Saturday, November 30, 2013

Kootenay Silver Poking Around in Mexico

Kootenay Silver (KTN.V) has gone looking to dig up silver.  I want to know whether they've succeeded, or will succeed.  The CEO is a geologist and his bio states he succeeded with a previous resource company.  Hey, nothing succeeds like success.  The rest of the team has bench strength in mining.

Their Promontorio project in Mexico has a 43-101 estimate of M&I grades but no 2P estimate, which I must see before I can seriously consider an investment.  The size of the M&I deposit at over 92M oz AgEq is significant when you consider that some of the top producing silver mines in the world produce between 5-7M oz annually.

Check out their financial statement for the quarter that ended June 30, 2013.  They had $6.3M in cash on hand and a burn rate of about $270M per month, so they should not have to raise more capital for about two years.  That is a really big margin of safety.

I will wait for this company to publish a 2P resource estimate along with further plans to produce what could be a very long-lived project at Promontorio.  The potentially good news for companies like this is that major producers have to replace the reserves they mine to maintain their value, so they look for acquisitions even in an era of declining grades among most discoveries.

Full disclosure:  No position in Kootenay silver at this time.