a range it seems the market has unlimited demand below a thousand, strong demand demand at 1-2k and then interest (from my own research) seems to fall off dramatically because you can substitute for titanium and other new nano materials and super-alloys like Hf Al and other similar things. There is probably still decent demand at $3-5k, some at 10k and almost none except vanity purchases and science experiments above that.
I think eventually CLQ and SCY will work like similar to high grade gold mines. With efficiencies gained and economies of scale I wouldn't be surprised if they ultimately cut costs in half and lower the price, say mine an oz of gold, er kilo of scandium oxide, for 3-400 and sell it for 11 or $1200. That is a pretty damn good mine with nice margins and all the demand they can handle. If the industry gets to this point the sky is the limit for scandium production and I think it will quickly go to hundreds and then thousand of tonnes of demand within a few years of the first sc hitting the market.
The scandium story continues to heat up. SCY is already nearing 10 bagger status for initial purchases and we haven't even gotten started yet! Smooth sailing to ~.30 and slightly beyond when they release drill results from the high grade center of their pit? I think so. Scyward!
Just an educated guess based on many years of watching lode and similar projects. There is no need to take offense or put any stock in anything I say even though I've proven myself to be pretty accurate over the years with lots of bumps along the way. If you don't want to listen to the opinion of a fairly experienced junior mining speculator that's your call. I have made a lot of money from my predictions so telling me to not make them will probably not dissuade me in the slightest.
It is only 10,169,492 shares. No one could have possibly seen this coming. /sarc.
How about those profits? Still MIA... LODE is great at spending money but they have yet to prove they can make a return on that investment.
The UG is encouraging though. They should in theory be able to turn a profit on that higher grade ore. I was wrong about the Lucerne being a profitable leach operation from the get go but the UG should follow a different path and have decent margins, even with the low US price of gold.
http://www.comstockmining.com/lucerne-underground-project
New multi year high of 22 cents or 11x its March 2014 low. This was one of the easiest multibaggers I have ever seen and very few people participated. We're still only at 12 board followers while some of the worst stocks on earth have hundreds of followers here on ihub.
It looks like my 25 cent target will be achieved shortly (probably this week) after several false starts. Hard to say exactly where to take profits since I think SCY is worth around 50c-a buck at this moment. At these prices a 3 cent move is a ~50% gain for long holders. I anticipate that there will be some interesting trading action over the next year.
SCYWARD!
Big volume .185 Close high of .19 ask at .20 project advancing rapidly, more ongoing drilling in the high grade pit, cash in the bank, one of the largest and most valuable mineral deposits on earth. Short term 25 cent target holding firm, hopefully everyone got their fill at 8 cents. Great opportunities are not to be squandered!
Scandium International Receives US$2.07M from Royalty Sale on Nyngan and Honeybugle Scandium Projects in Australia
Vancouver, British Columbia (FSCwire) - Scandium International Mining Corp. (TSX:SCY) (“Scandium International” or the “Company”) is pleased to announce that it has received US$2.07M (C$2.7M) from a private investor in return for the granting of a 0.7% royalty on gross mineral sales from both the Nyngan property and the Honeybugle property, in NSW, Australia.
Royalty Highlights:
US$2.07M cash proceeds received from sale of royalty
The royalty consists of a 0.7% gross sales royalty on both the Nyngan and adjacent Honeybugle properties, payable quarterly,
The royalty covers all minerals produced and sold from both properties, with no caps, minimums, term limits or early buyout provisions, and
The Company has retained all rights to commence and operate mining projects on both properties, and adjust land holdings, on a commercial basis as defined by management, consistent with other existing private and State royalties on the properties.
The proceeds from the sale of the royalty will be applied to complete the Definitive Feasibility Study (“DFS”) that was initiated in September 2015 and is currently underway. The DFS is being led by Lycopodium Minerals Pty Ltd, of Brisbane, Australia. The DFS will incorporate considerable metallurgical test work independently prepared for the Company over the previous five years, along with engineering, project design work, environmental work, mine planning, development work, and previous economic estimates. Additional metallurgical test work programs are currently underway now, along with studies and programs required to complete an Environmental Impact Statement scheduled for completion in Q4 of 2015. A small infill drilling program within the high-grade pit featured in the DFS is currently underway at Nyngan now.
George Putnam, CEO of Scandium International Mining Corp. commented:
“The Company is fully focused on working with Lycopodium and a cast of specialist engineering/mining consultants to complete a DFS suitable for funding project construction in 2016. This royalty funding ensures that we have the full resources needed to complete a DFS in a quality form, to meet the project standards set by State and Local requirements, and to bring the Nyngan Scandium Project to a financial investment decision-point next year.”
$2 million for a .7 royalty. The market likes the extra cash buffer. The royalty will probably look pretty good for the buyer in a few years but it is modest enough to not be a burden. Forward, forward, tally-ho, off to be the first primary scandium mine we go.
