RESERVOIR MINERALS INC V.RMC

Joint Venture and Shareholders Agreement with Freeport News

[angelnotes]

I believe this news is  very signicant.    

This is the first time Simon talked about a scoping study for the Upper Zone which includes reviewing options to mine the high grade direct shipping mineralization.   Up to now, we just waited for the drill results to define the limits of the copper-gold porphyry mineralization in the Lower Zone.  

This is exciting because we have two projects in this JV;  the Upper Zone project and the Lower Zone project !!

Per announced in January 2014, the resource estimate for the Upper Zone is 3.8 billions pounds copper, 3.1 million ounces gold or an copper equivalent of  5.1 billion pounds.  The mineralization in the Upper Zone is closer to the surface; the method of mining should be simpler (strip or open pit) than box caving,  the amount of time to make this a producing mine is much shorter (especially for direct shipping),  and the mining cost is much lower.     The valuation for the Upper Zone based on the reserve has been $7-9 from various sources.     But if this is a producing mine and there is revenue and cash flow,  then the valuation of the Upper Zone is based on present and future cash flow that the mine will bring in.   And I think the valuation may very well be higher (if not much higher) than the $7-9 range.

The JVSA is based on the terms of the Earn-in Agreement and Freeport may bring its total equity interest to 75% when a feasibility study is delivered to Reservoir.    Under the terms of the agreement, I would assume that means a feasibility study for BOTH the Upper Zone and Lower Zone.    This feasibility study is a way off since the additional drilling is still ongoing to define the Lower Zone.   In the meantime,  if mining starts for the Upper Zone before this feasibility study is delivered;   Reservoir owns 45 % of this project (Upper and Lower zone).    And this could be significant for shareholders in terms of the stock price or dividends/payout  or whatever. 

I hope that Reservoir and Freeport both want to proceed to start mining the Upper Zone as soon as it is technically, environmentally and economically feasible.   This is a win-win for both Freeport and Reservoir and .... of course for the shareholders!!

Any thoughts?

[cd673]

We will see what they jvsa says re phasing When posted on sedar. But I'd suspect they can scope one discovery at a time. High then low then other if found. Freeport will get 75% of all when said and done.

[rob926]

By Serbian law they have to do a feasibility study within 4 years. It appears the have extended the original bankable feasibility with Reservoir to 2025. This is why they are breaking the high grade discovery out and going for a feasibility study to satisfy Serbians. I think the 25 million dollar claw back has something to do with what happens

[angelnotes]

Do you know or anyone know what the Serbian law is on the timeline requirement to start mining once a feasibility study is completed?