Some comments from the meeting.
I don't necessarily understand the implications of some of the financial and more corporate comments plus my recall of some comments may be out of context etc so treat with caution and DYOR . I may be able to expand on some issues so ask.
For resolutions 6 and 7 I asked questions which elicited significant responses.
6 proportional takeover provision protects you the shareholder from being left on the outer in biased takeovers. Not likely to happen but best to have something in place.
My understanding of the reply about Res. 7 was that the suspension was waiting for the 75%+ support for this resolution. Having got this CE and the board will move as quickly as possible to get the cash into their "kitty". Most are my words and understanding of what was said as the board knew they had to be very careful of wording. [Allen Trench was chair of the meeting and he surprised me by being aware of the 'debate' about this issue on HC]
As some said here this 25% maximum means they cannot raise any more without further shareholder approval UNLESS it is via a rights issue (Lloyd Flint).
The last two cash raisings were to small SHs/Retail but this one has gone to a different level of Investor Largely institutional and sophisticated (didn't use that term though. Sprott were mentioned in passing as supporters though not directly with respect to this CR.
The CR is not finalised but there will be a flurry of communications which will hopefully lead to some clarification over the next 24 hours. The meeting wound up about 1230 - lunch time in Perth. Not much time available in regular business hours over east. Might be asking a lot to finalise the CR in time for market opening tomorrow
IMO.
[Nothing asked about Taurus or volunteered]
As expected the funds are going to be used to "clear the acquisition costs for Cortadera" (followed by "next announcement will address this issue"); drilling in 2021 is hoped to be at 3-4 times the speed of Covid 19 year.
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There have been some recent appointments which show the company is beginning to plan for the next phase - whatever that may be.
Grant King (
GK) as COO has been announced and he is beginning using the 2016 Productora PFS as a model which hopefully can be updated and used as a model for a combined operation. CE(?) mentioned Productora C1 costs were $1.27US per pound Cu and the larger operation would hopefully reduce that to $1 -- arm waving, off the cuff remarks here that are not likely to be definitive yet. Based on Productora data a combined throughput of 15-25 Mtpa could be envisaged producing $1B worth of Cu/Au etc a year for 20-30 years.
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CE gave a presentation talk which I found familiar from various online interviews.
Now largest small cap Cu holder on ASX
MC $10-120M
More akin to a TSX company with HCH aspirations of Tier1 deposit in the future (5MT Cu/5 Moz Au). Current, similar TSX companies have a Market Cap of $2-500M. In ground value of the aspirational goal is $45-50B at $3.40 Cu.
2021 looking good - additional staffing and
soon to be well funded without the large acquisition costs looming large - italics my comment.
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Some questions from the attendees:
Didn't hear the Q but response was about the trial mining at Productora. Ongoing discussions with the government with the possibility of ramping production up to the capacity of the Vallenar plant. This is in GK's court.
It is a win win situation apparently - good government relations/employment/some funds -- all covered before.
Someone asked if Cortadera would be in production in 12 months. Definite No from CE. Hoping to get a PFS out in H2 2021. Hint of resource upgrade if drilling goes to plan. As mentioned above the Productora PFS could be used, in part, to streamline Cortadera's.
Hoped for production rate 100K tpa Cu and 100 Koz Au - $1B for 20-30 years. Arm waving.
Expect costs in the lower part of the lower quartile with the good infrastructure.
The last two Q's were included above.
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CE was very generous with his time following the meeting and we had a wide ranging discussion. Didn't take notes so shotgun approach here:
Cortadera North: the molybdenum targets were mostly Steve Garwin recommended; CE has a preference to drill the IP highs coincident B vein if I understood him correctly. These are 3D targets which means care in siting holes and interpreting the results.
Logistics are difficult with steep topography making road building challenging - CE mentioned 5 bulldozers(?). This image shows the zig zag road access at Cortadera North begun in August this year:
There are bets in the office about which target will click.
RC rigs being used have a maximum capacity of 700m with up to 2500m if converted to diamond. Practicality restricts the RC to around 500m as reduced penetration rate below 350m increases costs towards diamond equivalent. A 500m hole can take 3 days to drill (didn't specify single or double shift).
MRE - lots of different ideas and viewpoints made the Cuerpo 3 and San Antonio MRE's tricky to get out quickly. San Antonio has a lot of mining history = voids that can be used to quarantine varying volumes of rock depending on how they are treated. Now being done in house but only a "small" resource relative to Cortadera, albeit better grade.
CE and Melanie Leighton set me right on the need to do lots more drilling than I thought was necessary on Cuerpo 3. There are some gaps of up to 600m that need plugging. Then the gaps between the Cuerpos plus drilling out 1, 2 and 4 (my words on the latter). They dropped a tantalizing hint that they had an idea of something left field that might be nice...
Productora has some sweet spots that CE hinted at being exploited in some way. "Don't forget some good results from there" or words to that effect.
Conveyor construction in Chile is a well engineered procedure that is unlikely to cause any major issues other than Costs. One mountain to go through or over and bridging or going under the Pan Am Highway. Compared to other Chilean projects "a walk in the park" my words..
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CE fleshed out some of the images I had from Google Earth (Some broad geology and comments on old workings). This regional one shows a lot of old workings to the west of Cortadera. CE has gone down some and they are nice but small Ag rich veins (<1m) where he saw them. Barrick, or someone ex-Barrick, has been involved in diamond drilling. I didn't expect HCH would be interested in more ground and they aren't likely to be in this from CE's response. There are several regional trends in the area on top of the SW-NE one with small workings.
Some detail
I wondered about what the mine dumps at the western end of the Cortadera valley were.
There was some shallow trial mining done on Cuerpo 1. CE pointed out some of the pits.
HCH use part of it for their local logistics.
(20min delay)