Great, I'm sure you will do quite well. You'll most likely make an easy 3-400% with low risk and you might even have a few ten baggers if you hold for few years to the sweet spot. But I think I'll make 20x-50x+ on Mexus with only slightly higher risk, perhaps even less risk depending how I look at it.
Just an opinion, no need to take offense. On a forum I usually speak in general terms, meant for the reading audience. It is not a personal critique of your investing decisions. I think you're personally doing fine although you might want to round out your selection with a royalty company like SAND and a few top junior picks. Being all in on 3 stocks is great when they are performing well but there is a reason many of the great speculators and investors hold 10-20 stocks on average instead of 2 or 3. Concentration is great when it works in your favour but mining is so full of commonplace disasters and delays that is quite possible that two or three (or more) of these events could happen simultaneously. (Imagine if I was all in Rubicon or Mexus-yikes). Any given mining stock could be one forest fire, delay, a missed drillhole, a cyanide leak, a cave in, an environmental discovery of a toad etc away from a shutdown and a huge stock decline. Even a great company like Claude has some of these risks, but they are so good in aggregate that they would in general prevail, but their stock prices can be anything in the short term as we've seen.
Unless someone has very limited capital I don't see why anyone right now wouldn't want to own 10-20 epic opportunities instead of 2 or 3. No matter how good of a stock picker you are some of your picks will do poorly even if you think you are a genius. Speaking from experience some of the opportunities I was most of convinced of did not work out as expected even some .1 P/e stuff. The "all in" mentality leads to irrational behaviour which usually isn't good for your pocket book in the long run.
CD my whole point is that it is not a long shot gamble. Most juniors are. Mexus is not. It is only a gamble if you know nothing about mining or the company itself and just picked stocks based only on the ticker. MXSG is a logical speculation with a very high chance of success. Gambling and speculating are two different things. A gambler has a terrible chance of success while a good speculator has a very high chance. An average junior is a 1/10000 chance to discover a deposit. Mexus already has a world class deposit of at least a million ounces at far higher grade than all the neighbouring profitable mines. [This represents at least 500 million in profit to an operator] At this point in time with these prices there is a massive "margin of safety" because many of these mines have never been priced lower in human history. You should buy when things are epic in their cheapness because they won't stay that way for long. We are at this point right now IMO. There has never been a larger margin of safety (risk mitigation through low prices and undervaluation) than right now, if that isn't a compelling reason then I don't know what is.
Mexus (now AR) has an amazing asset and no profits, but the asset is so good there is 100% chance it will be profitable and will generate them in the future. Saying they don't have an asset is wrong, they have one of the highest grade properties remaining on earth - this is worth far more than $5M just like even a demolished lambo is worth more than a dollar.
I don't think Mexus has any fatal flaws at this point. Most of the stuff you probably consider risks and unknown are minor and known to those who have done more research. There are some minor risks and unanswered questions that will be answered with time but saying stuff like "AR has not even released a follow up conformation of their deal yet" makes me wonder. The legal stuff was updated less than a month ago on sept 9. It is hard to tell but if you are implying that there is no deal (confirmed with PRs, emails, phone calls, recent conference call etc) then that is wrong. If you're implying that AR is unlikely to meet it's commitment or that there is anything above a microscopic chance of this happening, that's also wrong. The realistic chance of them renewing the property at least at this juncture is 100%. They (or their predecessors) will go on to fully develop the property no matter what. The only thing I can even imagine that would stop them at this point is Bre-X times a thousand. There is so much evidence the property is legit that faking it all seems to be so impossible I can't even really entertain the idea.
A Lamborghini has value but like Mexus it has nothing (or little) to do with potential profits, since a car, like a mineral property, is usually a depreciating asset that costs money to maintain. My comparison was meant in a relative value sense. It doesn't matter if it's a gold maple leaf for $50 or a junior with the best asset in the trend trading for pennies in the ground - both are obviously good deals and would be foolish to turn down unless you have even better opportunities elsewhere. The mine is more subjunctive to value than the bullion in hand of course, but both are great wealth creation chances. Buying a used car has a lots of risks associated with it just like mining. It doesn't matter whether I can evaluate every single minute component of the vehicle or any possible way it can be damaged, only that I can obviously say "this car is worth far more than a dollar (orders of magnitude more - I can't possible lose in the long term)- strong buy, I'll take all of them that you have." You can't effectively argue that a Lamborghini is valuable in and of itself but millions of ounces of the highest quartile gold on earth is valueless as the nearby majors rapidly deplete their low grade reserves.
I would argue the opposite, millions of ounces of high grade gold has a value, far more than a simple car. Perhaps the gold is worth very little now but it will be worth much more as it is developed and ultimately placed into production. It obviously has value to AR and Fresnillo and the other area miners.
Again do what you will with your own money. I just lead the horsies to water; I don't force them to drink. But please don't call my speculation a gamble.
There should be a big sign up: "Junior multibaggers for sale, so cheap there's no luck required."