RE:RE:RE:RE:Stock Market - Mining Stocks AlfTanner,
I think that I can answer the question of whether "they just had one good quarter, or have they really turned things around."
If you look at the following chart, I have graphed the realized price of copper since Q4 2013 versus the profit margin for the Don Mario mine in Bolivia and the El Valle-Boinas Carles mine in Spain. Looking at this chart, you will note that the profit margin at each mine is a non linear function of the price of copper. EVBC makes money with copper above $2.70 USD and Don Mario makes money with copper prices as low as $2.30 USD. So part of the turn around in Orvana is due to the rising price of copper. The increase in copper prices is, in part, due to the Chinese ban on copper concentrates containing more than 0.5 percent arsenic, and the copper concentrate produced at Don Mario falls into the clean category with no arsenic content.
That's one factor. The other part of the story is at EVBC, back in Q2 and Q3 2014 when profit margins were running at $123 and $196 USD, and the mine was making money, average gold grades were between 3.7 g/t and 4 g/t and copper prices were above $3 USD per pound. This past quarter, EVBC did almost 14,000 ounces of gold production on 2.35 g/t material, and the mill is operating at a 2200 tpd throughput. When they get into their high grade oxide areas, the gold production at EVBC will double. At Don Mario, the story is all about the increase in gold recovery with the CIL coming on line in January and the change in ore from UMZ material to LMZ material which happened in Q3 of 2016.
From the chart below, you can see that Don Mario bottomed in Q3 2015, and had only 3 losing quarters. EVBC has had 10 losing quarters in a row, and will be profitable from this point forward. My forecast for Q4 2017 is based on gold priced at $1350 and copper at $3.20 USD.
Do you still think that you should wait a couple of quarters on this one?
