Sollte unbedingt jeder lesen:
1) CMM has only done one financing in 17 months (almost 1.5 years). This is an important fact that many people may not fully realize. In addition, the one financing was primarily for acquisition, development and royalty buy back purposes. If they make it through 2007 without a non-acquisition financing (which is looking to be the case) then it will be 27 months (2 yrs and 3 mths). Personally (clearly, others disagree), I think that is an amazing accomplishment given some of the challenges in 2006:
*significant cash layout associated with the waste removal program
*replacement of old equipment/parts and delays in delivery of crucial new trucks and the RC drill
*lost cash flow from Lamaque start up being delayed
*lost cash flow from power/generator problems, as well as ramp up delays due to required upgrades at San Juan
*dishing out cash (and shares) to old unsecured creditors from the McWatters era – that is now completed and closed off
2) During the 17 month period the company still managed to realize all of these accomplishments:
*not only did CMM not grow their debt position, but they managed to significantly clean up their balance sheet by eliminating the substantial debentures (through conversion to shares)
*bought back royalties which is turning out to be a great move in this high goal price environment – when people compare cash cost they should look at the total cash cost for other companies (not the published cash cost), as many companies still have to make royalty payment, which are shown only at the total cash cost level. When you do that you will see that CMM’s cash cost per ounce becomes more competitive.
*achieved all 5 quarters of positive cash flow since commercial production began, with net profit established in the most recent quarter
*diversified their mining assets by establishing a second producing operation in a completely separate region in the world
*initiate a drill programs at both Lamaque and San Juan, which is costly, as we know
*significantly increase their fleet/equipment capabilities and reliability, and they received an added bonus of lower trucking cost per tonne
3) What do people expect when a company pays $26M for a significant mining asset? Of course some upgrades/clean up would be required – new trucks and removing wastes are necessary types of upgrades when purchasing a discounted asset. Peggy knows value. She is not going to pay $720M for an asset (which still needs development and significant outlay in further costs, and will not be in production for another 3 years or more) like Agnico-Eagle did, when she can get something for $26M that requires a little bit of upgrade (and about a year to make it happen). In my opinion, the company appears to have done an amazing job to reach the stage we are at today, especially with such little cash available to them over the past 17 months (I know many people disagree – I’m alright with that). On top of that, they managed to keep our o/s share count relatively low, they did not blow up our balance sheet with debt, and at the same time they did manage to execute our development and exploration plans.
By the way, for the $26M, we got the following:
*a brand new 6,000 tpd milling operation, with the potential of processing 100,000 ounces at capacity from open pit ore (1.8 g/t) and 67,000 ounces at capacity from underground ore (6.0 g/t) – 167,000 ounces or higher (with a mixture of greater underground and lower open pit). Please note that this may not be what the company is targeting, but it is the mill capacity on paper.
*over 4M resource ounces, with 800K (open pit) in the 43-101 reserve category, and soon to be (potentially) another 600K or greater (from underground) to be classified 43-101 reserves
*the Sigma open pit mine and the Lamaque underground mine both coming to us with already developed infrastructure
*significant unexplored land extensions on the S-L property
*a number of past producing and/or highly perspective (high grade properties - Aumaque, Sigma 2, Bourlamaque, etc.) in the Val d’Or area
Where else can you get this anywhere in the world for $26M?
http://www.stockhouse.com/bullboards/...age.asp?no=14283161&t=0&all=0
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