Wednesday, October 31, 2012

Panoro Minerals Explores Peru

There's minerals, and then there's Panoro Minerals (TSXV:  PML).  Okay, maybe I should be more sanguine about junior miners but I needed an opener.

Right now their 43-101 shows only inferred resources of 0.23g/t gold and 2.84 g/t silver at their Cotabambas project.  Those are relatively low grades for precious metals compared to many junior peers, so maybe an updated 43-101 with 2P estimates will show more promise.  The CEO isn't a geologist but has long experience in mining.

I always check a startup's burn rate.  Their Q3 2012 financial statement from June 30, 2012 shows CAN$17.9M in cash on hand thanks to a successful private placement this past March.  The same statement shows a quarterly loss of over $630K, so their cash horde should last until October 2014 given present spending.  They will of course have to prepare for production at some point, which will accelerate their burn rate.

They have yet to decide on what style of development is feasible for each project; for example, their Antilla project has small amounts of bauxite that would make heap leaching feasible.  It's good that all of their projects are within the reach of unpaved local roads, but not so good that their most active projects are 30km away from power lines.  Figure step-down transformers and line extensions into that capex budget for the feasibility study.

The belt they're exploring is known mainly for copper.  I await further notice of their feasibility estimates, along with news of just what they plan to do with their gold properties.

Full disclosure:  No position in Panoro Minerals at this time.