Atna Res Ltd ATNAQ

RE: Now I remember....

[jsnfernley]

Barrick is not just going to walk away from Pinson.  Period.

First of all, there is a clause in the project option that Atna could buy out their interest for $15m.  This is what Casey, Kaiser, Rule, etc. thought would happen based on the 5 million ounce threshhold "rule" they all insisted that Barrick has.  They were wrong, regarding both the Barrick decision and the 5m oz rule.

Look at Barrick's production schedule on their web site.  Look at each and every one of their mines.  There is no way that every one of these mines had 5m oz when the decision to produce was made.  They have a number of small mines.  It's not their preference, but they'll make money where they can.  The 5m oz thought probably pertains to new mines where they own a majority if not the entire property, since the cost of the engineering that goes into just making a production decision alone is outrageous.  Most major mines have both an oxide and sulphide deposit, and the sulphides are more costly to process if they can't be leached (which would probably be at a reduced recovery rate even if they could).  The autoclaves and roasters necessary to process sulphides are very costly compared to an open pit heap leach operation.

Barrick just bought out Yamana's interest in the Rossi/Storm JV.  The Pinson JV is almost a perfect carbon copy of the Rossi/Storm situation--a HG underground sulphide Au deposit, accessed through an existing open pit, near existing processing facilities, with significant development work (adits, tunnels, infrastructure) that can be utilized to start production quickly.  Barrick bought out Yamana's interest (formerly Meridian's) for $30m, or less than $40 per ounce of Reserves.  The 43-101 report is available under Meridian's company profile on Sedar.

Barrick isn't going to walk away from at least a $45m IF they decide they don't want Pinson ($15m contractual buyout price plus the $30m they invested).  What they do will depend on a number of factors.  At the last conference call Atna thought that Barrick was seriously studying the superpit concept, and that engineering and permitting would take 3 years before production could commence.  They also thought that the underground mining option could be engineered and permitted in 6 months, but that they didn't think that Barrick would mine the underground if they were going superpit (they said something about eating your own heart out).

The only thing I'm certain of is that Barrick knows what its possible plans are, and they aren't telling us yet.  But just walk away?  I seriously doubt it.