rdww & Bearcat & Peter et al:
The frustration out there is palpable. There's some of the same here as well. Not because we haven't found the great deposit, but because we've been Busanged (yeah, I'm sick of that excuse too but it has hurt one of our most important projects as well as our share price)... we've had two partners recommend continuation of the projects, forecast that we will have a mine at both of them and then, for their own internal corporate reasons, they've walked away.
Meanwhile, a year ago, we had a market that paid for ground -- regardless of what was on it but because it was near something else -- and a market that expected 10-20-30-70 million ounce deposits. Production was secondary. Everyone wanted Blue Sky. Today, the market's punishing you if you haven't got production or the immediate promise of production. Fair enough. Markets change. But the fundamentals of this company have not changed. We are an exploration company looking for significant mineral deposits in several prospective areas. Besides the few "accidents" out there -- the Voisey's Bay, where a geologist picked up on something that had been seen and walked away from by several geologists or the Arequipa's that went through ten properties before it hit the jackpot with Barrick or the Goldstrike which had been picked over for years before one geo took a challenge and said to break the rules and drill through the granite -- I'd love to hear about the list of companies that have, in less than four years, come up with a world-class deposit, starting from grass roots exploration. Yes, they do exist. But normally, a deposit takes $10- to $15-million a year for ten years to define. This company has existed for four years. We have not found an elephant, but we have found the beginnings of a few things that could be elephants.
rdww notes Washington. Interesting point. We have done with Washington exactly what we said we would. We've spent less than $500,000 to test it and we've come up with something significant enough at Palmer Mountain that I've had calls from a few majors interested enough to sign confidentiality agreements because they want more data. We're spending almost nothing on it at present and it's possible we'll get a JV out of it. It may be nothing in the end but it would be irresponsible to walk now.
Where we have NOT gone is nowhere.
You're right. I can't tell you where the elephants are. But I can tell you that this company has a technical team I'd put up against any other. That's an opinion that has been supported by Barrick and Rio Algom and several others as well. We had one senior guy who wasn't pulling his weight and he's gone. Noone's perfect. But these guys are as good as almost everyone out there and better than the majority. That's why we've got the Northern Porphyry Copper Belt project, for example. There, we're spending a million or so testing it after coming up with an extremely innovative target identification technique that cost us almost nothing. We've got several formal CA's and signed expressions of interest. Several others have turned us down because they consider it too grass roots. Even though we've got geochem and geophysics indicating ten good targets on six of our ten properties... so far. This is elephant country and, at minimal cost, we've got a piece of it.
We're also working with a major who's interested in a possible JV at El Indio. We're again, spending next to nothing.
What should we do with Santa Cruz, Vanguardia which has been described by a couple of independent geologists who have looked at the project -- including guys from Rio Algom, who recommended that they continue with it before their president said the company was no longer looking for gold -- that this has the prospectivity of Nevada 30-40 years ago. Yes, DD and property tours are underway now and we may or may not get a JV partner. Meanwhile, there is too much there to ignor so we are operating on a budget of about one-third of what we want to there.
Then there's Indonesia -- which everyone hates -- where we have found a very large, very rich, very promising area with strong gold and silver values. Our seventh generation COWs are in the hands of the president for signing, which is expected to/could be signed within weeks. Should Barrick and Yamana walk from that, even though no respectable geologist would walk away from the surface values and geology we're finding?
What about PNG? That HAS been a problem, because our partner, the property owner, turned out to not be able to run a proper exploration program. So we've taken it over and hired several ex-pat geos, fired the drill contractor and we've gone back to basics because there is mineable gold there, a defined 520,000 ounce resource and we need to know how much more there is. We're earned 30% and will hit 40% next month.
We have an Argentine company that is testing the copper oxide deposit at Neuquen. Not a company maker, but a good chance to see a project turned into production. Same with Los Petisos. Mineable sulfur looking for a customer. Pure economics.
Oh, yeah. Paraguay. We're drilling there and we have a company that is very serious about doing a JV. I don't know whether it will come together but I do know you don't walk on that either.
In the end, what I am hearing from many investors is "Where's the multi-million ounce deposit?" Fair enough. My answer can only be this: We are looking for it/them. As for, " Focus on one thing..." I say, exploration is a numbers game in many ways. If an exploration company could look at something in the early stages and know that it was going to turn into a million ounce deposit, then there'd be a helluva lot more geos out of work. Finding a deposit, let alone a world-class deposit, takes time, money and luck. Yamana Resources is putting in the time, spending the money, making the effort AND we're doing it in several areas where one hit can be a company-maker. Remember, if we had listened to the mass sentiment a year ago, we would have thrown away everything except GOLD and INDONESIA. Now wouldn't THAT have been a mistake?
I'm sorry the number of projects bothers some people. I'm sorry the story is a complex one. I'm sorry the market has changed its mind and that the gold price has fallen. I'm sorry we haven't announced a world-class deposit yet. I'm sorry two partners walked. I'm sorry the investing public thinks that Indonesia is a waste of time. I'm sorry we are doing a financing in the low $1 range.
What I'm NOT sorry about is that I have given up on a successful consulting business, moved my two teenagers and my wife, with her business, sold my home and moved to the US so that I can spend two weeks a month on the road and 60 to 70 hours a week working for this company and dealing with investors and working on JVs, because this company is special.
It may or may not succeed. But it will not be for lack of honesty or talent or commitment or effort.
Cheers
Greg |
