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XMFSinchiruna (27.95)

Fortuna's Growing Fortune

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December 10, 2011 – Comments (20)

In case you were wondering why I was a little quiet over the past week, particularly during a week that was not lacking noteworthy developments for the sector, it's because I was down in Oaxaca Mexico touring Fortuna Silver Mines' new San Jose silver/gold mine. I have so much to relate to you all from the experience, and will aim to publish my report(s) next week, but in the meantime I wanted to encourage you to spend some time familiarizing yourselves with the company's story.

The company has done a phenomenal job building and now operating this mine, and similar to the experience of visiting Endeavour's operations, quality is evident at every single turn.

Have fun doing your homework, and feel free to share your findings, thoughts, and conclusions here. After I publish my findings, I'll be prepared to join in the conversation, answer questions, etc.

There was so much to see, we went well into the evening, and I thought the crushing circuit looked cool all lit up at night:

My fluency in Spanish gave me some very special access, including a lengthy tutorial from a project geologist who brought me step-by-step through the current geological interpretation of the deposit and the prospects for resource conversion and exploration upside. I emerged from the experience with as holistic an understanding of a project as I think one can hope to gain with a quick visit.

Stay tuned ... much more to come. And enjoy digging into Fortuna's story and prospects in the meantime.

20 Comments – Post Your Own

#1) On December 11, 2011 at 5:27 AM, skypilot2005 (< 20) wrote:

NYSE: FSM TSX: FVI

Fortuna Silver Mines Inc.

http://www.fortunasilver.com/s/Home.asp

http://www.fortunasilver.com/i/pdf/fs/FinReview1109-FS.pdf

 

Fortuna's key strength is industry expertise in Latin America. Management's knowledge of regional mining, business practices, exploration, geology and regulatory environments has allowed Fortuna to identify and seize opportunities within the region. We are aggressively pursuing and evaluating further accretive acquisitions throughout the Americas.

Two Key Assets

The 100%-owned Caylloma Ag-Zn-Pb-Cu Mine is located in the mineral-rich Caylloma Mining District in the southern highlands of Arequipa, Peru. It is a high grade epithermal vein system with significant untested potential within its over 10,000 hectare land package. Fortuna operates the mine at over 1,200 tpd and is working on the permitting to further increase throughput to 1,500 tpd. Exploration activities include testing of high grade silver and base metal targets within the Caylloma Mining District and evaluation of surrounding properties to identify opportunities warranting more advanced exploration and development.

The 100% owned San Jose Ag-Au Project is a low sulphidation epithermal system located within the Taviche Mining District located in southern Oaxaca, Mexico. On April 26th, 2010 a positive pre-feasibility study (PFS) was published which sets the basis of construction of the Company's second mine, a 1,500 tpd underground silver-gold mine. The PFS indicates an after-tax internal rate of return of 18% and an NPV of US$ 36 million at a discount rate of 8%. Construction activities have started and are on schedule and budget for completion and commissioning of the mine in the third quarter of 2011. Once in operation at a rate of 1,500 tpd, the San Jose Mine will deliver 5 million silver equivalent ounces annually at a cash cost of US$ 6.20 per ounce.

Rapid Growth

Fortuna is a growth oriented silver and base metal producer focused on mining opportunities in Latin America. Since opening the Caylloma Mine in Peru, The Company has become one of Latin America's fastest-growing silver producers. Our second asset, the San Jose Project, will triple the Company's silver equivalent production when it opens in the third quarter of 2011. We remain focused on our goal of building the foundations of a leading silver miner in Latin America, a region where management holds relevant expertise and experience and where we are pursuing additional accretive acquisition opportunities.

http://www.fortunasilver.com/s/Directors.asp

http://www.fortunasilver.com/s/NewsReleases.asp?DateRange=2006/01/01...2011/12/31

http://www.sprott.com/Docs/Performance/canadian.pdf

#  6

Sky Pilot

Official Web Link Assistant to Sinch

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#2) On December 11, 2011 at 10:09 AM, XMFSinchiruna (27.95) wrote:

Thanks Skypilot .... that provides for an excellent start to DD.

I recommend the corporate presentation as well.

http://www.fortunasilver.com/i/pdf/Presentation.pdf

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#3) On December 12, 2011 at 11:07 AM, rfaramir (29.53) wrote:

"wondering why I was a little quiet"

I assumed you were busy purchasing shares of silver miners while the price was low, and were required to keep quiet as per Fool policy.

Speaking of which, is it true that you can purchase all you want of an ETF, say SIL, while talking up its constituent parts?

I hope it is true, and not considered a loophole that they want to close, because the opposite would be worse. Purchase an ETF, and be prevented from talking about any of its components for 20 days (10 pre- and 10 post-purchase). That'd keep you silent for way too long!

