Mining M&A revival favors “quality” Juniors Marc Davis - BNW Sounds like Exeter Resource? Several other analysts point to Exeter (TSX: XRC) (NYSE-MKT: XRA) as a good example of such a company. It has over $30 million in the bank, no debt, and benefits from a successful management team that sold another of its gold/silver exploration companies, Extorre Gold Mines, to mining heavyweight Yamana Gold for $414 million in 2012.
Most importantly, Exeter owns by far the largest undeveloped gold discovery in Latin America in recent years – the sprawling Caspiche gold-copper deposit in Chile – which hosts a massive resource of 37.9 million ounces of gold ‘equivalent’ ounces. (The ‘equivalent’ term refers to its combined gold, silver and copper content).
What the mining industry is yet to acknowledge is the viability of developing the Caspiche oxide resources first, to yield 1.7 million ounces of gold over a ten-year horizon.Oxide gold deposits don’t have to be high grade – none are. They work because they are typically shallow enough for the mining and processing costs to be very low. This compensates for the modest grades.
Much of the near-surface oxide cap’s likely appeal is the fact that Exeter reports that it can be mined for the projected low cash cost of $589 an ounce of gold. By comparison, most of the world’s major miners are paying upwards of $1,000 an ounce to extract gold, which makes for perilously low profit margins.
Marc Davis - BNWnews.ca | February 17, 2015