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Tagged with: 2010

Sep 2010 - Focus Minerals

Focus Minerals Ltd (FML) – Targeting Gold Production of >120,000ozpa for >10years

  • Focus Minerals (FML) appears to have an achievable production target of >120,000ozpa for >10 years, based on an expected 60% to 70% conversion of its 2moz resource (for 1.2moz to 1.4moz). Yet this excludes ~ 1.5mt of surface stockpiles of >1g/t (ranging up to Brilliant’s low grade stocks in SQ10 at ~2.1g/t).
  • Current ore sources are FML’s Coolgardie goldfield, the Mount, & surface stocks for FML’s recently upgraded ~1.2mtpa 3-Mile plant (operating since January 2010). With ~200,000tpa to 400,000tpa from surface stocks at >1g/t, and an expected 250,000tpa to 350,000tpa at >5g/t from the Mount for at least 10 years, the remaining 500,000tpa to 700,000tpa should be capable of being sourced from the Coolgardie goldfield (at 3.5g/t to 5.0g/t for ~120,000ozpa and an ~92% recovery).
  • FML is expected to still be in transition through to ~March 2011, as it still has a parcel of La Mancha ore to toll treat by early September 2010, and it needs to slype (enlarge) the decline at the Mount by ~MQ 2010, in order to use larger trucks. (Following its discovery that the Mount has significant upside potential for a >250,000tpa mine at possibly ~7g/t to 9g/t or so for probably >10years).
  • FML owns most of the Coolgardie goldfield, which can be subdivided into 5 areas being the two main historic areas of the TMC (Tindals Mining Centre) and the LMC (Lindsays Mining Centre) separated by the Brilliant Block, and Regional north and south. Of which current production is mostly from the underground TMC mines.
  • The TMC itself consists of an underground centre of 5 orebodies, the old Dreadnought area to the south and old workings to the east. Of which the main production area is Perseverance (discovered by FML in 2004/5), followed by Countess and Empress. Perseverance contains the relatively new “Link” structure that is expected to average ~10g/t to 20g/t (but can range up to ~60g/t).

Oct 2010 - DnD - CAH, SLR, MPR

Buy CAH ; Buy SLR ; Spec Buy MPR

  • Our DnD Review is somewhat belated this year, as we completed our report on Focus (FML) first, (which slumped to ~3.8c post Dnd as the market focused on its ~200,000oz in reserves compared to the ~2moz resources), and quite a few of the gold stocks have run / increased significantly since then, spurred on by the Andean takeover.
  • Around Diggers we attended Catalpa’s Edna May mine opening, revisited Silver Lake’s : Daisy East progress underground at Daisy Milano, saw further intersections at Magic and walked over the new Wombola (North Monger) acquisition. We also visited the planned MacPhersons Reward Gold Ltd IPO (which is currently waiting for its ASX code which may perhaps be MPR or MRG) property, and spent 6 days with Focus (FML).
  • Focus Minerals is the subject of a separately released report (16 September 2010) that expected FML’s share price to double from ~5.4c per share, especially when the sensitivity to grade is considered (increase grades by 5%, add 1.4c to FML’s value),
  • Aside from the visits, the standouts at DnD were Silver Lake’s 1000oz (solid) Gold Miner in their booth as shown in Figure 1a, and Sandfire’s copper mineralised drill cores as shown in Figure 1b (showing how realistic their discovery is).

Nov 2010 - Patagonian Epi's

Two Very Different Patagonian Epithermals

In late October 2010, we visited two very different epithermal deposits in the Deseado Massif of Patagonia in Southern Argentina, namely Mariana’s Las Calandrias and Extorre’s Cerro Moro.

Nov 2010 - Sth American Review

Buy Extorre (XG) & Exeter (XRC)

  • In the two weeks after we emailed our Post DnD Review on 8 October 2010 we visited Argentina and Chile, spending almost a week visiting Mariana (MARL.L, an AIM listed company that expects to list on the TSX in Dec 2010/Jan 2011, & the subject of a separate report), and the following week participating in an ~40 strong analysts visit for what we thought were only the epithermal operations of Extorre (XG.TO) and Exeter (XRA, XRC.TO), which we attended to enhance our knowledge of epithermals. Mariana’s operations are in Argentina’s Patagonia and Chile, as were Exeter’s before it split under a plan of arrangement earlier this year (Mar 2010) into Extorre in Argentina (mostly Patagonia) and Exeter in Chile. The codes in brackets are Reuters codes (we use yahoo finance to freely access such prices, eg : http://finance.yahoo.com/q/cq?d=v1&s=marl.l+xg.to+xra+xrc.to).
  • WELL WHAT A SURPRISE !!. Both Extorre and Exeter appear capable of at least doubling their ~$6 share prices (Extorre based on potentially higher grades [– they are the highest we have ever seen in an epithermal], greater life, and possibly later greater throughput; and Exeter based mostly on market cap comparison, but also the possibility of occasionally better grades, and possibly better recoveries – especially in the oxide).
  • However, they are TSX or AIM listed companies and not listed on the ASX. So how do you buy them if you reside in Australia?. Well you should contact your own brokers. However, if you trade through Taylor Collison (TCL, the broker we are associated with and are a qualified Corporate Authorised Representative of) then : you place the order with your advisor, who can forward the order to the broker TCL are associated with in Canada.
  • That broker then (say) buys the stock and it is placed in a holding account, which is settled between TCL’s bank in Australia and the associate’s bank in Canada. TCL will raise a trade confirmation on your account which you will receive in the usual way (ie via email or post). For example: An order placed for ~$10,000 XG on 26 Oct, was transacted in Canada overnight, with the contract note received on 28 Oct, for settlement by 29 Oct (basically for TCL clients, the order is executed in Canada, and Canadian brokerage incurred, the whole converted into A$, and then Australian brokerage incurred on the converted A$ total, plus the usual GST on the Australian brokerage).
  • All the information in this comment is public. The visit included a number of broker analysts, fund managers, & media/investor groups like Mineweb and the Midas Newsletter (using video recordings and skype links to Reuters), (and a separate London broker led fund manager group, that appeared to try and avoid our group, arriving on mine sites at times like 3pm and 5pm – so they obviously missed the spectacular Andes flyover of Exeter’s Caspiche mine, east of Copiapo in Northern Chile)
  • It was the first time we have visited Argentina and Chile (well we have passed through Santiago on the way to Brazil and back from Peru when visiting Mundo’s operations). Both countries appeared to be relatively well developed (compared to what we have seen of Brazil and Peru) with Santiago apparently little affected by the earthquake earlier this year (as in its spaghetti junctions of freeways appeared to be intact including the ~11km long freeway tunnel that passes under the city).

Dec 2010 - Mega Gold Mines

The Mega Gold Mines are Coming

In the SMH of 29 November 2010, it was reported that the Kalgoorlie Super Pit was Australia’s biggest producer in the September Quarter of 2010 with 202,000oz, followed by the new Boddington mine at 180,000ozpa. Both mines producing ~800,000ozpa.

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