Post by
flash338 on Jan 18, 2018 11:34pm
Try this again
I ran some numbers a while back on one of the mines and started a small position. Last week I came back to TSN and I was coming up with potentially some jaw dropping numbers. I thought I might be missing something so I emailed the guy that writes a mining stock journal I subscribe to and see if I was overlooking something. He'd never heard of them. He did a quick look and thought maybe they were getting discounted over security concerns. That may be the case, but I've come the conclusion that TSN hasn't needed to promote themselves. They have a wealthy backer and the off-take agreements. I emailed the company with a couple of questions over the weekend to their IR guy. He hit me back Monday morning and said he would forward it to management. They where all out of the office in Mexico with "a number of analyst" doing a site visit. So maybe they might get a little attention.
Are you getting the MC off Stockhouse? Canadian Insider is showing 87M. Stockhouse may not be updated.
Here are some of the numbers I was coming up with. I used spot prices over the weekend with gold 1337, silver 17.33, Cu 3.23, Zn 1.55, Pb 1.17.
Tahuehueto:
I averaged probable and M&I.
9378Kt -> Au 2.7gpt, Ag, 42.46, Cu 0.324%, Pb 1.19%, Zn, 2.18%.
I used the recoveries listed in the presentation to come up with an approximate value per ton.
Au -> 97 USD/t
Ag -> 21 USD/t
Cu -> 18.42 USD/t
Pb -> 25 USD/t
Zn -> 56 USD/t
Total 215 USD/t
Au equivalent 6.23 g/t
1000 tpd X 365 minus 2 weeks maintenance (just a guess) = 56,250 oz AuEq per year.
215 USD/t at the same 1000 tpd and less 2 weeks on the year X 0.9 (guessing 90% of spot paid on concentrate) comes to about 68M USD per year from metal sold.
Costs per ton listed in the presentation is 91.26 USD. They think they can get it down to 70.
@ 91 -> 32M USD per year
@ 70 -> 25M USD per year
For potential earnings I used a 35% tax rate. Not sure what Mexico's corporate tax plus the mining tax is but I'm just looking for ball park figures.
@ 91 -> 23.4M USD or 29M CAD (1.24)
@70 -> 28M USD or 34.67M CAD
Campo Morado:
We really don't know much here. It's the big question mark. I ran the numbers on it too at 70% recovery and 80%. It was probably a waist of time. The recoveries from the previous operator you posted where a bit of a shock. I think it was in the Jay Taylor video they said they would focus on Au and Ag instead of the previous Zn focus. I assume that means both focusing on gold zones and optimizing for PM recovery. That would make sense because I was coming up with a different mine life than what they where stating. If I remember right I had 19yrs vs. 16yrs. I think my numbers of M&I where 9 g/t and 150k - 200k oz/year depending of full capacity or last op. year. Hopefully sometime in the first half of this year we'll get some blanks filled in. Trying to get an idea of potential here at came at it from another direction as well (assuming profitability). I just took tons per year times X. With X bing the value of metal per ton - total costs per ton. Running 25 USD per ton, 50, 75, 100.
@ 25 -> 22M USD
@ 50 -> 44M
@75 -> 66M
@100 -> you get the idea
Conclusion:
TSN could potentially be trading today at after tax earnings in a couple of years. I added to my position (now up there with my cores) this week. Assuming they can see even 25USD a ton at CM, they should be able to cover their debts in a couple of years and be looking to double processing at T in maybe 3. They owe 16.5M USD in June on CM purchase agreement. One of the questions to management that I haven't heard back on yet is if they see ops covering that by then or if they plan an offering. Anyway, I'd like to hear your thoughts.
Read more at https://www.stockhouse.com/companies/bullboard?symbol=v.tsn&postid=27389595#1UgI2gz5liurviq0.99