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#4) On December 12, 2011 at 11:54 AM, kdakota630 (29.77) wrote:

Great blog, TMFSinchiruna, and love that you're making these trips to various mines.

I was thinking perhaps you were quiet because of the troublesome blogging issue at The Fool.  Having been away for the weekend I had to check your page specifically to see if you'd posted anything.

In the meantime, as always, please keep up the great work.

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#5) On December 12, 2011 at 11:57 AM, johnybottom (< 20) wrote:

Any news related to Alexandria Minerals lately? Price is going cheaper. I've been looking to enter, but am hesitant because of the low share price.

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#6) On December 12, 2011 at 12:22 PM, XMFSinchiruna (27.95) wrote:

johnnybottom,

That price action is not news driven. I'll check in with mgt and make sure we're still on track for the resource estimate release early in the New Year. That's the principal catalyst I'm in position for.

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#7) On December 12, 2011 at 10:10 PM, skypilot2005 (< 20) wrote:

http://finance.yahoo.com/news/Cardero-Receives-Draft-iw-276393589.html?x=0

Cardero Receives Draft Preliminary Economic Assessment For Carbon Creek Metallurgical Coal Deposit, NE BC 12/12/11

Cha Ching.......

:)

Sky Pilot

Official Web Link Assistant to Sinch

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#8) On December 12, 2011 at 11:26 PM, skypilot2005 (< 20) wrote:

http://finance.yahoo.com/news/Uptick-Silver-Demand-Benefits-iw-2462060062.html?x=0

 

12/12/11

“Hecla Mining Company is the largest and lowest cash cost silver producer in the U.S. In the third quarter the company had 2.3 million ounces of silver production at an average cost of 67-cents per ounce, and silver prices that averaged $37 per ounce.”

 

 

http://finance.yahoo.com/news/Hecla-Maintains-2011-bw-1774809946.html?x=0&l=1

 

Hecla Maintains 2011 Production and Cash Cost Guidance 11/21/11

Sky Pilot

Official Web Link Assistant to Sinch

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#9) On December 13, 2011 at 12:18 AM, Sturmudgeon (< 20) wrote:

johnnybottom: isn't that just when you should get in?? I am already in, and saving to buy more around Christmas.. but it will be good to see Sinch's take on it if he can get back to you this month...

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#10) On December 13, 2011 at 12:20 AM, Sturmudgeon (< 20) wrote:

johnnybottom: reason being... just cannot discount all of Sinch's info on this several weeks back

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#11) On December 13, 2011 at 12:31 AM, Sturmudgeon (< 20) wrote:

sky pilot:      thanks for the link... BUT.... I read through all of that, and I do not fathom the "cha-ching" comment... it appears to me that caution should be used on CDY purchases at this time..

can you indicate your "positives" please??

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#12) On December 13, 2011 at 12:47 AM, SN3165 (< 20) wrote:

Buy the dips... Alexandria and Brigus look good here. "Stay the course and do not abandon ship" is the motto I stick to.

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#13) On December 13, 2011 at 7:03 AM, skypilot2005 (< 20) wrote:

 On December 13, 2011 at 12:31 AM, Sturmudgeon (< 20) wrote:

"sky pilot:      thanks for the link... BUT.... I read through all of that, and I do not fathom the "cha-ching" comment... it appears to me that caution should be used on CDY purchases at this time..

can you indicate your "positives" please??"

 For a start, look at this article:

http://www.fool.com/investing/general/2011/11/01/how-you-can-beat-my-latest-40-gain.aspx?source=iaasitlnk0000003

 Of course, it depends on how you feel about the future of coal.

 I like it and own Cardero. 

I generally "buy and hold".  If you are a "Trader", that changes everything IMO.

Sky Pilot

some more "links":

http://www.cardero.com/s/carbon_creek.asp

http://finance.yahoo.com/news/Cardero-Announces-Letter-iw-941227344.html?x=0&l=1

http://finance.yahoo.com/news/Cardero-Receives-Final-2011-iw-2163331176.html?x=0

 

http://finance.yahoo.com/news/Cardero-Options-Organullo-iw-72603037.html?x=0

Cardero Enters Into Letter of Intent to Acquire Coalhunter Mining Corporation

Press Release Source: Cardero Resource Corp. On Friday March 4, 2011, 8:00 am EST

 

VANCOUVER, BRITISH COLUMBIA--(Marketwire - 03/04/11) - Cardero Resource Corp. ("Cardero" or the "Company") - (TSX:CDU - News)(AMEX:CDY - News)(Frankfurt:CR5 - News) and Coalhunter Mining Corporation ("Coalhunter") announce that the companies have entered into a letter of intent (the "LOI") whereby Cardero will acquire all of the outstanding securities of Coalhunter not held by Cardero (the "Transaction"). Cardero currently holds approximately 45.5% of the common shares of Coalhunter, a private British Columbia company, which holds a 75% interest in the Carbon Creek Metallurgical Coal Deposit, located in northeast British Columbia, Canada and historically estimated to contain 132.8 million short tons (120.47 metric tonnes) of coal.

