RE: Fundamentals!! Hey Laroplex...
Not that easy my friend...the market is nervous...and for good reason. I have gone to the sidelines in order to perserve capital and wait this out for now. I will most definitely track the story and I am never that far away.
Here is what I think may be the problem that the market has picked up on and is cause for concern...it is difficult to now exactly how this will play out over the next couple of weeks as more investors pick up on it and may or may not act negatively.
We all know about the Breccia Zone and know for a fact that it is the core of the Ana Paula Property and any Open Pit Scenario moving forward....we must take our focus away from it and look to the other pieces of the puzzle that will make this project work. The latest release did not offer any good support...let us take a look.
First of all...as I mentioned before moving away from holes AP-11-37 & AP-11-71 to the East offered an opportunity for expansion and would give us a good idea of the mineralization in that direction to support the Open Pit Parameters....hole AP-12-100 was a big disappointment and it offered us our first look of the structure moving to the East. Mineralization was at or close to surface in AP-11-37 & AP-11-71 and it looked very promising...not to be!
To the West...AP-12-98...total "duster"....again...as stated before...mineralization is scarce moving in this direction.
AP-11-103...they should of hit...another "duster"...we need mineralization moving North to support the Open Pit and reduce dilution...this hole was at the Northern limits of the Open Pit parameters in my model that I used as an example.
AP-12-97...this hole was drilled from West to East to test the Western Limits of the Breccia Zone and within my Open Pit Model....they did hit...but...the mineralization was discovered from 350 metres to 770 metres downhole and is well out of the Model Parameters...to get to it they would have to expand the Open Pit laterally another 250 to 400 meters in both directions. Using the factual drilling results to date the structure moving East & West will not support the economics and thus far we are looking at waste moving in those directions...the strip ratio will be much too high if they had to move out further than the 250 metres that I used in my model.
Moving South...AP-12-99...this tested the Southern Limits of my Open Pit Model...very disappointing.
Dilution....this is the problem at this time. If you followed my posts regarding my Open Pit Model I used 1 g/t...speculating due to insufficient data for the Mineralization moving away from the Breccia Zone to the North & South. It appears that it may have to be revised lower and I believe the market has picked up on it.
Strip Ratio: It appears that the waste to ore is creeping up which will affect the economics in a significant manner....in otherwords...how many tonnes of waste do you have to remove to get at one tonne of ore.
Believe me, I have spent a lot of time on this and at this time it is prudent to be cautious...we my move much lower at which time I will review the circumstances.
If I am wrong...I will begin to build my position once more...my "gut" is telling me that I am not wrong....the market action is suggesting that something is wrong.
Digger144
P.S. It is always very difficult to make investment decisions...however, there is a red flag waving and we must pay attention.
All the best!