Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Winter in the Great White North -- Ignore unavailable to you. Want to Upgrade?

To: Condor who wrote (6320)	4/11/2005 12:30:05 PM
From: E. Charters	Read Replies (1) \| Respond to of 8273

I have not researched AUA at all. Most of the large low grade moly properties do not impress. They are land grabs without mining expertise for the most part. If they are going to produce they need to have contracts to buy. All base metal is a producer-buyer's market with an uncertain future that only major suppliers and buyers have any inkling of. And even they don't know for sure. Before you build a mill you had better have contracts. Some open pits that don't involve moving large mts. in Canada might make it, provided there is some sort of feasibility done that is positive at a moly price that is realistic for the next 7 years. That prospective moly price had better be figured south of 12 dollars if you ask me. Really high moly prices won't last forever. If you want to know if an open pit mine will work you have to drill ALL the holes before you know. You cannot guess at the ore body. Its total size and grade have to be known to plan a pit. It takes a minimum of ten engineers, probably several hundred holes and a ore hardness and millability study to do fease an open pit of any dimension. That takes minimum one year. Until the computer finishes crunching all the numbers you don't know if it is positive or negative. That will cost, with drilling 20 million dollars for a realistic medium-scale pit. There are almost no already-drilled-off advanced feasibility "pits" in North America -- there may be a few exceptions. There may also be prospective pits with a few holes in them but they are hardly feasibility stage. At 3 pounds moly per ton, in an open pit, it may be doable, but at ten dollar moly it is tough. You need 5 thousand tons per day to reach any sort of light on throughput cost. But to plan at too low a price, it is dicey. You cut off too much potential ore. Planning an open pit optimally you need to know your true price ten years out, right to payback. Otherwise what you may mine may not be ore. If your price swings too much in the first few years, you may not even be into paying ore when the price tanks, just overburden. That is why during a volatile metal price swing the only properties that make sense are smaller ones with lower capex and quicker start up and payback. EC<:-}