Hi Robey...FYI...The gold and silver coming out of Los Azules will be nothing but a by product. If you look at the last PEA gold sales was less than 4 percent of the LOM sales...Its a Copper mine and really nothing else
From a recent Hochschild report:
Hochschild plans to step up the pace of investment at its majority-owned San Jose mine in Argentina, where the company is among the foreign investors welcoming improvements in the business climate following the election of Mauricio Macri last year.
The country was “fantastic from a geological standpoint?.?.?.?there is a lot of potential”, said Mr Bustamente. Hochschild expects increased cash flow from San Jose and is accelerating a plan to find more gold and silver at the mine.
Tyler Broda, an analyst at RBC Capital Markets, said there were “more signs of a turnround in fortunes” at Hochschild
Euro drops 1 cent but strengthens in aftermath of the decision
ECB launches three interest rate cuts and increase to QE to #$%$80bn
ECB will buy corporate bonds for the first time under programme
Interest rates will stay low and may be cut even after 2017
When Europe first dropped interest rate below zero and into negativity in June 2014 that's the exact moment the dollar spiked and ignited gold deeper into the bear market (check the chart). Times have changed from then to now with the US economy spiraling down. Todays interest cut deeper into negativity will just escalate the currency war which the US has officially entered and was not par of the first time around. The market is reacting exactly the way I speculated..so far
EG1 limited...EG2 yes, San Jose yes, Los Azules maybe, GoldBar already did with Afgan ( extra 1 and1/2 to 2 plus yrs)..
This is why this is risky but you can make tons if some things fall into place and if the company plays its cards right...don't be counter cyclic, watch your balance street, and be prepared. For ourselves we need to start studying up the period leading up to the recessions, during and after..both for gold and equity market. That's what I'm doing right now...
I think its time to look at your 401k, savings, etc and be prepared. For sure the first negative US GDP I'm out of all equities and into more gold and/or gold miners. But I'm attempting to time it more efficiently then that...the strength of the dollar, inflation rate plays a big part as well.
The original plan was to de-risk the project all the way thru at least a PFS. Those days we had a profitable San Jose mine with a 13yr mine life, EG1 and EG2, Gold Bar waiting in wings. Funding those 3 wouldn't of taken much and so it very was feasible to hold on to Los Azules until full optimization. If that had occurred San Jose would of been worth a lot more then it is today. But here we are 7yrs later and the dynamics has changed and so has our leverage. Today the sector has more selective buyers, glut of assets and a general lack of capital. The biggest change though is MUX itself. Like everyone else we mothballed projects and exploration so we can focus more on balance sheets and margins. So our once exquisite growth profile is beginning to look worrisome. Within the next couple of years they will be no EG1 and San Jose will be down to 5 year mine life. Yes we will have Gold Bar but we will need much more.
With that being said. Divesting Los Azules will need to be more strategically timed more the ever. Determining factors will be the gold market, our SP, EG2, San Jose exploration and acquisition. If we get a favorable PFS from EG2 in Q2 together with another leg up in the gold market that would give us back a heck a lot more leverage. Our share price would certainly be near 3.00 and we can fund EG2 without selling Los Azules. We can then sell Los Azules to scale the company thru acquisition and we are off to the races. If by chance the market turns back to trouble waters the sale of Los Azules would become more pressing and a acquisition becomes more inevitable and out of necessity.
To answer your question directly Rob would much rather present Los Azules properly with some leverage so that buyers are confident in its valulation. He may yet get that wish but the market needs to continue to get better. If not he will be FORCED to sell Los Azules into a market that has a greater push from sellers then a pull of willing buyers.
I remember the days when a good US job report would cause the dollar to spike...The dollar today detached itself from todays good job report and actually has taken a good drop...The gold market is always one step ahead of everything...going up and going down.
The currency war has snowballed into a global economic mess. The dollar is backed by the health of the US economy. If the economy takes a dive, the value of the U.S. dollar will drop both domestically through inflation, and internationally through currency rates. Both have not been evident as of yet but I suspect the US is now slowly entering the currency war , if not the recession will be on a much faster track
We surpassed last years highs but I'm thinking higher because of only one reason..the dollar!!..IMO golds recent strength was derived from US recent ADMISSION of economic contraction by the FED. That was the fuel!!...That placed a ceiling on the dollar and the gold market reacted. The beauty in all this is that the dollar has just declined slightly due to recent massive witness in the pound and euro. I think the dollar has much more room to decline from here which will cause the next leg up for gold.
Copper has spike as well!!....That will draw much more!! interest in Los Azules
OT: Ive jumped into Goldquest (GQC) couple of weeks ago..one of Robs investment a while back. Their Romero Project PFS is coming out during Q2 and then fast tracking a FS in Q4...both have been funded by ROB..Check out the chart...both GQC and MUX have performed hand in hand since golds rise...
That's correct wolf. It will take time for most of the shorts to unwind. Most of the short position occurred right after the merger of Minera and USGold, due to gold price drop, Argentina business practices and pending mine to build with no funding help in particular from San Jose.