TSXV:AUN.H - Post by User
Comment by
MontyHighon Aug 12, 2008 9:00am
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Post# 15376122
RE: $45 MILLION
RE: $45 MILLION
Just a little clarification.
They only have %80 of La Negra, so they sold 62.5% of their portion of La Negra's silver production. That's 20% of their production from La Negra.
La Negra has been a primarily zinc / lead mine in the past and the price of zinc is now way, way down ($.75).
So, the big uncertainties with AUN now are:
(a) Get financing for Shafter - I know they have an understanding with SLW, but the falling price of silver reduces their negotiating position with SLW. Will they be able to get a deal done?
(b) Demonstrate that La Negra can remain profitable given falling (or fallen) zinc, lead and copper prices.
Aurcana looks really undervalued to me, but there is some real uncertainty to be dealt with. I'm long. Its my second largest position.
The stock market is (once again) pricing in a global slow-down or recession and further reductions copper (at least) and probably zinc and lead prices. This impacts La Negra's profitability significantly.
See what's happened to emerging zinc producers (BN, ADA, SRZ)? Aurcana, if they hadn't done the Shafter deal, might be trading in the 20s or teens right now.
Monty