Wim & Hudvam – 1M Au Eq Ounces (we get zero Mkt Cap Value) This is partly due to the size of our VMS deposits, as well as the depressed copper and zinc prices over the last couple of years. Copper was stuck at around US $2.10 per lb and zinc had fallen all the way to around US $.65 per lb.
However, these factors alone do not justify the market giving us essentially zero market cap for our Manitoba VMS (polymetallic) deposits.
Copper is now back to US $2.53 and zinc is now US $1.11. I believe at least 3 factors have contributed to the recent increase in base metal prices, as follows:
* Inflation
* The Chinese people love to speculate on base metals. They are in one of those phases right now, and are apparently buying the base medals hard, especially copper.
* Trump has promised major infrastructure projects, at the same time as promising to lower taxes. This means that the US debt will increase at an even quicker rate than the $1 trillion per year pace they have been on (last fiscal year it was US$1.4 trillion, with US overall debt soon to exceed US $20 trillion). Everyone on Wall St apparently forgot this when smashing the gold price downwards the last few days. Anyway, it seems the lovefest with Wall St and Obama has thus far continued with Trump. Wall St is anticipating that the infrastructure projects will result in major purchases of copper, zinc and other base metals, and are in the middle of a major buying frenzy.
It is not clear how long this uptrend will continue for these base metals. If inflation continues then it could push and sustain the copper price (to and) above $3 and the zinc price above $1. As I mentioned previously, I think we are in a period of stagflation – low growth with high inflation (especially for essential survival items – rent, food, health care, etc. - which represents about 90% of spending for middle and low income people). If the system crashes, with producer and infrastructure spending contracting, base metal prices will turn down as well – until the US gov`t begins the next phase of (QE and helicopter) money printing to reflate the bubbles.
With regards to size, thus far Wim has about 4.6 million tonnes of ore in 43-101 and Hudvam has about 1.55 million – 2015 resource update. VMS deposits with size of 10 million tonnes are well recognized, but 4.6 million at Wim is fairly decent. I think there are sufficient exploration targets on the Wim property to eventually reach 10 million tonnes. I think Hudvam can double also (or more).
The primary metal at our Wim and Hudvam VMS deposits is copper, but I like to state the consolidated (rolled up) figures in gold equivalent, for easy comparison purposes:
Wim – 690,000 Au Eq
Hudvam – 310,000 Au Eq
Total Manitoba VMS Deposits – 1,000,000 Au Eq
For Au Eq conversion purposes, I used the following metal prices:
Cu – US $3.00 (same as 43-101 rpt for conversion purposes, not cutoff price)
Au – US $1,200 (same as 43-101 rpt)
Zn – US $1.15 per lb (my own figure – current price is $1.11)
Ag – US $20 per oz (my own figure – current price is $18.36)
Copper recoveries are good (as the primary metal) while recoveries for the other metals are good also (for secondary metals).
The angle of both deposits, and the thickness within the deposits, should allow for long-hole mining. This is a form of efficient (bulk-tonnage) underground mining.
The Wim deposit has open pit potential for the first year of mining. It has about 35,000 Au Eq ounces in the potential open pit area. They can probably produce about 20 – 25K Au Eq as an early starter pit at Wim, whenever it reaches mining stage.
Hudvam has a ramp in place that goes for 267m. It is incomplete. It probably needs to go for about 50 – 150m more, before reaching the first Hudvam resource zone (Zone 3). That does not include the staircase type of winding of the ramp, and the drifts, that would be required while actually mining within the deposit. That could allow early mining of the small Zone 3 area, whenever Hudvam reaches mining stage. Zone 3 has about 55 – 60K Au Eq resource. It could maybe represent 1 year or 1.5 years of a mining plan. However, getting to the main resource (Zone 1) at Hadvam will require far more ramping work.
Hudbay has processing facilities at both Flin Flon (Hudvam) and Snow Lake (Wim). The zinc recovery plant is at the Flin Flon location.
Trucking distance from Alexandria`s Hudvam to Hudbay`s Flin Flon plant is around 45 km. It is 25 km from Wim to Hudbay`s Snow Lake plant.
Hudbay would be the ideal J/V partner for Alexandria, but I am not sure if they are in a position right now. They have about $100 million in cash, but they also have a huge debt total of $1.1 billion. They are currently focused on reducing debt and organic growth.
At the same time, they will run out of ore at the Flin Flon operation in less than 4 years from now. They will need to address this situation at some point, otherwise they will need to put their Flin flon processing plant on care and maintenance.
Hudbay`s Snow Lake plant will be processing ore for quite a while longer, but there is still capacity for Hudbay to take on more ore (due to the purchase of the old Kinross Gold-High River Gold New Briannia processing plant).
With the Copper and zinc prices somewhat elevated again, it is possible (eventually) that other junior companies might want to kick the tires on our VMS deposits a bit – for J/V possibilities. I would like Alexandria`s management to only accept a J/V deal if it is tremendously beneficial to existing Alexandria shareholders, otherwise I would prefer that Alexandria just continue to sit on the Manitoba VMS deposits until better opportunities are presented down the road.
Exploration opportunities to grow the resource:
1) Hudvam Property
* Zone 3 was stopped by a fault. The area below the fault has yet to be tested. It is possible that Zone 3 could continue somewhere below the fault disturbed area, either directly below or as a (pushed away) faulted offshoot. See location on map 1 below.
Image 1:
[img]https://[/img][img]https://[/img]
Link, if image doesn`t show up:
https://www.azx.ca/wp-content/uploads/2015/06/hudvam3.jpg
* At about 275m to the left of Zone 1, a step out drill hole made a hit of 2.43 g/t Au, 1.60% Cu, 1.12% Zn and 19.00 g/t Ag over 3.87m. Follow up drilling is required to determine if this it is a new deposit lens.
* New Down Hole Pulse EM Target (near Zone 1), which represents a potential new horizon - needs to be drill tested. See map 2.
Image 2:
Link......:
https://www.azx.ca/wp-content/uploads/2015/06/hudvam6.jpg
* There are 3 solid targets just west of Zone 3. Murgor issued a news release on May 11, 2010 with regards to these new electromagnetic (EM) geophysical targets – they have nott been tested as yet.
``Three new conductors were detected with geophysical signatures similar to the those of the Hudvam massive sulphide deposit. The anomalies are all located on the fault-offset, western extension of the Hudvam deposit mineralized horizon. The mineralized horizon is believed to be offset approximately 75 meters to the north relative to the Hudvam deposit.``
Target A – 450m strike length, 170m depth extent (starting at 20m depth)
Target B - 300m strike length, 300m depth extent (starting at 175m depth)
Target C - 230m strike length, 240m depth extent (starting at 100m depth)
```This is a very exciting development at the Hudvam property since any of these conductors has the potential of doubling the size of the Hudvam deposit.` said Andr Tessier, President and CEO of Murgor Resources.``
See map 1 above.
* The red dots on map 3 represents additional EM targets along strike with Hudvam resources.
Image 3:
Link....:
https://www.azx.ca/wp-content/uploads/2015/06/hudvam5.jpg
2) Wim Property
On map 4, the blue outline is the 43-101 resource deposit. The right side of the blue (outlined) deposit is where the Indicated resource portion is located.
You can see red dots going all along the bottom blue area of the deposit outline, on the outside. They represent anomaly conductivity results that encourages drilling.
You can also see 8 other red outlines (circular/elongated). They represent exploration opportunities.
VMS deposits tends to be in clusters. Once you have found one, chances are good of finding more nearby.
Image 4:
Link....:
https://www.azx.ca/wp-content/uploads/2015/03/WimGeology.png