RE:RE:RE:Thoughts on San Filipepetersburggray,
You have got to be kidding me! "Flush with cash?" Give me a break. During the third quarter Americas Silver had $5 million in operating cash flow and $3.5 million in CAPEX expenses, and where did the $23.7 million dollars in private placement money come from? From printing shares! So Americas Silver is not flush with cash, but is printing shares along with every other silver producer just to stay in business.
So by spending $15 million dollars of shareholder money on acquiring the San Felipe project, Darren Blasutti has tagged himself as a serial acquirer! He wants to make deals!
So let's take a look at the San Felipe de Jesus project. This guy loves projects with Biblical references. So the San Rafael project and the San Felipe project have a lot in common.
They both require sequential flotation of lead followed by zinc, and with the 0.3 percent copper content at San Felipe, they could clone the Cosala MRP at San Felipe, and perhaps add a copper concentrate to the lead and zinc concentrates that are envisioned in the PEA.
So what are the San Felipe project risks?
- Location in Mexican Moose Pasture means that USA would have to run an 80 km power line to the site or install diesel gensets to power the mill. Cost equals $6 million USD
- Creek crossings have no bridges so roads may be impassable at times. Cost of road improvements undetermined
- Adequacy of local water supply not confirmed
- Design and engineering of office, warehouse, and shop at MRP site not done
- Tailings dam engineering design and permitting not done cost equals $6 million USD
- Reclamation and mine closure plan not done Add $6 million over life of mine for this cost
- The distribution of sulfide versus oxide ore in this project is unknown, so another infill drilling program will be needed before this property goes into production
- So where does the project capex of $22 to 36 million USD come from?
The San Felipe project looks like a carbon copy of the San Rafael project. The ore body is 5 percent zinc, 1.7 percent lead, and 63 g/t silver. The products will be a lead concentrate with silver by product credit, and a zinc concentrate with no silver or copper credits or penalties.
Unanswered questions are will Americas Silver opt for a 2000 tpd MRP instead of a 1250 tpd MRP? A bigger mill would increase initial capex cost by $7 million but lower operating costs over the life of the mine by $2 USD per tonned milled.