South American Silver Corp. (SOHAF / SAC.TO) is looking for silver in Chile. I've never been down there, nor have I eaten Chilean food or dated Chilean women. I suspect the latter two are quite spicy. Mining isn't so spicy but someone has to do it.
The CEO was educated as a mining engineer but doesn't mention who employed him on any of the projects he worked in his career. His LinkedIn profile says he is currently the VP for Project Development at PolyMet Mining, and doesn't mention his position with South American Silver. He ought to update his LinkedIn bio; meanwhile South American Silver's press release announcing his hiring sheds a little more light on his background. I'm harping on this because the CEO's decisions in an exploration-stage junior mining company depend very much on an understanding of geology. Other disciplines matter more in later stages.
The Escalones project has an Inferred Resource grade for Cu of 0.41%, which is toward the lower averages of most commercially successful copper deposits in the 21st century. One compensating factor is that this is a fairly large deposit. The equivalent grades of the other minerals are negligible. Reading the project's drill and surface sampling highlights gives me the impression that the ore grades are highest nearer the surface and not very deep.
The company is also contesting the Bolivian government's revocation of its subsidiary's mining concessions. It's unrelated to the property above but nonetheless casts a cloud over the company. This Malku Khota project is potentially very valuable but the company absolutely must resolve the legal dispute in its favor.
Check out their financial statements for Q3 2012, dated September 30, 2012. They had US$29.5M cash on hand and have a burn rate of about US$1M per month. That gives them more than two years to realize value from their projects.
I am not investing in South American Silver Corp. because I prefer mining companies that have de-risked their projects by establishing 2P reserve data. I also prefer spicy women, as I hinted in my opening paragraph.
Full disclosure: No position in South American Silver Corp. at this time.
