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Strategies & Market Trends : The Ego Forum -- Ignore unavailable to you. Want to Upgrade?

To: hubris33 who wrote (11607)	12/31/2012 4:59:05 PM
From: loantech	3 Recommendations Read Replies (1) \| Respond to of 12175

Hubris thanks for your hard and intelligent work. The intelligent part leaves most of us out. I like another Nevada play that I picked up just a couple weeks back or so. VG.t. verisgold.com The old Queenstake. Recent share rollback and financing clobbered the price so may have some value and they project good growth for 2013. May happen as they changed mine management a couple years back: Vancouver, BC -- December 7, 2010 -- Yukon-Nevada Gold Corp. (the "Company") (Toronto Stock Exchange: YNG; Frankfurt Xetra Exchange: NG6) is pleased to announce the appointment of Mr. Guy Simpson as the General Manager at Jerritt Canyon, Nevada. verisgold.com What I really like is the roaster worth a billion or so to reproduce. They can rent out capacity to bring their gold cost down: ?6,000 Tons/Day Roaster Mill at the Jerritt Canyon Mine - Valuable Strategic Asset ?Replacement cost of US$1 billion. No new roasters have been permitted in the past 12 years and none are planned. ?Toll milling opportunities - numerous companies with refractory ore in Nevada and surrounding region. ?The only roaster in Nevada and surrounding region with near-term excess capacity. ?Roaster permitted capacity of 6,000 tpd (5,400 tpd factoring in availability). ?Jerritt underground production of 3,000 tpd from current mines leaving approximately 2,400 tpd for toll milling ore processing at full permit capacity. ?Current terms being considered for toll milling agreements include: ?Start @ 1,500 tpd by Q2 2013 and up to 2,400 tpd of excess processing capacity by 2014. ?Batch processing ores with metal delivered as recovered, or VGC to retain a portion of 3rd party gold as upside. ?Structured similar to smelter concentrate processing agreements. ?Potential to initially generate $50 - $75mm, cash cost target of US$550/oz and ultimately as much as $125mm in annual revenue credit, with possible cash cost reduction to ~US$400 - US$550/oz. >>>>>>>>>> With some luck maybe VG becomes a TO target with that roaster. Not sure why ANV did not buy them out but time will tell. ANV may be building their own. Growth potential: Production Growth ?Expected 2012 gold production of 110,000 ozs. ?Currently on 150,000 ozs/year run rate and ramping up to 180,000-200,000 ozs in 2013 (not including toll milling). ?Cash costs declining from average of approximately US$1,600/oz in H1 2012 to an estimated US$1,015/oz Au in Q3 2012 and forecast US$885/oz in Q4 2012, driven primarily by increased throughput. >>> See roaster renting to lower costs down to a great number IF IT HAPPENS. Happy New Year, Tom PS:VG.t has some gold loans....... :-(((

To: hubris33 who wrote (11607)	1/3/2013 7:05:36 AM
From: TheSlowLane	2 Recommendations Read Replies (1) \| Respond to of 12175

Nice list. I can offer some comments on Alexco. I think the company has good prospects here as an emerging silver producer. The company has been running Belle Keno for a couple of years and while there have been the "learning experiences" and growing pains that are commonly associated with going into production, my sense is that they have done a good job of identifying problem areas and addressing them. That has been their stated focus and the numbers are starting to reflect it. In addition to Belle Keno they have two mines that are in the permitting process and are expected to get permits in 2013 that will enable production to increase further. Tons of exploration upside on the property as the work they are doing on Flame & Moth and Bermingham is showing. Operating in the Yukon is not without its challenges. The infrastructure is going to make it challenging for anyone hoping to build a mine there (there is only grid power for one or possibly two more mines) and from what I understand at least some of the skilled personnel required to run mine and mill operations are commuting from eastern Canada (2 weeks on/2 weeks off). The good news is that Alexco is already in operation so they have the power they need and are developing the workforce over time. Clynt N., the CEO, seems like just the kind of guy you want to see running a mining company, imo. He's down to earth, non-promotional and tightly focused on the task at hand. He has had to deal with a number of hurdles bringing the company to this point but it is a CEO's capability for dealing with issues rather than being able to avoid them altogether (impossible) which is of interest to me. The stock has gotten creamed due to, I suspect, frustration over the production issues. Assuming that it is true that production issues are successfully addressed and margins improve, then the price at this level may represent an attractive opportunity. Here are some photos I took this summer: Entrance to the Belle Keno mine: The view from the Lucky Queen mine portal area: Drilling at Flame & Moth: Alexco's core shack:

To: hubris33 who wrote (11607)

1/8/2013 6:06:14 AM

From: TheSlowLane

1 Recommendation Respond to of 12175

Getting back to the list...

