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Hereditary sloth instructs me

Mining PRs and the Ottotrans™, part 81

I need to walk away from the screen this morning and will do once this post is published (opening bell 16 minutes from now), because on watching the pre-market the temptation to add to an already-held short position is becoming very strong. Thing is, adding on a seat-of-pants decision isn’t the right thing to do in this current atmosphere and as I’m generally happy with the portfolio positioning right now along with the level of cash reserve held, any decision can wait until the weekend. At least I hope so.

Anyway, to take my mind off things here’s a Ottotrans on the NR out of Carpathian Gold (CPN.to) this morning, a stock that’s sadly too cheap to effectively short even if it moves up sharply today.

This is what they wrote:

TORONTO, ONTARIO–(Marketwired – Dec 13, 2013) – Carpathian Gold Inc. (CPN.TO) (the “Corporation” or “Carpathian“)
the Corporation, is pleased to announce that its wholly owned
subsidiary, Mineração Riacho dos Machados Ltda. (“MRDM”), which owns and
operates the RDM gold project, Brazil (the “Project”), has received
from SUPRAM, the state environmental agency, the Autorização Provisória
de Operação (“APO”), a provisional permit, allowing it to proceed with
the full operation of its gold producing facilities. The APO provides
the same legal rights as the Licença de Operação (“LO”) and allows the
Project to proceed in the interim while arrangements are being performed
by the government agencies and related entities for the issuance of the
LO.

As
allowed under the previously granted Licença Instalação (“LI”), the
open-pit mining operations have proceeded as planned. A total of 19
million tonnes of material have been extracted with daily rates at
approximately 80,000 tonnes. Mining operations have demonstrated that
the 7,000 tonnes per day of ore production that was proposed in the
Feasibility Study, can easily be exceeded, thereby representing an
opportunity to increase gold production due of the extra processing
capacity of the process plant that is rated in excess of 9,000 tonnes
per day.

Wet
commissioning and start-up of the process plant has taken place and,
with the granting of the APO, the processing and leaching of ore can
commence to produce gold. During the commissioning and start-up phase,
the process plant has been operating on a continuous basis at a feed
rate of 8,500 to 9,000 tonnes per day, which is well above the initial
planned rate of 7,000 tonnes per day. During the start-up period, the
grinding mill consumed energy at approximately 65% of the estimated
power to generate a final product at the design particle size of 80%
passing 53 microns. This reduction in power consumption may represent a
major opportunity for a reduction of the estimated operating cost of the
plant.

The
Corporation will provide further information on its forecasted gold
production and cash costs once the operation has ramped up over the next
few months. With gold now in the circuit it is anticipated that the
first gold pour will be in December and that the project will produce in
excess of 100,000 ounces of gold per year.

“While
the unfortunate delay in the start-up of the operation may have
affected the outlook for the Company and led to a cash shortfall
situation, it is nonetheless a pleasure to report that with the receipt
of the APO the RDM gold project can now commence gold production and be
Brazil’s next gold producer”,
said Dino Titaro, Chairman and CEO. “With
the wet commissioning of the mill and process plant, the Project is now
ready to receive and process ore from the mine, with the expectation of
its first gold pour within two weeks. The entire Corporation is
grateful for the support it has received from all of its stakeholders
during the last three months of uncertainty. In particular, the
financial support of Macquarie Bank through this period has been crucial
and is highly appreciated by the management team and the board of
directors”.

As
previously announced, the Corporation is conducting a review of
strategic alternative options. Even though the Project is now up and
running, this process remains on-going with continued discussions with a
number of parties that have indicated an interest, and which are
presently carrying out due diligence at all levels, including visits to
our operation in Brazil. The Corporation intends to keep moving forward
expeditiously with the strategic review process but there can be no
assurance that any transaction will result. The Corporation does not
intend to disclose further details with respect the process unless and
until the Board of Directors has approved a specific transaction or such
disclosure is otherwise appropriate.

About Carpathian

And this is what it means:

“Look at the gooooold! The shiny shiny gooooold! Don’t look at the company financials, look at the beautiful shiny scrummy expensive gooooooooooooooooooooooooold”

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