The following slides are to accompany the podcast interview with David Gower that will be released later this week. David and I will be referring to them. The podcast is audio only. This is published in advance so you can prepare. There are a lot of moving parts but David and I will cover it all as best we can.
These visuals are here to help you follow along and IMPORTANTLY so you can verify and double check any of the data presented here.
The main purpose is to give investors a clear understanding of:
- the company
- Emerita's plausible future value
- the many forthcoming re-rate newsflow events
- Spain as a mining jurisdiction
- how the Andalucia Region where all of Emerita's property is located in the Iberian Pyrite Belt has recently become one of the most desirable destinations for capital in the mining sector due to:
- the recent change in Government
- new mining laws that promote underground mining and simplify permitting
- the EU's announcement of plans to invest over $3 Billion Euros in the belt via the mining industry
- address and dispel some of the silly rumours and misinformation a few bad actors have been injecting into various social media platforms to try and damage shareholders.
Secondarily, this also serves as a guide to the homework I do before committing my first dollar of ownership into an investment. I am an investor, not a trader. There is always time to do proper due diligence. Great investments usually don't have fleeting shelf-lives.
This is a long and comprehensive talk. A lot of technical information will be discussed in detail so I suggest you get yourself a drink, pencil, calculator and a notebook.
Now let's get to work.
"The Data is The Data. The Math is the Math." Regards Doc Jones
PAYMOGO Land Package: 100% owned, Zero Royalty
The historical resources total +14 million tons of high-grade Zinc, Lead, Gold, Silver, Copper were drilled out by Rio Tinto and Phelps Dodge
Most of the historical resources across these deposits didn't include assaying for all Gold and Silver.
Figure 1
Figure 2
Figure 3
Figure 4
LA INFANTA ULTRA HIGH-GRADE: HIGHEST VALUE RECORDED IN RESOURCE BODY = $2671.70/Ton
Figure 5
Figure 6
Recent surface sample assays that extended strike 3 x from 450 meters to +1200 meters
- Metal Values: $1470, $565, $2146, $2447, $2002, $2415, $1979, $1577
La Infanta assays broken down:
- Lowest value = $565.76
- Highest = $2446.88
- Average including all gold and silver = $1825.46.
- Historically Resource Average = $1000/ton one of the highest in the world
- On average 82% higher then in historically resource grade and grade increasing as they step out along strike at surface.
NOTE: Remember the furthest hole along strike at La Infanta intercepted $1696/ton in value over 5.3 meters
- No drilling has been preformed in 20 years.
The results are outstanding to say the least now that all the gold and silver are included. Gold wasn’t ever assayed for at La Infanta prior
La Infanta Results above: Multiple samples exceeding $2000 USD
Figure 7 Historical drill holes at La Infanta
Figure 8. Historical Drilling Table multiple intercepts exceeding $1500/ton USD in value at La Infanta
EL CURA
“El Cura deposit, located on the left bank of the River Malagуn, and in the middle of the other two deposits had a separate history; it also shows shallow workings from roman times. After a long period of inactivity and according to the mining engineer and writer Gonzalo Tarin (1886) towards the end of the 19th century, some old shafts were explored and a 1.25m wide intersection of sulfide mineralization rich in copper, lead and silver was found. The mining group sold the tenements in 1872 to the Malagуn Mines Company, which after producing about 300 tons, abandoned the tenements. Some exploration took place in 1938 and 1943. Phelps Dodge explored the deposit in 1975 and 1985.”
“ In El Cura deposit an adit from the 19th century of less than 100 meters, presumably to intercept the mineralized lenses, is known to be buried. There is also a 60m deep shaft, that intercepts two mineralized lenses 900 m apart, at 47 m depth. Another shaft, to the west also intercepted a lens. In 1946, the explorer Pinedo Vara found a pile of ore with the following grades 5.7 % Cu, 14.0 % Pb, 24.0 % Zn, 2.0 % Sb, and 580 g/t Ag.”
Figure 9
- “ore with the following grades 5.7 % Cu, 14.0 % Pb, 24.0 % Zn, 2.0 % Sb, and 580 g/t Ag.” = $2369.69/ton USD
- Multiple buried lens = possibly multiple high grade deposits
- Matsa had filed a drill plan with the Government Of Spain prior to loosing land package to Emerita that was HEAVILY WEIGHTED to drill out El CURA vs the other 2 high grade deposits/
- El Cura land area sits above both the two separate parallel VMS structures where they are their thickest that created the high grade deposits of of Romanera and La Infanta
- Historically data from Rio Tinto is missing and believed held by Matsa
- Internal documents written by Rio Tinto obtained by Emerita outline at least 2 million tons of La Infanta type mineralization.
