RR:
Yes, Yamana has to find a mineable deposit fairly soon. I'll not venture a guess about the timing, size or type necessary to have the sort of impact on the market we are all looking for. If nothing else changes -- eg. the market; our cash position; share price, partnerships, commodity prices, signing of the COW's in Indonesia, a major find by someone near one of our properties, a take-over attempt etc. etc -- we will need to find something sooner rather than later. At the moment I would guess that this COULD come in the reasonably near term from PNG, the Northern Porphyry Belt, Santa Cruz, Paraguay or (Heaven forbid) Indonesia. The scenerios vary but, based on what we have found, they are all real possibilities.
Meanwhile, Yamana will go ahead with Santa Cruz, Vanguardia with or without a partner. Drilling should start in about a month. We have operations bases, a drill, a lab and a team ready-to-go, so costs can be controlled. At the same time, we are still active in a number of discussions about this property. Yamana has at least four targets which have already shown strong to very strong results and, with a $1-$2-million exploration program, these targets could produce some serious results, if not a "resource" or even a "deposit" by mid-to-late season.
Fin del Mundo is even lower cost and, at the moment, the plan is to carry on there as well. Westmin had wanted 1,500 meters of more drilling at Sargeant and Arroya Rojo because there was some real promise there. Also, the two most promising holes failed -- rock conditions and drill pad access / angle -- so they will have to be re-tested. Finally, 85 meters of core was "lost" when it was dropped by the helicopter and not recovered so that is another area that was high priority but which was not truly tested. This is a light which still burns vigorously.
Like at Santa Cruz, discussions are underway with a couple of possible "suitors". That program would not start before November and could wait even later in the year if necessary. I'd say this is one of the areas where we have some flexibility.
Spending in the Northern Porphyry Belt is not high. I believe the chance that we will find a major for a partnership there is quite high, based on the queries I've had and the feedback we are getting from Rothschild. I can only say that the preliminary results we have to "tell the story" are quite strong (ie. independent surveys testing for different indicators for porphyry systems showing anomalous / positive results). At the same time, the price tag at the initial stage is not exhorbitant. And don't forget, 5-10 holes to test each of the ten targets could give us definite "no's" or healthy "maybe's". In other words, unlike epithermal gold systems, the preliminary exploration stage can be a short one. These were the sorts of targets (in terms of cost, size and time) that Rio Algom and, perhaps it would not be unfair to say, Westmin were looking for.
We have already earned 15 percent on the PNG properties, including on the 520,000 ounce resources which have already been delineated and verified by the Winters Company out of Arizona. We have spent there faster than expected so we could cut back on spending there if necessary without disturbing our JV agreement with Union. More about this program over the next month or so. I can still say it is definitely going in the right direction.
Your concerns are valid and Yamana's management and board are very well aware of them all. I hope this helps and I'll keep you posted.
Greg |
