The ultimate goal of the Venz govt is the key to guessing the outcome of this project. IMO that goal is a large scale mining operation in the KM88 district. They envision another Carlin trend or another South Africa that supports significant employment opportunities for the Venz. locals. I don't particularly agree that the Venz. govt does little to promote mining and feel they generally get a bum wrap.
Article from Venz newspaper El Progreso gives a sense of the politics of PDG's failure to develop LC:
ragingbull.altavista.com
The party that is the obstacle to this is PDG. GLDR appears to fit into the puzzle because of the economies of scale Brisas contributes. KRY's Albino has completely different processing requirements and doesn't offer the same synergies. From what I understand of the GLDR proposal, the extra capex (to one billion) above the earlier KRY, GLDR, PDG proposals (half billion area) means the cash cost economics improve to the 110 area from 150. Apparently this results from utilizing larger, more efficient, and more expensive milling processes and outputs. The Scotia study will tip us off as the Venz govt approach. My guess is a larger project along the lines GLDR promotes.
I think Venz is using KRY's claim to further their ends. It is another way for the govt to lean on PDG to start the project. Ultimately it is about furthering their vision for the district. Whoever can do it, be it PDG, KRY, NDY or ANGLY, or whoever will have the path cleared for them. If NDY arrives on the scene with a billion dollars to invest, KRY claims will wilt like a flower without water. If there is any certainty, it is that Venz. will not allow KRY's claims to hold this up. Of course if there is no NDY or ANGLY out there (I don't think PDG will come through, and will sell cheap) to do the big project, then maybe KRY can pull off the smaller, gradualist approach. It may be a fall back for the govt, but IMO that's not what the Venz govt wants. I don't see KRY just totally left at the alter. They will benefit from the development of the district, but taking on the LC project I just don't see.
My takeout calc of GLDR of (10 oz X 7 million oz= $70 million/23 million shares= roughly $3.00 plus 75 cents cash= $3.75). Could well be higher, but I don't think GLDR will be in a position to name their price. |
