Norte and Este Updates, page-3

I agree with 1 hammers Quarter 1 2016 .  

In respect to Zahena it is worth watching the Southern copper news pages  to see if they are discussing the Ilo area as the time lines get closer .

Illo is on the rail line of Tia Maria and is obviously far closer to the sea water than Tia maria , and the water the operator intends to use  is the core point of contention for the $1.4 billion Tia Maria project for the local community

Illo is a far better alternative , because of its location , and the fact it is not close to any communities as the photos show it is basically barren land

Tia maria is on 33,000 hectares , and expects to produce 120,000 tonnes per annum

LRS has a similar size lease

Southern copper in their quarterly made comments about the investment they have made to date in another Peruvian copper project , the Toquepela project , most interestingly  the spend has been $370 m year to date.

This makes the $5m they are spending to drill a few holes at Illo petty cash

It also makes the market cap of LRS laughable should the drilling show positive copper, the most disappointing aspect of it all was when LRS was 30 cents the company was difficult to take over as most shareholders felt $1 was possible for LRS shares given the variety of leases LRS have

Companies like Southern copper would have had to pay up to secure the JV on one of these

Now the shares are 1 cent or less , the directors are left in a position where a positive drill result from Zahena makes them very vulnerable to either accepting a soft JV deal or being taken out altogether.

Everyone now cows LRS has not got the funding to become a producer , but needs to do deals under a JV to get some return on its land bank assets.

I think this is why LRS are looking at securing  the Chile producing asset ,if LRS can start to become a producer in its own right the bargaining power it has in Peru increases.

Junefield paid 2cents recently as a sign they will defend their position at 2 cents , so that gives directors some confidence , but the market itself does not see the value at present no matter how large the potential end game.

From the southern copper quarterly this week .

www.southernperu.com

•   Nine months of 2015 (“9M15”) net sales were $3,791.3 million, 12.2% lower than 9M14 net sales of $4,316.4 million principally due to lower metal prices.
•   EBITDAi in 9M15 was $1,614.7 million, 21.8% lower than the $2,064.3 million in 9M14. The EBITDA margin decreased from 47.8% to 42.6%.

Regarding the Peruvian projects, and specifically on the Toquepala projects, through September 30 of this year we have invested $372.3 million in the Toquepala projects. On April of this year the construction permit for the Toquepala expansion project was approved, allowing us to continue its development.
Once in operation, the Toquepala expansion will increase annual production capacity by 100,000 tons of copper, from 135,000 tons estimated in 2015 up to 235,000 tons by 2018. And it will also increase annual molybdenum production of the Company by 3,100 tons, at an estimated capital cost for the whole project of Toquepala of $1.2 billion.
This investment is estimated to generate 2,200 jobs during the construction phase, and 300 additional full-time jobs once finished. These new jobs will add -- the 300 -- will add to the current 1,500 permanent employees at Toquepala. The project is expected to be completed by the fourth quarter of 2017.
Our Board approved a project to improve the crushing process at Toquepala with the installation of a High Pressure Grinding Roll, or HPGR system, which will act as a quaternary crusher.