...ob wirklich in den nächsten 1 bis 5 Wochen etwas passiert. :-)
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Dear Sir,
In response to your questions, I can provide you with the following information (Under Australian laws dealing with companies listed on the stock exchange, please be aware that I cannot divulge any critical information that is not already in the public domain).
Our Brazilian project is indeed very promising. I am extremely confident (basically, I am sure) that we will prove a very large tonnage of gold bearing sands once we get the drill rig to site.
The rig is in Brazil, on its way to a dry dock facility in the capital, Brasilia, to clear customs. We have taken the step of taking it from Santos to Brasilia to avoid the risk of encountering problems with corruption/bribes that is apparently common in the large international port of Santos (they understand the fact that foreigners often do not understand local systems and this is an opportunity that many use to take advantage...). On the negative side, this process is taking more actual time to complete. Nevertheless, our legal advisors are based in Brasilia and they have contacts with local importation agents there, so we are in the best hands that we could hope to be in. We expect the rig to clear customs in the next 1 -2 weeks.
Once we begin drilling, it will take about 3-4 weeks to receive the first lot of results from the assay laboratories. We will be hoping that average grades are above 1.0 g/t (the higher, the better). I expect some grades, especially the lower parts of the deeper tailings dams/tanks, to be 2-3 g/t or more.
I hope you understand that we, in management of Ashburton, are as eager to see things move forward as you are, and our disappointment is also great that we are not drilling yet. However, the potential of those sands in Pocone is so attractive that we believe the wait and perseverance is definitely worth it.
Regarding our Australian projects, metallurgical testwork on Wirralie oxide ore continues to assess the potential heap leach recovery rates. We have had some setbacks through incorrect sample preparation by the laboratory, and are now re-doing an additional sample. The latest results indicate recoveries above 70%. This is a reasonably good result as leaching is not yet complete on this sample. (Our scoping studies were based on an assumed recovery of 78% so there is still some way to go). The greatest hurdle at Wirralie is the fact that grades are so low (0.92 g/t for the heap leach scenario). You may be aware of the 'boom' in the resources sector in Australia at present. This has resulted in a severe shortage of skilled labour and an a commensurate increase in labour costs and mining contractor rates. In addition, fuel costs in Australia have risen significantly in the past two years. Unfortunately, low grade operations cannot easily absorb such increases. With the current strength of the Australian dollar, local gold prices are around A$550 (compared with $580 we used in our scoping study), which puts further pressure on the economics of the project. As a result, Wirralie cannot be expected to be able to go into production in the current economic climate. Most likely, the project will need to wait some months in the hope that the gold price, at least, will once again move closer to the A$600 level.
The exploration ground at Wirralie (i.e., Drummond Basin in Queensland) is very prospective. However, proper exploration that might be expected to generate a discovery requires a large exploration budget. At this stage, we believe that spending exploration funds on drilling of the tailings sands in Brazil if far more likely to produce an economic resource than exploration in Australia. Our exploration efforts will therefore logically focus on the tailings sands. Our other projects in Australia are less advanced than the Drummond Basin so these are even less critical. The East Kimberley project (Ashburton 50%) has not produced any encouraging results and we will most likely hand this project back to the other 50% holder.
In closing, in the two years since acquiring Wirralie, we have completed a series of technical programmes which has resulted in an increase in the resource base and a much better understanding of the economic potential of the project. While the project can demonstrate a profitable return (perhaps $4 - $6 million over 3-4 years), in the current economic climate this return is arguably insufficient to counterbalance the associated level of risk, particularly from the viewpoint of a public company.
On the other hand, the Brazil project has proven to have great merit. We expect to be able to drill test the extensive tailings sands in the very near future. If these results prove positive, then there is a strong chance that Ashburton will be in gold production for the next 10 years. To put it in some context, if we assume a MINIMUM of 20 million tonnes at 1 g/t, this gives us 20 million grammes, or some 700,000 oz. At only 70% recovery, we have 500,000 oz. At conservative production costs of US$220/oz, we clear US$300/oz, or US$150 million (= A$195 M).
Obviously, out of this we need to take out taxes, royalties, etc. However, for an exploration cost of under A$2 million, our 75% share is still potentially worth over A$100 million. (Remember, this is the minimum expected scenario).
Our current market capitalisation is under A$8 million.
I hope this addresses your query, and I hope you remain of the opinion that Ashburton remains a very attractive, though obviously speculative, investment.
Kind regards
Tom Dukovcic
Managing Director
Ashburton Minerals Ltd
t: +61 8 9266 0300
f: +61 8 9266 0301
m:+61 40 996 9977
e: tomd@ashburton-minerals.com.au
P.S. Für jene die mit dem Englisch ein wenig Mühe haben. Lasst es euch doch unter www.altavista.de übersetzen. :-)