There is another company on the list with which I am familiar. A few years ago I had the opportunity to visit several mining companies in the Deseado Massif area of the the Santa Cruz province of Argentina. Besides coming away from that trip with the overall impression that Argentina is currently besieged by fiscal and economic problems but they are sitting on incredible mineral wealth. If the country can get its act together, the ingredients are there for a potential area play.

I took your solicitation as an opportunity to collect my current thoughts on the company and gather them in one place. Argentina is a locale that some people avoid due to the economic situation but for those with the tolerance for that type of country risk, there are some situations with excellent potential. For example...

Minera IRL

Overview

Minera IRL is executing a plan that will take them from junior producer to mid-tier producer status. The company has built and operates one mine now at Corihuarmi in Peru. The company will build and bring two more mines into production over the next three years, delivering strong revenue and earnings growth in the near term and for the foreseeable future.

The company is likely to succeed at this due to The Three P’s:

People
Projects
Phinance

People

Management quality is an essential success factor for a junior mining company and some would argue the most important of all. Courtney Chamberlain and his team area as good as it gets in that regard. Extremely competent, professional and understated. Courtney is a heads down, hands on builder of mines and businesses.

The manner in which a company deals with locals speaks volumes about the operating style and capabilities of a management team. Minera IRL inherited an extremely difficult situation along with a deposit they acquired in Peru. The former holders of the property had mangled relations with the community so badly that they were literally run out of town. It took a long time for that damage to be undone.

After about 18 months of negotiations, Minera IRL was able to secure surface rights. At one point the IRL team invited the people representing the community to their offices in Lima. This gesture did not go unnoticed by the locals as no previous operator had thought to extend that courtesy to them. Early on in the process, when IRL was still working on building good will in the community the company voluntarily offered 5% profit sharing with the community. As a consequence the project is strongly supported by the community as demonstrated recently by a general assembly vote approving the Environmental Impact Assessment.

The IRL team has demonstrated competence in a number of key areas including building and operating mines, exploration, fundraising, financial management and community relations.

Projects

Minera IRL is developing mines at Don Nicolas in Argentina and at Ollachea in Peru. The company is producing gold from the mine at Corihuarmi in Peru. Corihuarmi is scheduled for closure in a couple of years. Meanwhile the mine has been providing cash to fund the company’s exploration and development efforts. Additional funding will be required to build the two mines in the pipeline.

Argentina

In recent years, the Argentine government has been grappling with rampant inflation and related issues. Some of the knee-jerk policy reactions taken in response have created a degree of uncertainty for the mining companies in regard to taxes and royalties, but all indications are that there is no perceived threat of nationalization.

Argentina’s current economic problems have not been sufficient to discourage the mining companies from continuing to develop projects and make acquisitions there. There are a lot of gold and silver ounces in the ground there and the area is relatively early in the exploration cycle. The Santa Cruz province is a mining friendly jurisdiction and hosts several operating mines and will see more mines brought into production over the next several years.

The Deseado Massif area of Santa Cruz Province is a good place to build a mine

Anglogold’s Cerro Vanguardia is a good example for how development can proceed in the Deseado Massif. Anglo built a mill that is fed by several open pits. They are bringing on more pits and have initiated underground operations as well. With plenty of exploration targets nearby, the mine should be able to operate for decades.

Cerro Vanguardia’s northwest trending vein deposits are evident when seen from above

Don Nicolas

Minera IRL has completed the Feasibility Study and permitting for the Don Nicolas project in Argentina and is executing a plan to bring the mine into production in 2014. While Ollachea is considered the flagship project in the company, the Don Nicolas mine is showing respectable numbers.

Feasibility Physicals

Open pit mine
Conventional CIL, 92% recovery
High grade
M&I: 280K oz Au @ 6.0gpt
P&P: 197K oz Au @ 5.1gpt
3.6 year mine life with excellent potential to extend

Feasibility Economics

Annual Avg prod. 52K Au oz, 56K Ag oz/year
Capital Cost $55MM
Oper. cost. $/t $82.50
Oper. cost. $/oz $528
Post tax IRR of 22.8% @ $1250 gold, 2.0 year payback
Post tax IRR of 38.1% @ $1500 gold, 1.7 year payback

Minera IRL has acquired a significant property portfolio in Argentina. The potential to follow a Cerro Vanguardia model of development is obvious, given the number of prospective targets that have been identified in proximity to Don Nicolas. Over the next year the company will have the opportunity to demonstrate again their ability to finance and build a mine and commission and operate it after that. Ongoing exploration work on their extensive land position will continue to advance discoveries they have made as well as generate new ones.

