re: Ann: Cerro del Gallo Gold/Silver Heap Lea...
This report is too confusing for a straightforward person like me. After some facts finding calls, here is a simple version. Using gold and silver prices that are quite close to today prices, the nett present value for the project is about $940m. It was imposed upon CJO by TSX to report the studies in such complicated manner because the carbon in leach is happening later and cannot be considered definitive. As CJO currently owns 66% of the project and there are about 720m shares, the value of each CJO share based on just the Cerro project is about 86c. The capital cost is about $80m and CJO will have to raise this amount ONLY if Goldcorp is not participating. Otherwise, our contribution to the capex is only $53m. If GC is non participatory and all future profit goes to CJO, the value of each share becomes $1.31 No wonder there is not much selling after the report. Some may sell when they live by the adage," Buy on rumour and sell on facts." To them, I say, "Bye." But some sold because they couldn't understand the report and fear the unknown. As obvious from my older postings, I am concern for the long term investors and not the day traders. I write to encourage them and hopefully help them understand the true picture.
CJO Price at posting:
33.5¢ Sentiment: Buy Disclosure: Held
