AI
YES, that is the lovely area the GE is mining. Nice huh? Digr dug dirt around there in the past. He can speak for himself.
Once GE gets that water cleaned up I am going to ask my neighbor who is in charge of International Marriott Time Share development to propose a site there....of course we will need a helipad and better roads. I'll bet the cerveza is cheap there.
OK, you asked for it buddy. Rodsteel is about my favorite pro GE poster. Here is a recent post of his from RB:
_______________________________________________________________
The following are my personal reasons for considering MYNG to be a viable speculative investment.
The property
The company owns the mineral rights to 74,000 acres of a pre-historic valley in North Western Bolivia that was rather uniformly filled up with about 1000 feet of mineralized mud, clay, cobbles and boulders a long time ago in the following fashion.
100-200 million years ago plate tectonics pushed up Mt. Illampu. Mt. Illampu used to be 40,000 feet tall and had significant gold-bearing quartz intrusions on both its Eastern and Western slopes (La Paz was founded in a gold mining area on the Western side).
Concurrent or subsequent plate tectonics created a deep depression on its Eastern side. This "Graben Structure" was about 50 kilometers away and 30 kilometers wide running roughly north and south for 100 kilometers. Later action resulted in the natural damming of one end of the Graben Structure. The dam started the formation of a large lake system via the "old" Challana, Tipuani, Mariapu and Mapiri valleys.
Drastic climate change caused massive erosion of Mt. Illampu (down to its current 20,000 foot size) washing most of the Eastern slope's gold bearing quartz into the lake system. This supposedly occurred in three separate stages over several million years. The resulting filled-up lake became a plain that hardened into the Cangalli Conglomerate. The erosion process happened so (relatively) fast that there was very little chance for any terraces or river gravels to be formed. Just layer after layer of mud, clay, cobbles and boulders, year after year (I think for a total of 35 minor layers within the three major ones). Each layer contained some gold-bearing quartz that was ground up very fine by the process. The results were spread throughout the mud and clay and in some areas deposited in richer pockets (the current pay-streak lenses) all over the lake bed.
After the lake had filled and hardened subsequent erosion by weather and folding by further plate tectonic action created the most recent "mountains", valleys, terraces and river gravels. The current rivers flow West to East across the old structure. This process has eroded away less than one-quarter of the original Conglomerate that filled up the lake bed and the "old" Tipuani and Mapiri valleys.
Thus the Tipuani Valley portion of the Cangalli Conglomerate deposit is very large and low grade (20km by 2km by, at least, 100m deep - average grade is unknown). It is remote, has hardly been exploited, and then only by using primitive techniques. A significant portion (estimated to be between 50% and 80%) of the gold is present as very fine flakes. Prior to this attempt by GEII to process the Conglomerate using modern low-grade bulk mining techniques (using separators and concentrators) the other attempts were unable to recover this portion of the gold. Because the fine gold is usually trapped in the clays that stick to the surface of all the boulders, cobbles and gravels, a lot was "floated-away" by the standard washing techniques. There is no need to crush any of the larger material since the gold is already freely dispersed throughout - it just needs to washed off and separated.
Mining of the current terraces of the Tipuani Valley, the dredging of the Mapiri and Kaka river gravels and exploitation of some of the more easily accessible Tipuani Valley pay-streaks through shafts and drifts produced roughly 32M ounces of gold over a 500 year period. Extraction of gold from the Tipuani Valley in more recent times was overshadowed by the easier recovery technique of dredging the Mapiri river gravels upstream of Guanay from the 1950's until the early 1990's. The Tipuani river gravels themselves have not yet been dredged due to overlapping claims problems.
The risk
No one disputes that the Cangalli Conglomerate of the Tipuani Valley contains a lot of free gold in nuggets, flakes and fines through-out its length, breadth and depth. The dispute centers on whether the Conglomerate can be processed economically in bulk. This dispute is aggravated by having relatively narrow pay-streak lenses of indeterminate sizes scattered randomly both vertically and horizontally throughout the deposit and a significant variation in grade in between lenses depending on depth and uplift. Thus it is not economically viable to sample and model the Conglomerate using traditional drilling methods. Most studies have concluded that the property is too variable to define reserves to SEC standards without performing large bulk processing.
If the average recovered grade of this first mine and processing plant is anywhere above 0.5g/t and if the extraction efficiency is greater than 90% and if their direct extraction cost (using conal subsidence or similar, high-volume techniques) is anywhere below $2.00 per ton then the company can be profitable at this location.
If the average recovered grade proves to be greater than 1g/t then no one will dispute that the deposit could be profitable even with standard open-pit extraction techniques (assuming processing costs between $3 and $4 per ton).
The disputed average recovered grade range seems to be in the area from 0.2g/t to 0.5g/t.
If the average grade is above 0.2g/t and the extraction cost is less than $1 per ton then it will take a second plant to determine the true stock price. If the second plant can duplicate results of the first then the stock price will be a straight-forward function of average grade.
Here's the possible per share value in ounces of gold for 400M fully diluted at the following average recovered grades...
