LOS ANGELES -- ?Regarding our
TCR visit to
French Guyana two weeks ago, the preliminary economics at
Montagne d'Or gold prospect are printed.
Partner
Nordgold, a Russia gold miner traded in London, is funding development of the project in the overseas department of France.
The headline is the $366? million in this week's engineering estimate?. That is a lot of money for tiny French Guyana, population approximately 280,000?.
At some point, principal developer
Columbus Gold (CGT in Canada) must decide 1.) to take part in what the parties hope is mine construction; or 2.) withdraw and see its ownership diluted approximately into the teens in percentage terms as Nordgold runs with it?.
?After seeing Montage d"Or, I have to believe
Norgold runs with it. The Russia operator is moving its offices to London from Europe and is, let's call it, ambitious.
? ?
Nordgold (NORD in London), which sprouted from Russia's Severstal Steel juggernaut, has proven successful since 2007 or so in producing gold in a few locations.? These include Burkina Faso, Kazakhstan and Guinea. Did I mention
Russia? It buys 'em and runs 'em.
My interest in CGT -- Columbus Gold, run out of Vancouver, Canada -- ?is more ?for the
Eastside gold project in central Nevada. I have been hunting, sniffing projects there for the past three years. ?Tremendous mid-grade gold (with silver) potential, if you look at area gold projects in and around the town of
Tonopah?.
Drilling is accelerated at Eastside this summer season. So we'll see. I am hopeful.
Area projects include
West Kirkland's Hasbrouck and 3 Hills gold projects within a jog of
Tonopah, Nevada, and I own West Kirkland (WKM in Canada) shares. There are also a few private collections of claims I know about in the larger area.
I do not as yet own shares of Columbus Gold -- just ?want to see more from the Eastside drilling in Nevada.
?Here are the summary points? from the
French Guyana prospect. SRK, an engineering firm, performed this? PEA on the pods. ?To my eye, ?this looks like a clean project with a longstanding team of
Columbus Gold geologists.Not much else around in that jungle to do but mine -- as evidenced ?by the legal and illegal area miners scraping the surface for largely alluvial gold.
I just can't get my head around the $366 million project cost -- known as cap-ex. And everything else needed to sustain it. The cashed-up Nordgold likely will get its corporate head around Montagne d'Or.?
What I can say, if you are a shareholder of either Nordgold or Columbus, is that the political leadership on tiny French Guyana says? it supports? this with every trick in their books. At least, that is what the president and the prefect ?told our group when we made our? rounds in the capital of
Cayenne.
The PEA flags:
-- 12,500 tonne per day open pit, mill/gravity/CIL operation to produce gold dore
-- Post-tax NPV (8%) of $324 million and post-tax IRR of 23%
-- Initial capital cost of
US$366 million (US$44 million contingency) and sustaining capital cost of US$216 million
-- Life-of-mine all-in sustaining cost (AISC) of US$711 per ounce gold
-- Total LOM gold production of 3.05 million ounces, average annual gold production of 235,000 ounces, and 273,000 ounces per year in the first 10 years
Silver Not
Also this week, I am raising the white flag on
one Mexico silver holding. We here at
TCR are still true blue on its larger neighbor in Durango and Guanajuato states. Please see
www.thomcalandra.com for more released to non-subscribers.
We at
TCR also have two
pharma-specs -- one of which could see corporate events this summer season.
Oh, and I have to congratulate the team at
Natcore Technology (NXT in Canada) for its solar cell machinations at the Rochester, N.?Y.?, lab and safe room it leases. If all goes well, Natcore's
David Levy, Chuck Provini and team say Natcore might be able to eliminate the use of silver in silicon solar cells. NXT shares (and NXCTF in USA) rose 59 percent as a half-million shares changed hands. I have owned the shares for a silicon slot of silver moons, at least.
We also have addition: actionable notes -- which are sometimes scary -- about a few other tickers. ?Oh, and the promise of a full research report for
TCRsubscribers -- that
Colorado gold mine we visited earlier in the year.? Likely Monday next week.
Read more please -- thomcalandra.com. I hope you can all subscribe for the current $139 yearly price. I won't be eliminating silver from our TCR coverage, but the crystal ball shows ?that $139 price is going away real soon.
-- Thom Calandra
?
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Thom Calandra & TCR are researchers and investors. They are not registered investment advisers. The research and material they offer to subscribers are meant as editorial opinion.