Ann: Paris DFS Update, page-90

The below spreadsheet has two rows that I have highlighted in green which shows the resource size and the metal value per ton of the inground resource. Obviously, this valuation is very crude as it assumes 100% recovery, and does not differentiate between differing project economics when accounting for mine development and strip ratios etc, but it does have its uses by providing a comparison to peers. One thing to note is that IVR is a pure silver play with a very small lead byproduct which I have assumed is economical on my spreadsheet. The second point to note is that IVR has the second smallest MRE, which means there is very little scope to increase the plant size to improve project economics.

IVR has a metal value per ton of resource of US$80 which includes the lead. Without the lead, that value drops to US$72. Now there are 3 projects on the spreadsheet with lower metal values per ton. All of these projects have between 160% and 800% larger mineral resource than the Paris project and so have the luxury of feeding a lot more ore into a larger plant to improve their respective project economics. The other point to note is that their respective resources have metals other than silver which are less volatile and provide less project risk.

I posted a chart at least 6 months ago that provided metal values per ton assuming a silver price of US$50/oz and assuming all other metal values only increased by 10%. IVRs metal value per ton increased the most because its resource is 90% silver and increased to roughly the same value as BMLs. At current spot metal prices, BMLs metal value per ton is 35% greater than IVRs. If we assume that IVRs lead resource is uneconomical, then BMLs metal value would be more than 50% greater than IVRs.

The Paris project needs a lot higher silver price. Probably US$50 which may allow them to lock in US$40 for project DFS assuming they cannot increase the resource size. I think management dropped the ball with Paris by going after alternate projects instead of increasing the Paris resource. Alarm bells were ringing for me when they did this and hence, I only ever had a $3K investment in IVRO which I sold yesterday at a 66% loss, which was a pure punt on a good DFS after selling out way back at 9c.

The second image is from Don Durrant, who is a precious metals writer and investor and shows his criteria for valuing projects and assays.