A few thoughts:
Displeasure with Cynthia’s linked in and “same old” PRs.
People are complaining about progress on the Ishkoday and that Cynthia’s posts on LinkedIn are the same thing over and over again. Please answer this: what exactly else do you expect to see? You invested in a junior miner… the teams job is literally to drill holes, collect channel and grab samples, prospect the property, analyze data and work progress the project towards becoming a mine. What pictures is Cynthia posting online?…. The team is drilling holes, collecting grab and channel samples, prospecting, analyzing data and the PRS and M&A (which everyone who gives their opinion has read here right?…..right?). These documents discuss how the project is progressing. What more do you want? A buyout!! Guess what… so do I but it doesn’t happen overnight or in your time. The latest PR was great in my opinion. We are moving forward and it’s business as usual, which it should be as things are negotiated in the background. Please stop the insufferable complaining about Cynthia posting the same thing over and over again because there’s not much else involved with the company she can post.
I understand people get exhausted because the process of getting to a buyout takes a long time and the road there is a lot of the same thing happening over and over again. Strategize drilling locations. Drill. Get results. Repeat. Repeat. Repeat. We don’t need a massive drill program right now because, as per the recent PR, we are moving into new areas to prospect. Someone already mentioned this but it’s a great sign that we may have proven what Cynthia was hoping to in the strike zone she’s been working in (more on that later).
An instant gratification culture.
I think a lot of the impatience and boredom people have on this forum stems from living in an instant gratification culture. People don’t know how to wait or be patient anymore. Want a book? Amazon has that. Want it fast? Amazon has prime. Want pizza, little Cesar’s is hot and ready!
Have you ever made bread from scratch? It’s time consuming and messy but tastes great. Stop treating your investing career like it’s a race or like your binge watching breaking bad. It takes time and it doesn’t all happen at once, and the end results of patience and due diligence can often be worth the work and time put into it. We could go month without a pr and guess what Lme is still an excellent opportunity! If you don’t like Lme or Cynthia or how you emotionally feel about the company then take your ball and go home. This is investing in junior mining, it is the big kids playground not kindergarten. stop asking Cynthia to coddle you and address your hurt feelings reports.
Strategic relationships.
Wow… what great posts detailing uscg, metals house and Lme as well as John covellos role. Awesome read and summary to all those who have been constructively contributing! Clearly a strategic team has been put in place. Why has a transaction not transpired yet? Who knows, but I’m sticking around until the end. Those partnerships are all in place so while we may be progressing “slowly” as some may say I think we are still heading in the right direction. The strategic relationships in place are all great steps in the right direction. Timelines cant be put in a box easily, dont try and fit LME into your expected timeline, I have tried... a lot... it does not work.
I know we’ve all heard this before but again it’s not like new info comes out every week. Don’t forget the great news we’ve received or give Cynthia and the team less confidence because a deal hasn’t happened yet. Those strategic relationships are still in place, we are moving in the right direction.
Property of merit And LME valuation.
Doug yesterday said “Approx. 82,299 meters and 428 diamond drill holes have been drilled since Cynthia started. Also over 25,000 channel samples have been collected. All of this data is used in the 43-101 technical report of merit.”
I had assumed the property of merit did not disclose all of the results because the numbers reflected in gold were lower than some had thought/hopes. But I do not think anyone has posted projections of the value that the silver brings to the project and that adds significant value.
After spending some time reading articles on gold to silver ratios and their relation to mining deposits The number 8:1 (total of 9 geos, 1 part gold and 8 parts silver) seems widely accepted as average distribution.
Why is this important? Because we can calculate how much Gold the Ishoday potential has based on the property of merit and from there derive a total number of GEOs (not counting Copper or other precious metals due to lack of data, more on that later)
I did not compute the ratios from lmes drill results highlighted in the property of merit on pages 59-63, 74 or the results from the historical/recent drill results that aren’t specifically references by drill hole # in the technical report to calculate our average for silver to gold distribution as I do not have that kind of time. If a person really wanted an accurate number they would need to go hole by hole through all 428 drill holes and calculate the ratios. But a brief look over the highlighted numbers in the property of merit show some results well exceed 20x and other instances where gold values were actually higher than silver values in g/t. If anyone wants to actually calculate the average of gold to silver across each hole have fun, please let me know how you make out!
Going back to mining ratios this excerpt from https://www.about.ag/MiningAndGoldSilverRatios.htm gives a great explanation on what that means and how it relates to the gold silver value ration and the earths crust ratio (dont confuse the ratios!)
“First, the definitions, if you need them. The "mining ratio" is the number of ounces of silver mined for every ounce of gold mined. Today, that ratio is somewhere around 8:1 (roughly 800,000,000 ounces of silver mined annually compared to roughly 96,000,000 ounces of gold). The "gold:silver ratio" is how many ounces of silver an ounce of gold can buy, determined by taking the price of gold and dividing by the price of silver. As I write this, that ratio is roughly 80:1 (about $1,300 for gold and $16.25 for silver), meaning that you can buy about 80 ounces of silver for an ounce of gold. Finally, there is also the "Earth's crust ratio" (how many ounces of silver are estimated to be in the Earth for every ounce of gold), which is roughly 20:1 (based on silver being .075ppm and gold being .004ppm), but some sources show it as high as about 65:1. Note that ratios can be backwards (e.g. gold:silver should be 1:80, but is usually written 80:1). Many, many, many people (even sophisticated bloggers) are completely misunderstand the mining ratio and what it means (and worse, they don't realize it). The same holds true with the Earth's crust ratio. The confusion is that they assume that the gold:silver ratio should naturally be the same as the mining ratio -- but this is completely wrong.”
