Coronet Metals Gets On Base
November 18, 2011
Ichiro Suzuki is a major league baseball player who hit only 90 home runs in 7,075 career at bats. That's a 1.2% home run success ratio. Yet Suzuki is considered one of the most effective batters ever to play the game. Why? Because he specialises in hitting singles. Short, sharp, surgical swings that put him on base and in a position to advance.
Coronet Metals (CRF-TSX.V ) is the Ichiro Suzuki of Latin American gold explorers.
While other companies swing for the fences (and usually miss) Coronet is scouring the back country of Peru, building a portfolio of small near-term gold producers with low cash costs.
After a year in business CRF is already on base with the acquisition of the Yanamina Project, located in Ancash province, about 175kms northeast of Lima, Peru.
The Ancash region has a long history of profitable gold production. On the same geological trend as Barrick's Pierina (7.5M/oz) gold mine, Yanamina has an NI 43-101-compliant inferred and indicated resource of 286,000oz of gold grading between 1.6 and 2.0g/t, and 1.4M/oz of silver grading an average 8g/t.
The deposit is largely unexplored. An independent January 2010 pre-feasibility study estimated cash cost of production at $271/oz. The cost of building the mine will be around $28 million.
Coronet CEO Joel Dumaresq is a merchant banker and venture capitalist who also has a strong operational background in technology and resources. Mr. Dumaresqs' expertise is deal making and company building.
"Coronet metals is not selling dreams," confirms Dumaresq, "We are building a portfolio of gold projects which are either in production or close to it. We have a veteran management team on the ground in Peru that has a track record of developing assets quickly to production."
Coronet Highlights:
- Mandate- To build a substantial junior gold mining and exploration company by acquiring advanced, near production, low cost assets in Latin American countries;
- Acquisition opportunities- Strong base of contacts in South America, Central America and Mexico to source potential acquisitions;
- Disciplined and explicit criteria for assessing opportunities;Mining-friendly jurisdiction- Peru is one of the major mining countries worldwide and is the world's largest producer of silver and sixth largest producer of gold;
- Peruvian S&P foreign long-term credit rating of BBB
- Experienced Management- Proven team in place that has experience in all aspects of the development and financing of resource companies;
- Extensive exploration, mine construction and operational experience in Peru.
In June 2011 Ollanta Humala was elected Peru's new President. There were fears he would attempt to nationalise the mining industry. But Dumaresq clearly saw things differently as Coronet continued shopping for gold assets in Peru.
As it turned out, Dumaresq's instincts were right.
Since taking office, Humala has secured $15 billion in new foreign pledged investments. The International Monetary Fund (IMF) has publically supported Humala's new mining taxation scheme. Humala is re-inventing himself as a business pragmatist.
On November 14, 2011 Peruvian Prime Minister Salomon Lerner announced that the government is seeking to apply a new mining plan of action, which will eradicate "informal" [illegal] mining.
"We are very clear that informal mining should not exist," said Salomon, "we want to do justice with sustainable mining to ensure water resources and resolve problems with agriculture."
This is music to Coronet's ears. With industry-low cash costs, they are capable of mining profitably while improving the education and health of the local population.
"Coronet has hired an experienced team of Peruvian social specialists to engage with the local community to obtain the approvals and permits necessary to move the Yanamina project towards production," says Dumaresq, "Our team is confident that they can establish broad community support for the project".