 

 

 

 

 

 

 

 

 

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#14) On December 13, 2011 at 8:57 AM, johnybottom (< 20) wrote:

Well I did get into ALXDF.PK for a few shares. I figured with an almost 20% drop midday yesterday to a 52-week low might be a reasonable time.

I think I'm a bit too heavily invested in miners now, but time will tell. Learning.

Next up, Fortuna!

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#15) On December 13, 2011 at 9:08 AM, mhy729 (34.13) wrote:

johnybottom,

I'd suggest sticking to the "safer" plays like Fortuna for most of your investment $ allocated to miners, and establish smaller positions in the more speculative picks like ALXDF, especially if the recent share price weakness makes you somewhat uneasy.  Yes, you may miss out on making even more money, but being comfortable in your positions is always important.  JMHO. 

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#16) On December 13, 2011 at 11:29 AM, johnybottom (< 20) wrote:

Thanks for the advice, I'm still over 50% cash, so I'm not amazingly worried. In another couple months of the new year I'll re-assess and likely pare back some mining positions.

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#17) On December 14, 2011 at 10:49 AM, XMFSinchiruna (27.95) wrote:

I spoke with Alexandria Minerals' Mary Vorvis yesterday.

They are flush with $5m in cash, have 2 drills operating at Akasaba, and confirmed the timing of their initial resource estimate for Akasaba during January. JV negotiations on a number of fronts are ongoing.

I also liked Mary's confirmation that Agnico-Eagle was first in line to participate in their last share offering in order to maintain its 9.9% stake.

Again, the Goldex closure is a very facsinating development.

mhy is correct that all non-producing microcaps must bew viewed as speculative, but among the speculative stocks of its ilk that I have examined, Alexandria continues to stand out.

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#18) On December 14, 2011 at 10:01 PM, skypilot2005 (< 20) wrote:

On December 14, 2011 at 10:49 AM, TMFSinchiruna (98.67) wrote:

I spoke with Alexandria Minerals' Mary Vorvis yesterday.

They are flush with $5m in cash, have 2 drills operating at Akasaba, and confirmed the timing of their initial resource estimate for Akasaba during January. JV negotiations on a number of fronts are ongoing."

Relevant "Links":

http://www.azx.ca/news/2011/news20111121.html

 

11/21/11

Alexandria Makes New Gold Discovery Beneath Akasaba Mine: Drills 14.10 g/t Au Over 5.00 Meters

Toronto, Ontario, November 21, 2011

 

http://www.azx.ca/news/2011/news20111115.html

 

11/15/11

 

Alexandria Expands Akasaba Eastern Deep Gold Zone to Below 500 m Vertical Depth **

http://www.azx.ca/news/news2011.html

 

http://www.azx.ca/news/2011/news20111108.html

 

Alexandria Provides Operational Update

Toronto, Ontario, November 8, 2011 - Alexandria Minerals Corporation

 

Disclosure: I own a chunk of Alexandria.

Sky Pilot

Official Web Link Assistant to Sinch

 

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#19) On December 14, 2011 at 10:10 PM, skypilot2005 (< 20) wrote:

 On December 14, 2011 at 10:49 AM, TMFSinchiruna (98.67) wrote:

 "Again, the Goldex closure is a very facsinating development."

http://www.niogold.com/news/media/northern_october27.pdf

 Sky Pilot

Official Web Link Assistant to Sinch

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#20) On December 14, 2011 at 10:43 PM, skypilot2005 (< 20) wrote:

VANCOUVER , Nov. 10, 2011 /CNW/ -

Fortuna Silver Mines Inc. (NYSE: FSM - News) (TSX: FVI.TO - News) (BVL: FVI.TO - News) is pleased to announce that it has filed its financial statements and MD&A for the three months ended September 30, 2011 . The documents are available on SEDAR and have also been posted on the Company's website at www.fortunasilver.com.

Third quarter 2011 financial highlights:

Record net income of US$10.31 million, compared to a loss of US$0.77 million in Q3 2010

Revenue of US$32.08 million, compared to US$17.88 million in Q3 2010

Cash flow from operations before changes in non-cash working capital of US$18.21 million, compared to US$7.73 million in Q3 2010

Operating income of US$14.89 million, compared to US$1.03 million in Q3 2010

Cash position (including short term investments) and working capital as at September 30, 2011 were US$62.73 million and US$70.22 million respectively.

Silver production of 660,749 ounces up from 474,489 ounces in 2010; silver accounted for 70% of revenue Cash cost per silver ounce, net of by product credits, of US$1.45

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