RE: This Co. will be immensely profitable . If Atico was a straight old exploraton play I probably wouldn't have purchased shares, but what got me excited about this play was the fact that they can buy a 90% interest in an operating mine. We need to consider that:
- permitting a mine takes a long time, whereas El Roble has its permits in place
- building a tailings facility, constructing a ramp, installation of a mill, etc., would probably cost far in excess of the $14 million Atico can buy in for. I can't think of a single junior that could get their deposit up and running at a cost of $14 million. At the bare minimum they are looking at $20 - $30 million in capital and they haev to have the ore milled at a third party site, which adds significant operating costs.
- G+A and working capital amounts necessary to build a mine are probably somewhere in the range of $3 - $5 million a year, and it would probably take at least a year and a half to two years to get a feasibility study, PFS, etc., completed... savings of $6 - $10 million
The only thing ATY management has to concern themselves with is finding more ore. Not a lot of juniors are in this position.
The only issue with ATY that I can foresee is the fact that some of the mining equipment and the mill may require refurbishments. That said, considering the mill is currently operational, I would think that it is not in too bad of shape. Either way, refurbishing mining equipment and a mill I would venture to guess is a lot cheaper than buying it new. They are kind of in a similar situation as Flinders Resources... yes it may cost them $20 - $30 million to refurbish everything, but the cost of rebuilding that infrastructure and equipment in todays dollars would be $80 - $100 million.
Don't underestimate the value of the infrastructure and equipment in place, imho that is why this Company should be trading closer to $2.00 / share.