RE:RE:RE:RE:RE:RE:RE:RE:Way to cheap Horsepower project in Argentina they are looking to JV
The Argentina project is the reason I like orvana so much. I think it is a potential company maker, 3 years out. These are some notes I made from Juan's PDAC interview in march of this year:
>> Argentina: 4000 meters above sea level. 25 miles from 2 big infrastructure driven projects: Veladero mine and Pacua Lama.
Planning to put a 60,000 oz /yr operating unit who is going to be mining from 0-100 meters depth which is open pit with a strip ratio less than one because it is the top of a hill. It is going to be heap leaching and merril crowe for dore bars. Cash cost is going to be $700 and the all in is going to be below $750. It is going to be a very profitable project. In the process of doing some drilling campaigns to get infill drilling completed. And then they will start construction which should be very simple, looking at 2-3 years max for it to go online.
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Now Orvana is a company that managed to build a mine in Bolivia on their own. And the cash flow from the Bolivia mine allowed them to invest $200 million in acquiring and building a mine in Spain, again on their own. If the capex to build a 60,000 oz heap leach mine in Argentina is around US$100 million, I fail to see why this too cannot be built by Orvana on their own. This time the cash flow from the SART project in Bolivia can be used to help finance the Argentina mine, along with Orvana's ability to borrow money from banks at low costs. Now despite Orvana's demonstrated abilities to build mines on their own, if they were to JV the Argentina project, it better be one heck of a good deal for Orvana, or I would need to question my thesis for owning this company as a long term investment (3-5 years).
Why is the Argentina project promising ? It is only a few miles away from 2 world class mines. Also a previous JV partner Gold Fields has characterized the Taguas project as "very prospective".