Figure 10
ROMANERA DEPOSIT: Not all PM assays included, last hole along strike hit +20 meters high-grade.
Figure 11
Romanera Assays: Multiple samples with the gold and silver alone +$400 USD The highlighted area show the incredibly high gold and silver credits in the samples.
Figure 12
Metal Values: $984, $999, $515, $670, $418, $1159, $721, $973, $656
Romanera Assays explained:
Low = $418.25
High = $1159.47
Average including all gold and silver = $788.42
Historically Resource Average = $375/ton
On average +100% higher due to full assays for gold and silver. this is the first time that was ever done.
The implications are huge to the upside due to extremely high values of gold and silver shown above because most the 11.2 million tons of historical resource wasn't assays fully for gold and silver. That means those tons are most likely worth a lot more than reported historically.
This also bodes extremely positively for the expansion of resource through drilling later this year.
Remember the last hole drilled along strike intercepted a +20 meters of high-grade mineralization. See below.
Figure 13
PAYMOGO 2.0 Adding Ontario Land Package
- On strike of trending Clutters and/or String of Pearls VMS High Grade Deposits to Paymogo
- Closest Deposit is Romanera Gross 34 Million tons including 11.2 Million ton already drilled out
- at least 3 Mineralized Zones indentified
- Multiple historical working and open-pits
- Look just like Noranda Mining Camp, Val d'Or in Quebec, Bathurst Mining Camp, Matabi in Ontario, all Clutters of VMS deposits
- Emerita listed on Government of Spain website as the owners
Figure 14
Aznalcollar Project: Three Deposit (copper, silver, zinc, lead, gold)
- Listen for discussion of legality of case, where is it at, plausible outcome, resolutions and timelines
RESOURCES THAT ARE UNDERGROUND MINEABLE and OPEN FOR EXPANSION
1) Los Frailes 28 Mt = $11 Billion USD in Gross Metal
2) Aznalcollar past producing open pit: 43 Mt = +13.5 Billion USD in Gross Metal
3) No-Name High grade Lens (skinny one in the middle) No historical resource but has several high grade drill intercepts comparable to Los Frailes in grade and composition.
Total defined historical resource: Minimum of 71 Million Tons valued at +$24.5 Billion USD / Average value per ton = +$345 USD
Figure 15 Aznalcóllar Package Deposits
It's messy but the numbers are shocking
Figure 16 Aznalcollar Mine Resource, look at just the Gold And Silver by-product alone is over $5.2 Billion , including Zinc Copper Lead = +$13 billion / + $300/ton
Figure 17 Prices in commodities have increased since I originally published the below which I found in a book from the 1984 Moscow Copper Symposium
Figure 18 Los Frailes Upside beyond 28 Million Tons, THE GOLD LINE
Figure 19 New Ground near Aznalcollar Acquired Never Tintillo
- 8 mineralized zone identified
- Trucking distance to Future Aznalcollar/Loz Frailes Mill Site
- Multiple past producing open pits and old workings
Figure 20 Close up of Nuevo Tintillo
Enlarge the area the pink box, you will see:
- 5 old shallow mine working
- multiple points where fault structures intercept creating the best environment for high grade mineralization to occur.
