Denver gold forum observations Hopefully everyone had a chance to watch the Silvercrest presentation.
Here are a few of my observations:
Santa Elena mine expansion is now looking at $65 million, not the $84 million previously stated by the company. Of that $65 million, $5 million has already been paid for already. The company feels they can pay for the expansion on its own but might need a little bit more so that it is not restricted. It has been assumed that Sandstorm would buy the ug stream, but that may not be the case because of less gold in the underground phase. I asked Fred Cooper if Sandstorm would get the stream from the leachpad and he said only if they participate in the ug expansion. In the video, it was stated that there will be about $100 million in the leachpad. I don't know how much is gold is in the leachpad, but I'm pretty sure there is significant amounts. Based on the resource page from the website, the underground protion has about 2/3 the amount of gold as the open pit. Of course, this can change but that is what is on the website. My take is that the underground and the leachpad could end up being about the same resource as the open pit. If that is the case, then I would have to assume that Sandstorm would do the deal. They would be contributing about $13 million for the underground portion and I think that would be all that the company would need to get into the next phase, and no hedging.
About the leachpad, $100 million with not much effort, think about that!! I mean, you don't have to mine it, just process it. So what would the cash cost be on this $100 million resource.