Verde Grande acquisitionI have taken some time to look into the new acquistion in greater detail, and I like what I see. There is not much information to work with on the public record yet, but based on the text of the news, the historic deposit is located near surface and is suitable for an open-pit mine development. With nearly half a million tonnes of historic resources that grade roughly 2% copper and 3 ounces silver per tonne, I think that is of high enough grade to consider low cost, smaller-scale mining ops. Since there is a contract mill located nearby in the city of Hermasillo, it would come down to a quarry operation trucking ore to a mill.
I expect that the company will be able to source info from the past operators of the mine to get some data on the recovery percentage for the copper. My guess is that even 75% copper and 60% silver efficiency would be enough to support a profitable operation, even running only 50-100 tpd, including trucking costs and contract milling and recovery expenses.
The data from sampling in the old workings indicates that significant zinc is also hosted within the mineralization, so it is possible that further economic credits could be generated with a zn-ag concentrate as well.
The bottom line as I see it is that YLL has a tight capital structure with only 33 million shares fully diluted, and currently trades with a F/D market cap of only about $10 million. If the Verde Grande Mine acquisition was the only project controlled by the company, it would still be undervalued at the current share price, IMO. Given the additional potential represented by JVs with IPT and EXM, and the wholly owned Carol Property in Sonora, YLL is stupid cheap.
I think most investors are probably frustrated with the way the company has been lagging the market so far, but the stock has been held back while a large chunk of cheap paper has been sold off for the last several months. With that out of the way, I think the way ahead is clear for a possible upside run. That could come as positive exploration results are reported at any of the projects under exploration right now. I think we can look forward to a tailwind sometime in the late summer - early fall months ahead, as money flows back into the sector and perhaps other Mexico juniors present positive news to excite the market. So I remain optimistic going forward, and expect to hear some development plans from YLL about the Verde Grande, that may build even further asset value for the company. Patience is an over-used word for mining stocks, but I think it is warranted here.
cheers!
COACH247
Voluntary disclosure: I own shares of YLL and have not been a seller at any point since I began discussing the stock on the forums. I have no relationship with the company.