0.25g/t = 48M/400M = 0.12 ounces/share
0.5g/t = 96M/400M = 0.24 ounces/share
1.0g/t = 192M/400M = 0.48 ounces/share (most likely grade)
2.0g/t = 384M/400M = 0.96 ounces/share
The modern pilot plant started production at the end of September. The company is upgrading this plant from 1000 tpd to about 2500 tpd capacity by the end of November and should know by the end of December whether the average recovered grade is potentially profitable. The company should know by the end of next year if the average recovered grade is uniform across a large segment of the deposit.
Addenda
This company is slightly unique in many ways.
First, the company has always indicated in its SEC filings that there is high risk involved because of the indeterminate nature of the mineralization of the Cangalli Conglomerate.
One of unusual characteristics is that almost since its inception (for at least six years) the company has been "funded" (on an almost quarterly basis to the tune of about $1M per year) by a small but expanding group of accredited investors and friends or relatives of the original management in exchange for restricted stock. Although the potential fully diluted outstanding share total is around 400M shares (assuming conversion of 100M in debentures) the float only seems to be about to 130M shares. Thus, except for one individual, there is a significant number of reporting parties that have large (but relatively small percentage) holdings of restricted stock.
Another unusual characteristic is that almost every person involved in the actual operation of this company has been operating on a shoestring for the past five or six years. Management has been paid in deferred salaries and stock options, key workers that have been paid minimal salaries plus restricted stock and suppliers that have just received restricted stock.
Caveats
I spent several days with RA, TT, HB and GV in early October 2001. I have great respect for the abilities of all. However, I am a pragmatist (and an engineer by trade), I know things can unexpectedly go wrong.
Production at a break-even grade of 0.2g/t depends on direct production costs in the $75 per ounce range.
Direct production costs in the $75 range depend on cheaper electricity rates than currently charged, smooth operation of the conveyor systems, trouble free subsidence of the deposit, 95% extraction efficiency from the plant and many other critical variables. If problems arise, most can probably be solved given time and money. However, break-even grade is directly proportional to direct production costs. To be safe I have assumed traditional direct costs of $3-$4 per ton (rather than the sub $1 implied by $75 per ounce). This pushes break-even grade up to the 0.8g/t range.
The viability of each of the proposed plant sites will also depend on the thickness of the mineralized conglomerate that contains average recovered grades above the break-even. I have assumed at least 100m for the infrastructure cost of the conal subsidence technique of avoiding barren overburden to be cost-effective. If the mineralized layer is less than this on average it will probably have a significant impact on direct production cost (and thus break-even grade).
These are just a few of the issues that prevent me from considering this a "done deal" from a stock speculation stand-point.
Rod
_______________________________________________________________
Colleen in Orlando
Once GE gets that water cleaned up I am going to ask my neighbor who is in charge of International Marriott Time Share development to propose a site there....of course we will need a helipad and better roads. I'll bet the cerveza is cheap there.
OK, you asked for it buddy. Rodsteel is about my favorite pro GE poster. Here is a recent post of his from RB:
_______________________________________________________________
The following are my personal reasons for considering MYNG to be a viable speculative investment.
The property
The company owns the mineral rights to 74,000 acres of a pre-historic valley in North Western Bolivia that was rather uniformly filled up with about 1000 feet of mineralized mud, clay, cobbles and boulders a long time ago in the following fashion.
100-200 million years ago plate tectonics pushed up Mt. Illampu. Mt. Illampu used to be 40,000 feet tall and had significant gold-bearing quartz intrusions on both its Eastern and Western slopes (La Paz was founded in a gold mining area on the Western side).
Concurrent or subsequent plate tectonics created a deep depression on its Eastern side. This "Graben Structure" was about 50 kilometers away and 30 kilometers wide running roughly north and south for 100 kilometers. Later action resulted in the natural damming of one end of the Graben Structure. The dam started the formation of a large lake system via the "old" Challana, Tipuani, Mariapu and Mapiri valleys.
Drastic climate change caused massive erosion of Mt. Illampu (down to its current 20,000 foot size) washing most of the Eastern slope's gold bearing quartz into the lake system. This supposedly occurred in three separate stages over several million years. The resulting filled-up lake became a plain that hardened into the Cangalli Conglomerate. The erosion process happened so (relatively) fast that there was very little chance for any terraces or river gravels to be formed. Just layer after layer of mud, clay, cobbles and boulders, year after year (I think for a total of 35 minor layers within the three major ones). Each layer contained some gold-bearing quartz that was ground up very fine by the process. The results were spread throughout the mud and clay and in some areas deposited in richer pockets (the current pay-streak lenses) all over the lake bed.
After the lake had filled and hardened subsequent erosion by weather and folding by further plate tectonic action created the most recent "mountains", valleys, terraces and river gravels. The current rivers flow West to East across the old structure. This process has eroded away less than one-quarter of the original Conglomerate that filled up the lake bed and the "old" Tipuani and Mapiri valleys.
