I added to NTO this morning. I had prepared these notes last night after an order didn't get filled and before the BFS came out.
EPS estimates for next year have risen again, having jumped over 11% in the last week.
finance.yahoo.com
After years of waiting and hand-wringing, the feasability study used to obtain financing and develop the project has finally been released. "It defines the project, demonstrates the economics and gives us a firm framework for development of the project. The low projected operating costs should provide the project with the ability to generate cash flow through anticipated future metal prices. We have built up an exceptionally strong technical, community and environmental team with which to move the project forward."
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Somone thinks there's a short squeeze:
NORTHERN ORION RE (NTO) has had 122010277 shares shorted at a volume weighted average short price of $4.340. $366,030,831.00 was shorted at this level and may begin short squeezing imminently. This represents a portion of the total short volume since January 2005. To see all the data, please visit SqueezeTrigger.com . As of September 10th, the Total Short Interest was 429978 shares. There are $1,866,104.52 worth of shares that have been shorted and have not yet covered.
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Snips from a Feb. 05 promotional stock newsletter touting NTO. The gentlemen mentioned are David Cohen, CEO, and Pablo Marcet, President:
Nearly five years ago, in a very depressed metals market, the world’s largest mining company, BHP - an Australian firm - made a decision to pull out of Argentina. BHP’s top executives told their Argentine manager of operations to get out of any project that wasn’t currently producing ore and dollars. BHP decided the political and economic risks of doing business in Argentina were simply too great to continue to develop new projects. Many other multinational companies pulled out at the same time. And, perhaps they were right to do so: crisis struck in 2001.
You’ll recognize the name of BHP’s former manager of Argentine operations. He is one of the two men I mentioned earlier. He’s my contact in Argentina’s mining sector: His name is Pablo Marcet. Over the last two years I’ve been to Argentina six times, searching for distressed assets that were safe to buy...
In 2001, BHP wanted out of Argentina. But there were no bidders for its properties, one of which was Agua Rica. Agua Rica is located adjacent to one of the largest, most productive mines in South America. It’s called Alumbrera. Over a billion dollars has been invested in Alumbrera, in discovery and pro-duction equipment.
As a result, the surrounding area has long been a center of mineral exploration. Since the 1970s work has been ongoing at Aqua Rica. Over $55 million has been spent by BHP and its partners drilling and refining the Agua Rica gold and copper deposit over the years. Most of the work was done in the late 1990s, with modern technology. As a result, the size of the deposit at Agua Rica is well proven. And Agua Rica could be exploited cheaply, simply by connecting Agua Rica to Alumbrera with a conveyor belt.
As you probably know, there are two big risks in mineral pro-duction: discovery and feasibility. In Agua Rica, both of these risks are controlled...
Enter David Cohen who had worked with Pablo for a number of years as a joint venture partner. David got on the phone, called a few wealthy friends, and put together a deal to buy BHP’s stake in Agua Rica for only $12.6 million...
David got such a good price, he was able to borrow money from the second largest bank in Germany, HVB, as part of the financing. As you know, major commercial banks don’t typically lend money to exploration mining companies - but this is an extremely special situation.
You see, owning BHP’s former stake in Alumbrera gives David and Pablo the cash flow they need to develop Agua Rica without having to raise a lot of additional equity. In fact, using cash provided by Alumbrera, they’ve already paid back the German bank.
At current prices, Agua Rica contains around $40 billion worth of minerals. But their stock is trading at only $3.00 per share, a value that’s based solely on its current copper and gold production at Alumbrera. Without giving away too much, I can tell you that if the stock increased in price by a factor of 10, it would probably still be a reasonable buy, given the size of the Agua Rica reserves and its proximity to Alumbrera’s production equipment...
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From NTO website:
Quick Facts:
100% Northern Orion owned
Located in northwest Argentina
Only 34 km (20 miles) from Alumbrera
Drill defined metal inventory of 21.8 billion pounds of copper, 13.3 million ounces of gold and 1.7 billion pounds of molybdenum
Estimated mine life of 23 years
Agua Rica's estimated rock value makes it one of the world's most significant undeveloped copper/gold/moly deposits known today
No back-in rights to any third party
More than $55 million spent by Northern Orion and BHP Billiton between 1994 and 2002 to define the deposit's resource and complete redevelopment
More than 176 holes drilled in excess of 65,000 metres
Northern Orion and BHP spent more than $55 million U.S. between 1994 and 2002 to define the deposit's resource and complete pre-development studies over the eight years that Agua Rica was developed. This work has largely mitigated the geological, construction and operation risks. The project is now advanced to the point where Northern Orion could bring Agua Rica into commercial production within four years.
northernorion.com
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