Finally, it is worth noting that the numerous targets now include more than one style of mineralization. For the most part, exploration in the Desado has concentrated on narrow vein, high grade deposits like those that are being mined at Cerro Vanguardia. Exploration work by Mariana Resources and Minera IRL is now revealing significant potential in high-grade targets that are related to rhyolite domes.

“Precious metal mineralization at Choique is spatially and genetically related to rhyolite domes. This differs from the nearby Martinetas veinfield, host to much of the Don Nicolas Project reserves and resources, where mineralization is mainly in narrow veins hosted by a variety of gently-dipping volcanoclastic facies. Volcanic host rocks at Choique are characterised by intensely clay-silica+/-pyrite altered rhyolitic lavas. Mineralization is dominated by disseminated and massive sulphides plus minor epithermal veining similar to the rhyolite dome complex that hosts the contiguous Minera IRL "Escondido" and Mariana Resources "Las Calandrias" deposit located some 34 kilometres to the north-west.”

At first glance, the relatively short initial mine life of under four years at Don Nicolas can seem problematic. An examination of the mineral resources in Minera IRL’s inventory as well as the enormous exploration potential of the area supports the contention that the company will be able to keep the deposit pipeline stocked through ongoing exploration efforts.

Peru

Minera IRL’s flagship project Ollachea is located in the Puno region of Peru. The company has completed a feasibility study on the project and is currently driving a 1.2Km tunnel horizontally from a surface portal to directly access the deposit. The tunnel will also enable the company to extend the deposit to depths that were not attainable from surface. Financing for Ollachea will be arranged some time this year and will likely include a combination of debt and equity.

Artisanal miners have been active on the Ollachea deposit for many years and their work has been allowed to continue as Minera IRL prepares to build the mine. In the photograph above, the numerous blue dots are the tarps of the artisanal miners. The company anticipates that many of the artisinal miners will transition to become employees when the mine goes into production.

Feasibility Physicals

Orogenic deposit, underground mine
1.4MM oz Au Indicated, 4.0 gpt
1.0MM oz Au Probable, 3.5 gpt
0.9MM oz Au Inferred along strike at Concurayoc
Conventional CIL treatment, 91%+ recovery
1.1m tpa mining rate
9 year initial mine life
Exploration upside along strike and to depth

Feasibility Economics

113K Au oz/year
$177.5MM capital cost
$49 operating cost per tonne
$499 operating cost per ounce
Post tax IRR of 22.1% @ $1300 gold, 3.7 year payback
Post tax IRR of 30.2% @ $1600 gold, 3.0 year payback

Phinance

Minera IRL needs to arrange financings for Don Nicolas and Ollachea in order to build them into mines. The funding process for Don Nicolas is already well advanced. Multiple term sheets have been submitted to the company that are offering debt financing without requiring hedging. Further details are not yet available as negotiations are still underway.

Financing for Ollachea will be arranged separately from Don Nicolas and the company has said that they intend to use a combination of debt and equity to accomplish this. With a relatively reasonable capex of under $200 million, the project should not be difficult to finance given IRL’s track record and financial position especially once Don Nicolas is in production.

Psummary

To psummarize...in my opinion - which is untainted by neutrality - Minera IRL has the requisite ingredients to deliver increasing shareholder value over the next several years. They have people with the experience and the skills, the mineral assets, financing in progress and a credible plan to get them there.

As for specific pshare price targets and timeframes...I will let everyone work out their own models for themselves. The analyst consensus has IRL earning eleven cents per share by 2014. Pick a multiple and there you go.

For me, when it comes to juniors it really is all about management. Management integrity. Ability to execute. Ability to raise funds and manage them. To keep the share count under control. Ability to attract and motivate quality personnel when competition for them is intense. Ability to navigate delicate negotiations with multiple constituencies from government regulatory agencies to local communities. Ability to communicate with shareholders and analysts clearly, credibly and consistently.

There is still much work to be done before IRL completes its transition to a mid-tier mining company and this business is fraught with risk coming at it from every direction. It is why the management of these companies needs every one of those skill sets just inventoried and why I am comfortable sleeping at night holding on to my IRL shares.

Ticker:	IRL.TO
Shares OS:	151,902,884
Price:	0.90
Market Cap:	136,712,596

http://tmx.quotemedia.com/quote.php?qm_symbol=irl