Thus the Tipuani Valley portion of the Cangalli Conglomerate deposit is very large and low grade (20km by 2km by, at least, 100m deep - average grade is unknown). It is remote, has hardly been exploited, and then only by using primitive techniques. A significant portion (estimated to be between 50% and 80%) of the gold is present as very fine flakes. Prior to this attempt by GEII to process the Conglomerate using modern low-grade bulk mining techniques (using separators and concentrators) the other attempts were unable to recover this portion of the gold. Because the fine gold is usually trapped in the clays that stick to the surface of all the boulders, cobbles and gravels, a lot was "floated-away" by the standard washing techniques. There is no need to crush any of the larger material since the gold is already freely dispersed throughout - it just needs to washed off and separated.
Mining of the current terraces of the Tipuani Valley, the dredging of the Mapiri and Kaka river gravels and exploitation of some of the more easily accessible Tipuani Valley pay-streaks through shafts and drifts produced roughly 32M ounces of gold over a 500 year period. Extraction of gold from the Tipuani Valley in more recent times was overshadowed by the easier recovery technique of dredging the Mapiri river gravels upstream of Guanay from the 1950's until the early 1990's. The Tipuani river gravels themselves have not yet been dredged due to overlapping claims problems.
The risk
No one disputes that the Cangalli Conglomerate of the Tipuani Valley contains a lot of free gold in nuggets, flakes and fines through-out its length, breadth and depth. The dispute centers on whether the Conglomerate can be processed economically in bulk. This dispute is aggravated by having relatively narrow pay-streak lenses of indeterminate sizes scattered randomly both vertically and horizontally throughout the deposit and a significant variation in grade in between lenses depending on depth and uplift. Thus it is not economically viable to sample and model the Conglomerate using traditional drilling methods. Most studies have concluded that the property is too variable to define reserves to SEC standards without performing large bulk processing.
If the average recovered grade of this first mine and processing plant is anywhere above 0.5g/t and if the extraction efficiency is greater than 90% and if their direct extraction cost (using conal subsidence or similar, high-volume techniques) is anywhere below $2.00 per ton then the company can be profitable at this location.
If the average recovered grade proves to be greater than 1g/t then no one will dispute that the deposit could be profitable even with standard open-pit extraction techniques (assuming processing costs between $3 and $4 per ton).
The disputed average recovered grade range seems to be in the area from 0.2g/t to 0.5g/t.
If the average grade is above 0.2g/t and the extraction cost is less than $1 per ton then it will take a second plant to determine the true stock price. If the second plant can duplicate results of the first then the stock price will be a straight-forward function of average grade.
Here's the possible per share value in ounces of gold for 400M fully diluted at the following average recovered grades...
0.25g/t = 48M/400M = 0.12 ounces/share
0.5g/t = 96M/400M = 0.24 ounces/share
1.0g/t = 192M/400M = 0.48 ounces/share (most likely grade)
2.0g/t = 384M/400M = 0.96 ounces/share
The modern pilot plant started production at the end of September. The company is upgrading this plant from 1000 tpd to about 2500 tpd capacity by the end of November and should know by the end of December whether the average recovered grade is potentially profitable. The company should know by the end of next year if the average recovered grade is uniform across a large segment of the deposit.
Addenda
This company is slightly unique in many ways.
First, the company has always indicated in its SEC filings that there is high risk involved because of the indeterminate nature of the mineralization of the Cangalli Conglomerate.
One of unusual characteristics is that almost since its inception (for at least six years) the company has been "funded" (on an almost quarterly basis to the tune of about $1M per year) by a small but expanding group of accredited investors and friends or relatives of the original management in exchange for restricted stock. Although the potential fully diluted outstanding share total is around 400M shares (assuming conversion of 100M in debentures) the float only seems to be about to 130M shares. Thus, except for one individual, there is a significant number of reporting parties that have large (but relatively small percentage) holdings of restricted stock.
Another unusual characteristic is that almost every person involved in the actual operation of this company has been operating on a shoestring for the past five or six years. Management has been paid in deferred salaries and stock options, key workers that have been paid minimal salaries plus restricted stock and suppliers that have just received restricted stock.
Caveats
I spent several days with RA, TT, HB and GV in early October 2001. I have great respect for the abilities of all. However, I am a pragmatist (and an engineer by trade), I know things can unexpectedly go wrong.
Production at a break-even grade of 0.2g/t depends on direct production costs in the $75 per ounce range.
Direct production costs in the $75 range depend on cheaper electricity rates than currently charged, smooth operation of the conveyor systems, trouble free subsidence of the deposit, 95% extraction efficiency from the plant and many other critical variables. If problems arise, most can probably be solved given time and money. However, break-even grade is directly proportional to direct production costs. To be safe I have assumed traditional direct costs of $3-$4 per ton (rather than the sub $1 implied by $75 per ounce). This pushes break-even grade up to the 0.8g/t range.
The viability of each of the proposed plant sites will also depend on the thickness of the mineralized conglomerate that contains average recovered grades above the break-even. I have assumed at least 100m for the infrastructure cost of the conal subsidence technique of avoiding barren overburden to be cost-effective. If the mineralized layer is less than this on average it will probably have a significant impact on direct production cost (and thus break-even grade).
These are just a few of the issues that prevent me from considering this a "done deal" from a stock speculation stand-point.
Rod
_______________________________________________________________
Colleen in Orlando
Cytotekk,
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