Alexandria`s Current Asset positionAlexandria`s March 1`15 Corp Presentation (the latest) shows Current Asset of $2.6 million. This was prior to incorporating Murgor`s numbers into all of the various Alexandria totals. However, the $2.6 million Current Asset total does likely include an amount for Quebec refundable tax credits (Alexandria gets back about 30% of exploration expenses from the Quebec government).
With the Murgor acquisition now closed, I think we can now add in the $300K of investments in other juniors held by Murgor. I think this will bring Alexandria`s Current Asset total to around $2.9 million, less any expenses incurred from March 1st to now.
Of note, the 3 juniors included in the $300K marketable securities amount are:
- Cartier Resources - valued currently at around $55K
- Eagle Hill Exploration - $190K value
- Gold Royalties (soon to be Sandstorm Gold, via acquisition) - $56K value
Of note, separately, Alexandria also holds a few shares in Integra Gold. In 2009, Alexandria sold a tiny piece of land to Integra and received 500K shares (pre-Integra share consolidation) plus a bit of cash and a 2% NSR in that particular piece of land. In 2010, Integra consolidated its shares (10 to 1) and changed its name from Kalahari Resources to Integra Gold. Thus, Alexandria`s 500K shares became 50K shares, where it stands today. Alexandria also still holds the 2% NSR - 1% can be bought out by Integra for $1 million. On Dec. 2`14, Integra Gold made this annoucement:
``Integra Gold Condemnation Drilling Discovers Triangle Zone Extension 200 Meters West of Deposit, Multiple Mineralized Zones intersected including 101.85 g/t Gold over 1.6 Meters``
I am almost 100% sure that the 200m in between this drill hole hit and the main Triangle mineralized zone is on the piece of land Alexandria sold to Integra. It is also possible that the actual drill hole hit might be on that piece of land also, but I am less sure about that. A bit of the already defined mineralized main zone might be on that piece of land, as well. Integra is currently drilling this 200m area. If it shows to be well mineralized then our 2% NSR will become more valuable. The Triangle Zone is Integra`s main zone (highest grade and thickest width, and likely will be its largest zone). They are working to bringing it into production. If the current drill holes are successful (on the 200m area), Integra might look to buyback the first 1% NSR from Alexandria for $1 million.
Additionally, hopefully Alexandria can convince Agnico to buy the Orenada property (after the upcoming Orenada resource recalc.). If it occurs, it would likely substantially replenish Alexandria`s treasury and enable substantial work to be done on its high potential exploration properties (i.e. Matachewan, Red Lake and more work at Cadillac Break), in an effort to discover the elephant.
Until then, the $2.6 ($2.9) million Current Asset amount should be plenty enough for Alexandria to carry out its current work plans.
I don`t see the Sleepy PEA evaluation as costing too much more than, say,
$250K, if its anything like PEA`s performed by other companies. A full feasibility study requires Indicated resources, but not a PEA. A PEA only needs Inferred resources, which Sleepy already has. Thus, no further drilling is required for the PEA to be completed. My ideal vision for the project would be: hopefully completion of the PEA will lead to signing up a JV partner (one of the mill owners perhaps). The JV partner can then earn in on the JV by spending about $2 million on infill drilling to move the resource from Inferred to Indicated. Then, also, perhaps another million on stepout drilling in an attempt to increase the resource total. Indicated resource would then enable a full feasibility study to be performed. A bankable feasibility study can only be performed using Indicated resource (or above), not Inferred, hence the need for an infill drill program. A bankable feasibility will be necessary if project debt financing will be required, which will likely be the case. In addition to paying for the approx. $2 million for infill drilling and $1 million for stepout drilling, the JV partner can also cover the costs to generate the full feasibility study (a big chunk of that would have already been cover during the infill drilling phase) and the costs throughout the permitting process, including technical and environment studies.
With regards to other existing Alexandria programs, I think the resource updates for all 3 projects (Orenada, WIM and Hudvam) should all be reasonable, as well. I don`t imagine they should cost too much more than, say, $100K per project, again, if similar to programs by other companies. Thus, probably not too much more than
$300K for all 3 projects.
I think the current drilling program should be the most expensive, but fairly reasonable. The recent ($.10) financing was for this drilling program - $500K raised. The program is set for 2,500 metres. That would make for $200 ($500K / 2,500m) per metre drilled. A $200m cost per drilled metre sounds about right, thus we can say that the current drill program will cost us about
$500K.
We also have normal ongoing overhead that eats into our cash situation.
$250K + $300K + $500K = $1.05 million + normal overhead
Thus, I have concluded that the $2.6 ($2.9) million in Alexandria`s Current Asset position is sufficient to cover existing work programs.