Hi EC:
Good comments and delighted to see that you are digging into the situation. I look forward to reading anything you uncover about this developing "gold camp". You have expertise that few have and your comments on this situation are most valuable to me.
I have to say that some of your points are hard for me to accept.
Ventanna as close to production as Greystar?
- Ventanna has not yet produced/provided a 43-101 "estimate", hence it is difficult to know with any conviction what the company actually has as far as an ore body is concerned.
- A careful examination and mapping of the drill results to this point in time suggest that the ore body is deep, relatively high grade and (so far) not very large. Yes it might eventually "flesh out" but the fact that the company has been very "tentative" in its step-out drilling (especially with "up to ten rigs on site") and has instead done a fair amount of "in-fill drilling", suggests to many that the current goal is to provide more "good drill holes" rather than to outline a solid deposit.
- So far, Ventanna has provided only a single, fairly sketchy metallurgy report and it was not encouraging (copper involvement).
GSL's pre-feasibility report has long since been published and the main feasibility report is well progressed. Ventanna does not yet have even the basic facts in hand from which to start a feasibility report. Hard to move to production without a feasibility study in hand.
- So far, Ventanna has produced drill results.... some good holes, but all reported as "down hole" and even the analysts who like the company warn that the results should be cut back rather dramatically.
- As far as I can tell, Ventanna does not control (never mind own) nearby property on which it could build out the required mine facilities
An examination and mapping of VEN's drill results do not suggest a "near surface" underground mine to me, but I am no expert on this topic. Certainly the good drill hole results are located at considerable depth and at significant underground distance from the valley. And there remains the water and indigenous miner problems to be dealt with.
- Note that the company is drilling well up slope (in very difficult terrain, which has caused the company to abandon close to 10 percent of its drill holes). A close examination of the local area suggests that much of the more reasonable terrain is already occupied. Personally, I can't see how Ventanna can mine in this area without major difficulties, but of course, lots of dough can "move mountains" if sufficiently motivated. (g)
I also disagree with the idea that GSL might have difficulty raising the dough required to get to production. GSL has the World Bank" as both an investor and a future lender (about $150.0 million has been pledged already). It is sitting on $100.0 million in cash and is starting to garner serious institutional and bank interest. I also think large players are starting to "kick the tires" of most of the companies in the area. GSL looks like the logical main building block if "consolidation" is being considered by outside parties.
As noted above, I am delighted you are digging into this situation. I sure can benefit from the views of guys with better mining/geology/metallurgy background than my less-than-modest skills in this arena. Keep them coming.
Best,
Earlie |
