MOA's Bobby's Pond vs. AUR's Duck PondI am posting this today to review since the numbers are
absolutely staggering. Read to the bottom and
especially note the last sentence in the NR.
Duck Pond has just 4 times the "current" Bobby's Pond
tonnage at a little richer grade with copper being the
primary metal vs. Zinc at BP. New drilling at Bobby's Pond has been recommend by PRA who just completed a 43-101 on the resource using the latest data available. Increased tonnage/grade is likely from additional site work.
The numbers below show that at today's prices AUR would
generate almost $300 million each year for 6.3 to 8
years from just the copper and zinc. Silver and Gold
will add significantly to this. Their capital
investment will be around $90 million and the mill's
operational date is this year..
Since MOA acquired Bobby's Pond, Zinc has nearly
tripled in price to US$1.40 per pound and Copper way
over doubled to US$3.30 per pound. The long term trend
appears to favour increasing prices for at least
several more years.
I believe that there are people within AUR that currently have an
interest in finding additional material to process for Duck Pond. The $90 million mill will have a much longer life than their current resource. Bobby's Pond is likely the quickest(easiest?) new area from which additional tonnage could flow to their mill. It is less that 20 miles away over an all weather road. AUR has been focused on a huge project in Chile($336 million ungrade), but once Duck Pond starts production, I believe they will be thinking more along the lines I have just mentioned.
MOA has a resource, 100% within their control, that
AUR may want.
Bobby's Pond story has to get told to a wider audience
than it has to date. All shareholders need understand the potential to sing its praises loudly. Management has their responsibilites, but shareholders need also to work for themselves.
Here is the New Release.
****************
Aur enters forward sales contract for zinc at Duck
Pond
2006-01-23 17:16 ET - News Release
Dr. James Gill reports
AUR ENTERS INTO FORWARD SALES CONTRACTS TO ENSURE ZINC
REVENUES EXCEED THE OPERATING COSTS AT ITS NEW DUCK
POND COPPER-ZINC MINE IN NEWFOUNDLAND
Aur Resources Inc. has entered into forward sales
contracts for 75 per cent of the scheduled zinc
production from its wholly owned Duck Pond
copper-zinc-silver-gold deposit located in central
Newfoundland, Canada. The forward sales contracts
total 116,300 tonnes of zinc to be delivered on an
equal monthly basis during the period July, 2007,
through December, 2011. The sale prices are 84.2 cents
per pound in 2007, 78.2 cents per pound in 2008, 71.9
cents per pound in 2009, 67.1 cents per pound in 2010
and 63.2 cents per pound in 2011. The weighted average
sales price is $1,580 per tonne which is equivalent to
approximately 71.6 cents per pound.
The Duck Pond mine is currently being constructed and
is on schedule to begin production in the fourth
quarter of 2006. The mine is scheduled to produce
approximately 41 million pounds of copper and 76
million pounds of zinc annually for a period of 6.3 to
eight years.
This hedge transaction has ensured that Aur will
receive $55.5-million (U.S.) of additional revenue
from the contracted zinc sales by comparison with the
50 cents per pound zinc price used in the feasibility
study upon which the decision to develop the Duck Pond
deposit was made. This additional revenue is
approximately 70 per cent of the total capital
development costs of $92-million provided in the
feasibility study for Duck Pond. The transaction
covers 75 per cent of Aur's planned zinc production
from July, 2007, through December, 2011; the remaining
25 per cent of zinc production during this period,
together with all zinc production before and after
this period, remains unhedged.
Jim Gill, president and chief executive officer of
Aur, said that: "As zinc is a byproduct metal for Aur,
we are taking advantage of the very strong forward
zinc prices to enhance Duck Pond revenues and improve
the return on our capital investment. We are pleased
that the annual zinc revenues alone will now exceed
the total mine operating costs with all the copper and
precious metal revenues providing additional free cash
flow.
*****************
C.Gert