- To the west more clusters of old shallow mine working 6 total
OTHER STUFF:
- David said in the ZIMTU webcast “He expect cost for mining and milling to be about $100 a ton, at even as high as $120 a ton we’ll make healthy margins” Current blended value at Paymogo is $500/ton
- Net Payable Metal = Gross Metal x Recovery Factor per Production Stream
- How to figure tons in general: Length x Width x Depth x Density (expressed as number of Ton per cubic meter) Note: Copper, Lead, Gold, Zinc, Silver are dense metals the average bulk density per ton is +3.5 Tons/meter. Example 100m x 40m x 100m x 3.5 = 1.4 Million tons
- Treasury (listen to podcast)
- Share count (listen to podcast)
- The fake news (listen to podcast)
- Watch SMALLCAPSTEVE interview of youtube where David says "400 million ops of silver alone"
Paymogo AS-IS TODAY Financial Analysis with no upgrading of value from full assays for PM or expansion of open deposits
- Blend average value is $500/ton x 75%-80% recovery = $375 to $400 Net Payable Metal per ton (NPM/t)
- Mine Level Margin per Ton (at 77.5% blended recovery): Average NPM/t = $387.50 - Average Cost Per Ton (-$110) = $277.50 MLM/t
- Total Mine Level Margin Life of Mine payable metal AS-IS: 14 Million Tons x $277.50 MLM/t = $3.885 Billion
Assuming a 4000 ton/day, 1.4 million tons a year, 10 year mine life AS-IS
- Cashflow Per Ton: MLM/t - Maintenance Per ton + G&A + Transportation + Smelter charges per ton on concentrates: $277.50 -$10 -3 - 5-40 = $219.50 CF/t. (Smelter charge at $160/ton of average value per ton of $500 concentrated by 4x to $2000 ton then shipped to Smelter. 1/4 of $160 = $40 per pre-concentrated ton)
- CF/t x Total AS-IS Resource Tons Life of Mine EXCLUDING corp income taxes or reclamation expense or adding back in depletion expense or amortization expense of fixed assets, development costs (mill, equipment, etc) or adding back in prior losses carry forward: : $219.50 x 14 million ton = $3.073 Billion CASHFLOW LIFE OF MINE which is 10 years, Annually CF $300 Million.
I suspect after subtracting addition expense and adding back in non-cash charges, the annual FCF will be +$200 Million USD a year/ +$2 Billion life of mine over 10 years.
Assuming $400 million USD for development and cost of Mill (4000 ton/day) the mine pays out in approx 14-16 months net of corp income taxes or reclamation expense or adding back in depletion expense or amortization expense of fixed assets, development costs (mill, equipment, etc) or adding back in prior losses carry forward.
Upside Case of Paymogo doubling in size to 28 Million tons
- Growth from expansion of current deposits, upgrading of value per ton from full Gold and Silver Assays and additional discoveries on Paymgog and Ontario land package feeding one Mill Complex
$500/t blended average grade x 28 million tons x Recovery factor of 77.5% = net payable metal = $10.85 Billion in Payable Metal, total FCF in excess of $5.5 Billion USD, life of mine FCF would increase due to economies of scale as fixed cost would to spread over more tons and life of mine extended by a decade.
Final Thought Arizona Mining was bought out for +$2 Billion by South 32, the Aznalcollar Project has:
- Higher Grade per ton at Aznalcollar Project
- Ore outcrops at surface vs Arizona Mining needs to sink a deep shaft cost $500-1 billion in additional Cap Ex
- Already approved by Gov't whereas Arizona is facing multiple barrier from the US Gov't
- Total Gross Metal at Aznalcollar Project exceeds that of Arizona Mining
- Total Tons at Aznalcollar will drastically increase with intensions at depth where deeps holes at Los Frailes +40 meters think, Aznalcollar +30 meters thick in high grade and no tons booked on third High Grade No Name Lens in the middle.
Final Note:
Emerita in my experience and opinion is a once in a decade opportunity to make +20x returns over 2 years as these catalyst resolve
List of coming Catalyst = Rerate opportunities
1) Aznalcóllar decision any day now
2) Release of a batch of drill core photos from La Infanta prior to releasing assay
3) Release of El Cura historical drill data
4) Geophysical results released across Paymogo Project detailing scale and size of upside
5) The finalized acquisition of the Ontario Land Package and release of historical mining data and mineral occurrences
6) Final permits at El Cura and Romanera
7) Drill assays from La Infanta
8) Drilling starts at Romanera
9) Drilling at El Cura
10) phrase 2 of La Infanta drilling
11) assays from Romanera with full Gold and Silver assays
12) Assays from El Cura
13) assays from phrase 2 La Infanta
14) Phrase 2 at Romanera and El Cura
15) 43-101 on La Infanta
16) assays from phrase 2 El Cura and Romanera
17) 43-101 Romanera and El Cura
18) geophysics at Ontario and drilling (new discovery)
19) 43-101 on Ontario
20) PFS on Paymogo 2.0 etc etc etc
Th news flow constant for the next 2 years and they have the capital the fulfill the lions share of it. Plus this doesn't include the Tremendous news flow once AZN is awarded, drilling, 43-101, FS, grants from EU for AZN and Paymogo 2.0..
Post interview: This is the fourth deposit on Aznalcollar David mentioned believed to be 10 million tons
A fifth deposit discovered post interview
