Consolidated Global Mines (V.CTG) looks very good to me right now. I went to see the mine earlier this month as part of my research for an article I am writing about the company. I have a small position in my PF, but I think the stock is priced right at the bottom now and an excellent buying range for value investors, IMVHO. They have a fully permitted, modern mill and the recovery for the telluride ore they are running is above 90% efficiency for gold and silver. It is extremely high grade ore, averaging about 1 ounce of gold per tonne, and 10 ounces of silver, but hosted in narrow veins. They will be running a low tonnage but generating strong revenues.
The problem with the stock has been delays to get permits aproved for the mine. I heard rumours last week that they had gotten approval. I spoke with the mine manager today, and there are a lot of good things going on. First off, the rumour about the permit approval is true. They are now fully permitted to run at nearly 200 tpd which is more than we can handle at the mill anyway, so we have the green light to finally start making up some ground on the operations front. All that is left to do now is post bond with the state. Or to put it another way, those who are buying now will likely have caught the bottom.
They are still running development ore through the mill to fine tune the operations, but the feedstock they have put through this week is higher grade material. The recovery efficiency was already very good, so I do not think there is any problem with expecting recovery rates above 90% for both silver and gold. About 10 tons per day is being processed right now.
Underground development is also progressing. They had 2 stopes completed at the Frieburg Vein when I visited the mine earlier this month, and they are working to open 2 more stopes in the Cash Vein, with development work continuing to add one more stope in each. The importance of that work is that having several producing stopes allows for greater stability of production and since each stope can run about 10 tons per day of ore on average, they will need to have about half a dozen developed and in production to meet their interim goal of 50 tpd.
The longer term objective for the underground development is to extend the workings to the Northeast where they can intercept the veins of teh St. Joe, Keystone Stope, and Mack Vein mines, and thereby further increase the production capacity of the operation.
Surface drilling is underway to try and trace the vein systems they have identified at surface. They can run about 100 feet per day of diamond drilling, and they plan to issue regular updates on the assay results as they become available.
Thats all I got so far, and I am on a bird to Mexico tomorrow but I will try to post more info as I am able to speak with management in the future. The bottom line is that CTG will find itself very quickly generating revenues from all of this activity, and I think everyone who has held on through the long string of delays is about to see the company finally achieve the expectations that investors have bought into.
cheers!
COACH247 |
