Yesterday I finished a three-day EduMine webcast on Mining Investment – Understand the Risks. Today I took my own advice to heart and attended a presentation by Luquman Shaheen of Panoro Minerals Ltd on their projects in Peru. Should I invest? Should I advise you to invest? Should we join Hudbay Minerals who own some seven percent of the company in the excitement of new prospects in a mining-potential-rich part of Peru?
It is easy to get caught up in the excitement of copper, gold, and silver all in one place and the promise of new mines ranging from 20,000 to 80,000 tons a day. The consultants AMEC and SRK are mentioned in easy offhanded reference. Surely they are getting it right?
It is easy to understand why excitement builds and shares are purchased even though the drilling is but ongoing and there remains much infill drilling to be done and exploration to undertake to expand the big ore bodies. The setting of the presentation counts: a luxury hotel in the heart of Vancouver; suave ladies to guide you in; fine food in heavy silver; tall men in impeccable dress; sage questions; and eager young faces shining from the young men in the room.
Then there was a perfectly credible presentation by Luquman Shaheen. He knows his facts; he exudes confidence; yet he is demure and almost likable in his hopes and plans. In answer to a question: “Are you building your company to sell it; or are you looking to develop into an operating entity?” he answered more or less as follows.
“Let us start with Antilla with a stripping ratio of but 0.9, a rate of 20,000 tones a day, and a capital need of $400 million. Then let us proceed to Cotabambas at 80,000 tons a day and a capital guestimate of $1.5 billion. The immediate plan is to do the drilling using capital we have, get the environmental and engineering studies done, and produce a bankable feasibility study. Things will flow from that.”
The excitement is enhanced by these facts about nearby mines and prospective mines:
Xstrata has announced over $6.7B of investment into its Las Bambas and Antapaccay copper projects in the same region as Panoro’s projects in Southern Peru. Also, Hudbay Minerals and First Quantum Minerals have acquired the Costancia and Haquira copper exploration projects and are advancing them to development. In August 2012 Hudbay announced commencement of a $1.5B investment to construct the Constancia project.
This would appear to be Canadian mining movement in South America at its best: Vancouver luxury; Canadian and international money to judge by the range of folk-origins represented at the tables; and a strong Peruvian presence including Peruvian geologists, engineers, managers, and directors.
This is not a recommendation to buy. I do not and cannot do that. I am not qualified to even opine. But I do wish them luck, success, and I shall watch their forward advance with great interest. Hope this helps you too.