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Minera Andes Inc (MAI) |
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WIKI ANALYSIS
Company Overview
Minera Andes[4] is a Canadian based, exploration focused company with three significant assets in Argentina: 49% interest in the producing San José gold/silver mine; 100% ownership of Los Azules, an advanced stage porphyry copper exploration project with an indicated and inferred 12.5 billion pounds of copper, 2.3 million oz of gold and 57 million oz of silver; and 100% ownership of approximately 133,700 acres of mineral rights bordering San José and Goldcorp's Cerro Negro project.[5]
Corporate Management
CEO, Chairman and President of Minera Andes is Robert R. McEwen.[6] Rob, who does not recieve a salary, is also the largest shareholder with ~31% ownership. Prior to involvement in Minera Andes, Rob founded Goldcorp Inc where he grew the company from a market capitalization of $50M to over $10B as its CEO.
San José Gold/Silver Mine
A joint-venture with Hochschild Mining plc,[7] the San José gold/silver mine has been in operation since Q3 2007. Production from San José is currently about 100,000 oz gold and 7,500,000 oz silver per year, 49% of which is attributable to Minera Andes.[8] High grade feed from the mine measuring approximately ½ ounce of gold equivalent per tonne is processed on site to produce both a gold/silver doré and concentrate for sales.
San José Mineral Resources
Due to the highly prospective nature of the San José area, exploration success has increased gold and silver resources in every year of mining operations. Most new discoveries are adjacent to existing underground workings which could reduce future development costs in bringing them into production.
Starting in 2010, exploration spending was significantly increased to extend the life-of-mine at San José and demonstrate the potential of the over 100,000 acre property. Current mineral resource estimates are derived from drilling within only a 2 km radius of the mine.[9] As at September 30, 2010 the resource life-of-mine was 12.5 years.[10]
San José Exploration Potential
In addition to the defined resource near the San José mine, other areas at distance also indicate the existence of significant gold and silver mineralization. At Saavedra West, a zone approximately 5 km to the south, an indicated and inferred resource of 9,460,000 oz of silver equivalent was outlined from drilling conducted in 1998-2000.[11] Significant intercepts included:
- 115 ft (35 m) of 617 g/t (18.0 oz/t) silver and 4.05 g/t (0.12 oz/t) gold in hole EP-12[12]
- 50 ft (15 m) of 741 g/t (21.6 oz/t) silver and 8.23 g/t (0.24 oz/t) gold in hole EP-20[13]
- 20 ft (6 m) of 1647 g/t (48.0 oz/t) silver and 61.53 g/t (1.79 oz/t) gold in hole EP-21[13]
Exploration drilling conducted in 2010 again returned significant silver mineralization across thick intervals characteristic of the area geology:
- 50 ft (15 m) of 603 g/t (19.4 oz/t) silver and 2.22 g/t (0.07 oz/t) gold in hole SJD-765.[14]
- 53 ft (16 m) of 803 g/t (25.8 oz/t) silver and 2.04 g/t (0.07 oz/t) gold in hole SJD-766[14]
- 18 ft (6 m) of 433 g/t (13.9 oz/t) silver and 0.99 g/t (0.03 oz/t) gold in hole SJD-829[14]
11 km to the north-west, surface samples from the Aguas Vivas area have returned 13.0 g/t (0.417 oz/t) gold and 41.4 g/t (1.33 oz/t) silver.[9] In all, there are approximately 40 km of known vein trends across the San José land package. And from exploration drilling high grade gold and silver veins that do not outcrop have also been found.[15]
Los Azules Copper Project
Situated in the Argentinian province of San Juan in the Andean cordillera region, Los Azules is a large porphyry-style copper deposit hosting gold and silver mineralization. The geography at Los Azules makes it a candidate for a large-scale open pit mine producing ore amenable to conventional flotation recovery methods. Metallurgical testing on the ore has indicated copper metal recoveries between 92-93%[16] The currently defined mineralization envelope extends 3.7-km north-south by 1-km east-west and is currently open to the north and at depth.
According to a NI43-101 compliant preliminary assessment completed in 2010, the project has a pre-tax net present value of $2.8 billion and an internal rate of return of 21.4% at a discount rate of 8% and a $3.00/lb. price of copper. The life of mine cash operating costs, net of gold and silver by-product credits, is $0.96/lb. With required initial capital of $2.9 billion, capital payback is in ~3 years and the life of mine is ~25 years.[17]
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Los Azules Mineral Resources
As of December 1, 2010 Los Azules contained an indicated resource of 137 Mt of 0.73% Cu containing 2.2 billion pounds of copper and an inferred resource of 900 Mt of 0.52% Cu containing 10.3 billion pounds of copper.[17] The estimates are based on approximately 30,000m of diamond core drilling between the years 1998-2010.[17] It is the stated intension of Minera Andes to continue infill and step out drilling at Los Azules while advancing the engineering studies necessary to systematically de-risk the project.[18] With this, more of the inferred resources will be moved into the indicated category such that a prefeasibility study can be completed.
