Having seen this drill results I will stay away from MNC regardless of what new mining policy the Peruvian Government decides to implement.
In general, other than CD31 the new results released were very disappointing:
CD-27: not announced, probably discontinued due to problems with drilling CD-27B: Not good, mineralisation is very deep >870m CD-29: Worthless CD-30: Extremely poor CD-31: Excellent interval between 125m and 262m CD-32: Extremely poor and deep CD-33: poor
Results of holes CD-24, CD-25, CD-26 and CD-28 were announced previously.
What can you make of this drilling campaign: the resource is no longer open in all directions, and there is some better stuff at depths of over 1,000m. They may make the resource bigger but it will only be due to stuff at depth which adds little value.
Note that the next 15 holes will have an average depth of over 1,500m so still aiming at the mineralisation at depth to justify the project.
Now, the results were not the worst part of the announcement. Have a look at this:
"On completion of these drill holes (1 to 15) the company expects to be in a position to commence an in-fill drill program of the mineralised system with a view to completing an updated Mineral Resource Estimate by the end of 2012. The company will then commission a pre-feasibility study on the project."
I translate this as "the new drilling results do not support an upgrade to the Mineral Resource for the project and we do not think our current resource is economic so we will keep drilling and hope to find something economic by the end of 2012"
No major mining house will be lining up to buy the project if it is not shown that the project is economic.
In terms of mining ore at depth through open cut, the deepest open pit mine is Bingham Canyon in Utah which has reached 1.2km in depth after 105 years of mining. Next deepest is Chuquicamata in Chile which is 900m deep but has required 90 years to get there. Bingham Canyon initial resource grades were 1.7% Cu and at Chuquicamata the initial grade was 2.58% Cu, long way better than the 0.37% Cu that Los Calatos currently has.
Underground mining is expensive and generally requires even higher grades to justify development so lets not go there.
Alejandro -------------------- DYOR, this is not investment advice STO, BDR, TRY, PEM, HCH, ELT
MNC Price at posting:
30.5¢ Sentiment: None Disclosure: Not Held
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