the smoking gun.First of all, a big thanks to thorgb1 for not only today's article, but for his countless number of excellent contributions lately.
Personally I consider today's article to be the proverbial smoking gun of this story.
I've had this RMC down to a binary conclusion. One, the deposit is too small for Freeports interest and they are slowing down exploration with a hope of unloading it on a smaller mid-tier type producer or possibly walking away from it altogether. Or two, they have all the info they need, and are moving forward on a course to buy out the property. I honestly don't see any middle ground between these two extreme outcomes.
Shuttering the drills and possibly shipping them elsewhere is far too expensive to do for a nonsensical reason like hitting an arbitrary budget ceiling. In the exploration game, if you are into something great, money is always found PERIOD. You drill it until it is drilled out.
So given the course that Freeport is taking (slowing the drilling down from 8 rigs to 1) from a logical stand point makes the conclusion completely binary, either very good or very bad. Obviously figuring out which way she goes and getting it right has a significant financial reward attached.
In order to tackle the question at hand I went back to the basics. Drew up the deposit. Drew up the cross-sections of the recently drilled 3 parallel fences that have the most recent holes fanning through the high grade etc. Re-reading all I could find on the different types of cave mining with a mind of establishing economic thresholds. Reading up on the new "flash" smelter at Bor that is being built to tackle the arsenic emissions from enargite that is present in this and the other deposits of the Bor region. All of this done in attempting to put myself in Freeports position, hoping to obvious of which way they are leaning.
From all of this, everything except the actual model of the deposit I drew up pretty much clearly pointed towards a thumbs up. The problem with the deposit is not enough info is available. The 21 assays we are waiting on are crucial, especially when you consider that this number of pending assays is almost double that of what we have gotten back thus far to work with.
To the north east, where you would think they would be exclusively going after the porphyry there are a bunch of holes listed as apparently targeting the HS zone as well. Some of these holes are a good 500m away from what I would call the sweet spot, so any catching of the HS zone that far out would be a monumental game changer. Then there are the numerous holes in the 40's (38,41,43,44,45,46,47 and 48) that will give us a definitive width on the high grade sweet spot. All of these holes are of paramount importance in defining what we have to date. Without them makes valuing the deposit futile.
As I'm told, the Freeport people operating the program are able to eyeball the core to within .2% copper or something of that nature. In other words, they know exactly what they have in these pending holes and we unfortunately do not. Given that they have this advantage over us, the only way they could buyout Reservoir is to stop drilling and let the assays catch up, so that everyone involved is fully informed and on the same page. My hope has been over the last week and a bit that this is what is happening. That they are going to let all the assays come out and then with the cards all on the table make an offer for Reservoir.
What keeps me up at night is wondering if I'm wrong. Wondering if the majority of the holes to the north east missed. Wondering if the confirmatory 3 parallel fences of fanned holes show some sort of weird lack of continuity or something.
I, as I'm sure all of you, have seen the Freeport presentations. The ones listing the only Greenfield exploration center as Serbia, the newer slide showing the increase in the exploration budget for 2014 being designated to "other" where "other" would seem to be Serbia. We all saw the articles a few weeks back from Serbian sources claiming Freeport had asked to have the new Bor flash smelter's capacity raised from 80,000 to 120,000tonnes etc. But nothing thus far comes close to today's smoking gun. I've got the other articles on the topic below. The Serbian Prime Minister quoted repeatedly saying that Freeport planned to as much as almost triple their exploration spending in his country in the next year. Another article speaking to Freeport planning to use the new Bor smelter. In my mind it is beyond any doubt that Freeport is taking this project forward expeditiously. If they are doing so, why cost themselves big bucks to shutter the drills? Why would they want to do anymore work while giving Reservoir a free ride? Why would they want to spend 100% of $40million or whatever when they only own 75% of the project?
In my mind, the articles below are the smoking gun. We are bought out sometime between now and Christmas.
https://www.b92.net/eng/news/business.php?yyyy=2013&mm=09&dd=18&nav_id=87701
https://www.balkans.com/open-news.php?uniquenumber=182048
https://inserbia.info/news/2013/09/freeport-general-electric-chevron-most-interesting-partners-for-serbia/