$5.8M Cash - s/b good for 100 drill holes + $1.6M for CorpCAD $2.5M of current Kootenay-Northair cash to remain after April 20th acquisition completion date.
CAD $2.0M initial Pan American Silver subscription.
CAD $1.3M Pan American subscription after Kootenay-Northair April 20th close. Pan Amercian has (will have) the right to maintain ownership of 10% of Kootenay post Northair acquisition, which they will likely exercise shortly after.
As such, post transactions, Kootenay is likely to have CAD $5.8 million in Cash. I think there are some receivables (net of payables), tax recoveries (from Northair`s books) and a few securities in other juniors, all totalling about $1.5 million, sitting on the books. The $1.5M is not counted in the $5.8M Cash.
If management so chooses, it can spend CAD $4.2 million on drilling and allocate the remaining CAD $1.6 million for Corporate purposes.
The $4.2M can give us 100 drill holes or 20,000 metres of drilling.
That is a substantial drill program. If another acquisition is done (near-term), the 100 holes can be split between La Cigarra and any new silver property acquired. Pan American Silver will be (funding and) driving La Negra forward.
That is a CAD $42,000 cost per drill hole.
It assumes 200 metres per drill hole and CAD $210 (US $155) cost per metre.
It assumes a combination of RC drilling and diamond drilling.
Diamond drilling is more expensive than RC (Reverse Circulation) drilling. They can both do the job. However, one of the key differences has to do with what happens to the core, physically. With diamond drilling, the core remains intact when brought back to the surface. The core does not remain intact with RC drilling.
As such, more info can be gathered about the structure being drilling when a diamond drill is used. It doesn`t matter in the early stages of drilling a new zone. Early on, the key is to determine if a structure is mineralized. Thus, it is more cost effective to use an RC drill in the first phase of certain drill programs. The switch can be made to diamond drilling once mineralization is established.
This is also the same approach Northair used with the first 3 (and only) zones drilled thus far at La Cigarra - San Gregorio, Las Carolinas and La Barracha.