UMJ @ the VRICIn the last couple of days, I had the pleasure of speaking with Mr. Sutcliffe and Mr. Bache at the Vancouver Resource Investors Conference. They were very open to my questions and gave a clear plan of action.
Currently they are in talks with Xstrata and would like to increase tonnage being processed. I think this would be a nice boost to already good cash flows, but of course the toll slippage costs is not optimal. On the possibility of acquiring a refurbished mill with 2500tpd capacity, they said that the cost estimate is about $70-80M. To fund this, they would like to do an equity financing if or when the market cap can reach $50-60M or 0.65-0.80 per share. It is their goal to further promote UMJ and try to get the SP to better reflect this fairer valuation. Bringing in a strategic partner like Xstrata to help financing is also in the cards.
In terms of drilling, Mr. Sutcliffe pointed out a few strategic areas that are being explored. He thinks that the Shakespeare resources could increase from roughly 12Mt to 25Mt and also believes that the current resource grades are conservative by 12%. After asking when I should expect some drill results, Mr. Bache said in about 2-3 weeks. A follow up question I had was on Inspiration Mining's involvement and Mr. Bache more or less confirmed my thoughts and added a few other interesting words. I am not going to quote him, but I'll just say ISM doesn't bring much value to the company and ISM trading near it's cash + cash equivalents alone is one thing to note.
I'm finding that the trading activity in both UMJ and ISM is very interesting. The volatility and price movements are big and I noticed that both have traded inversely to one another on several days. It looks like there is some sort of speculation play going on in the short term.