RE: RE: RE: Chen Lin on Orvana Feb 13th the problem with miners are the rising costs .. ORV is a good stock if they are able lower cash-costs to700$/oz.. so ORV would be very profitable with POG 1300$
For a number of reasons Orvana will lower costs:
1) Orvana is through its capital expenditure phase of refurbishing both its operating mines.
2) Orvana can be flexible with its forward capital expenditures now.
3) Orvana has a hedge setting a floor of $1,550.00 on some of its gold.
4) A good percentage of its income is from copper that is counter cyclical to gold.
5) Orvana's production costs are close to the industry average and still has room for improvement and management is in a cost reduction mode to do that.
6) Gold grades are improving at EVBC and will continue to do so with the shaft in operation now.
7) Recoveries in Bolivia will improve as they work through the upper oxide and transition levels and get to the sulphide ores.
8) Staff efficiencies are becoming highly optimized as the learning curve with two essentially new operations have been worked through and will continue to become more highly refined as staff settle into a well oiled machine.
9) With the new shaft EVBC is extracting enough ore to increase production and some of the mill equipment is already sized to accomodate increased production. An increase is planned and it can be achieved at a reasonably low capex with a good deal of the infrastructure already in place.
10) Labour disruptions are not likely given the economic times with high unemployment. Inflation is still under control. Orvana's mines are located in less expensive rural areas and less politically charged areas. EVBC is located in the Sierra De Begega mountain farming area (type "Begega, Spain" into Google Earth to get a good three dimensional view of the mine.). Don Mario is located in the far eastern jungle area of Bolivia in the middle of no where far away from the populated and politically charged main mining camps in the Altiplano of Bolivia.
11) Orvana made a number of management staff improvements.