A note about comparables that I should mention .. these are not cherry picked. I simply googled “mining guidance gold silver” and these are the first relevant results with figures for Gold and Silver. They all blow the average 8:1 ratio out of the water.
1.
Mcewean mining details this a bit in their 2021 guidance where their mining ratio for total production is over 20:1 (silver to gold) One of their mines in San Jose highlights results showing a ratio of over 50:1!
https://www.mcewenmining.com/investor-relations/press-releases/press-release-details/2021/McEwen-Mining-A-Warm-Welcome--2021-Production-Guidance/default.aspx
2.
Endevour mining details their mining ratio is roughly 155:1 (silver to gold) using their base 34,000 oz AU and 5.3M oz AG figures.
https://www.juniorminingnetwork.com/junior-miner-news/press-releases/1070-tsx/edr/154101-endeavour-silver-provides-2024-guidance-production-expected-at-5-3-5-8-million-oz-silver-and-34-000-38-000-oz-gold-for-8-1-8-8-million-oz-silver-equivalent.html
3.
Fortuna silver details their gold to silver mining ratio of approx. 18:1 (silver to gold)
https://fortunasilver.com/investors/news/fortuna-reports-record-2023-production-of-452-koz-au-eq-and-2024-annual-guidance-of-457-to-497-koz-au-eq/
Back to LME and GEOs It is worth nothing that cu and zn along with other minerals also have monetary value in the sense of GEOS however their values are listed as percents for any given drill hole where they are mentioned and any attempt to calculate them is thrown off because of other types of mineralization (such as that found on page 71 in table 11-1) that is not numerically accounted for. This renders a percentage calculation impossible in regards truly accurately valuing the total mineralization. Thankfully gold and silver are measured and disclosed in g/t and those numbers should carry the bulk of the value; or at least, once combined, give us an excellent base case scenario on buyout value.
So if we accept that silver and gold are typically mined at a ratio of 8:1 how many geos (again only account for gold and silver, not copper or nickel or other metals) does LME have? Here’s the answer:
Page 95 holds all of the information we need in the “Ishkoday property mineral exploration potential” graph.
first we take the low and high tonnage/gold numbers and use them to get an average figure. This will allow us to three separate scenarios respectively for tonnage (measured in Mt in the report and gold in g/t) with figures for a base case, middle case and “ceiling” for possible buyout numbers based on the figures from the technical report.
It is worth noting as Dam$ and others have said that much of the ishkoday and twin falls properties is not prospected, there’s a lot of blue sky that has not yet been looked into. It is because of that I think even the “ceiling” values that follow could potentially be low in the grand scheme of things.
Here is the whole picture, I will break it down further below. If image hosting glitches out on SH here is a link to the image profiles:
https://lambosntendies.imgbb.com/
Mt tonnage and gold g/t values low, high from the property of merit as well as calculated avg per zone:
We then convert Mt to tons as the mineralization is measured in g/t. Next we take the tonnage and multiply it by grams per ton. This gives us the total of gold (grams) for our base, high and average scenarios.
Next we take the gold in grams and convert it to ounces by multiplying the gram value by 28.35 as there are 28.35 grams in one ounce.
Finally we take those respective values total them (grand total AU). We take those totals and multiple them by 9 (ratio of 8 oz AG to 1 oz AU for a total of 9 oz). This gives us Grand total GEOs (again only factoring gold and silver, sorry copper and others, we need more info!). As mentioned earlier we could potentially also have much more silver!
Once we have our low, high and avg geos we pick our price per geo we think we will get. I am working off of $350 CAD. You can easily insert your own speculative “price per geo” number at this point. This gives us total buyout/deal value.
Next we divide by 271,000,000 shares (fully diluted) and this gives us our dollar per share value in CAD.
With a base of $8.60 an average of $17.63 and a "ceiling" of $29.86 It would seem Matlas may be right if we end up on the “high end” but again… the ishkoday is not fully explored and its potential not fully unlocked… who knows what information the surveys over the rest of the property and twin falls hold. We could potentially be much higher!
Before people go saying that’s way too high I’d like for you to show me in the numbers where I’m wrong and how this should equal some of the brutally low numbers that some people think. Because I seriously cannot see how we are below the base case figures unless we somehow fall significantly below the average for silver to gold mining ratios. Show me your math step by step!
The best argument so far for a low buyout price is the Buyer risk premium of 50%!? That’s outrageous, Lme is not a distressed asset. that’s so far out of the standard deviation of typical risk premiums it simply can’t be taken seriously imo. I must have missed the 50% risk premium in the GBR buyout notes.
Good Luck to anyone who decides to tackle calculating the specific Ishkoday gold to silver ratio!
All the best and have a great weekend!
- Lambo