Despite the recent drop in gold and silver prices, resource companies continue to explore and drill their properties simply because they can still be mined very profitably. Esperanza Resources (EPZ – $1.34) is one of those companies. We sat down with Mr. Bill Pincus, the Company’s President and CEO, to discuss the market turmoil and its effects on Esperanza.
Mr. Pincus talks about the Preliminary Economic Assessment that was recently published for the Company’s 100% owned Cerro Jumil silver/gold property in Mexico. He emphasizes that this is a typical open pit, heap leachable project with an estimated average production of 106,000 ounces of gold per year, which can be mined at $499 per ounce. Making it a technically straight-forward and economically viable project with a Net Present Value of $122 million at a very conservative $1,150/oz gold price.
The interview also touches upon the expansion potential for Cerro Jumil. The Company started a 15,000 metres drill program in April of this year and first analytic results showed additional mineralized veins between 1.00 and 3.85 grams of gold per tonne on the property. Furthermore, mapping and sampling of the greater Cerro Jumil concessions (15,025 hectares) revealed 10 additional target areas that warrant further exploration.
Mr. Pincus also reveals his plans for the Strieborná silver/copper/antimony property in Slovakia. This property is 100% owned by Global Minerals Ltd., which in its turn is 28% owned by Esperanza. Strieborná has an NI 43-101 technical report that includes 1.9 million tonnes in the Measured and Indicated category grading 231.7 g/t silver, 1.1% copper, and 0.7% antimony and 1.5 million tonnes in the Inferred category grading 180.0 g/t silver, 0.9% copper and 0.7% antimony.
Listeners also find out that Esperanza is well-funded with $23 million in its treasury. This is more than enough to continue the development of its properties and to bring Cerro Jumil into full feasibility in the course of 2012 with the ultimate goal of advancing the property to production in a later stage.
While Esperanza Resources has made some significant progress during the past 12 months, its stock price is back where it was 1 year ago. We advice you to take advantage of the drop in the Company’s share price. If you haven’t bought any yet, start by buying 1,000 shares and watch the story develop. We reiterate our buy recommendation with a price target of $2.11.
Enjoy our interview and feel free to leave a comment.
|For important disclosures, please read our disclaimer.|