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Los Azules Exploration Potential
In addition to the defined resource at Los Azules, numerous geophysical anomalies have been identified through extensive Titan-24 DC-IP-MT surveys. 20 separate IP anomalies, each of at least 200m across, are consistent with porphyry and near-porphyry mineralization models.[17] One very large DC-MT resistivity anomaly situated east of the existing resource envelope at Los Azules is most likely related to conductive sulfides, possibly from a concealed porphyry intrusion.[17] Testing of select anomalies is set for the 2010/2011 drilling season.
_Survey.jpg) | _Resistivity_Survey.jpg) | _Resistivity_Survey.jpg) |
TNR Gold's Claim of Back-in Rights
TNR Gold Inc has served notice to Minera Andes exercising a purported back-in right for 25% of certain of the properties constituting the Los Azules project. The properties of interest comprise the northern half of Los Azules and do not represent 25% of the Los Azules deposit by area or resources identified.[20] The right of TNR to exercise the back-in right to Los Azules is subject to a legal action commenced by Minera Andes against TNR Gold in which Minera Andes is disputing TNR Gold's ability to waive the production of a feasibility study and issue a back-in notice. The action seeks declaratory relief that any back-in notice is invalid, void or of no force and effect, and advances a claim for costs.[21] A court date has been set for June 20 - July 15, 2011.[22]
Mineral Rights Bordering Cerro Negro
South of San Jose and neighbouring Goldcorp's[23] Cerro Negro project, Minera Andes holds exploration rights to 133,671 acres of highly prospective property that is on trend with numerous high grade gold and silver discoveries. Goldcorp cited Cerro Negro having the potential to double or triple its 3.5Moz gold equivalent resource over the next couple of years when it acquired Andean Resources in 2010.[24] The $3.6B take-over price paid by Goldcorp for Andean and its flagship Cerro Negro project attests to the geological potential of this region in supporting district-scale mining operations.
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References
- ↑ http://www.minandes.com/projects/san-jose-mine/default.aspx
- ↑ 2.0 2.1 Hochschild Mining plc 2006-2009 Annual Report http://www.hochschildmining.com/content/pagina11.php?pID=352
- ↑ http://media3.marketwire.com/docs/Exhibit%201%20-%20Plan%20Map.pdf
- ↑ http://www.minandes.com Minera Andes
- ↑ http://www.marketwire.com/press-release/Minera-Andes-Announces-Discovery-5-Kilometres-New-High-Grade-Gold-Silver-Veins-San-Jose-TSX-MAI-1331329.htm
- ↑ http://en.wikipedia.org/wiki/Rob_McEwen Rob McEwen
- ↑ http://www.hochschildmining.com/content/index.php
- ↑ http://www.marketwire.com/press-release/Minera-Andes-Announces-Increased-Silver-Gold-Production-Fourth-Quarter-Year-2010-San-TSX-MAI-1382211.htm
- ↑ 9.0 9.1 9.2 Page 25 & 26 http://www.minandes.com/Presentations/default.aspx
- ↑ http://phx.corporate-ir.net/phoenix.zhtml?c=204920&p=irol-newsArticle_Print&ID=1483964&highlight=
- ↑ http://www.minandes.com/News/Press-Release-Details/2002/Minera-Andes-Receives-Independent-GoldSilver-Resource-Estimation-on-24-Km-of-20-Km-Long-Target-at-El-PlumaCerro-Saavedra-P/default.aspx
- ↑ http://www.minandes.com/Theme/Minera/files/pdf/mar25-98-7.pdf
- ↑ 13.0 13.1 http://www.minandes.com/Theme/Minera/files/pdf/jul16-98-13.pdf
- ↑ 14.0 14.1 14.2 P&E Mining Consultants, NI 43-101 Technical Report on the San José Silver-Gold Mine, Santa Cruz, Argentina, prepared for Minera Andes Inc., Sept 30, 2010
- ↑ http://phx.corporate-ir.net/phoenix.zhtml?c=204920&p=irol-newsArticle_Print&ID=1483964&highlight=
- ↑ http://www.newswire.ca/en/releases/archive/September2008/25/c8449.html
- ↑ 17.0 17.1 17.2 17.3 17.4 17.5 17.6 17.7 17.8 17.9 http://www.marketwire.com/press-release/Minera-Andes-Announces-Updated-Preliminary-Assessment-Its-Los-Azules-Copper-Deposit-TSX-MAI-1370593.htm
- ↑ http://www.marketwire.com/press-release/Minera-Andes-Announces-Updated-Preliminary-Assessment-Its-Los-Azules-Copper-Deposit-TSX-MAI-1370593.htm
- ↑ 19.0 19.1 19.2 http://www.marketwire.com/press-release/Minera-Andes-Reports-Mineral-Resource-Increase-at-Los-Azules-Project-TSX-MAI-1279047.htm
- ↑ http://www.marketwire.com/press-release/Minera-Andes-Rejects-TNR-Gold-Corps-Claim-Back-Right-Los-Azules-Copper-Project-TSX-MAI-1153891.htm
- ↑ http://www.tnrgoldcorp.com/s/NewsReleases.asp?ReportID=396482
- ↑ http://www.tnrgoldcorp.com/s/NewsReleases.asp?ReportID=427077
- ↑ http://www.goldcorp.com
- ↑ http://www.newswire.ca/fr/releases/archive/September2010/03/c7093.html
- ↑ http://www.goldcorp.com/_resources/news/Reserves_2010_FINAL.pdf
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