IKN

saucy doubts and fears

South American Silver (SAC.to): No, it’s not a surprise (for those who have been looking, anyway)

One of the things I’m now getting about this whole South American Silver (SAC.to) episode are a bunch of people saying that the Mallku Khota incidents have sprung up out of nowhere and have obviously been imported into the region by outside agents in the last couple of weeks to screw things up for Johnny Foreigner in Bolivia and all that kind of thing.
Well folks, that’s a crock of dung. I mean, we here at IKN were telling you about the obvious signs of troubles at Mallku Khota six eight months ago. Here’s what was written at that time:

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx

November 10th 2011

South American Silver (SAC.to): It’s not what they say, it’s what they don’t say

South American Silver (SAC.to),
the junior developing the Mallku Khota silver project in Bolivia and
run by arch-sophist Greg Johnson, reported its 3q11 numbers this evening
along with the usual blah-de-blah you get from a company with more
style than substance. But scratch the surface and you get to see that
not all is going swimmingly Chez SAC.to.

Let’s start with this NR dated March 31st 2011
(last day of 1q11) that went heavy on the pomp and circumstance while
announcing the company’s PEA (scoping study) results and included the
line “Budget of $16 million approved for 2011 with Pre-Feasibility activities beginning in Q2.”

Next, we skip to the 2q11 report NR here, which noted that, “During the 2nd quarter ended June 30, 2011, expenditures at the Malku Khota project totaled approximately U.S.$1.0 million.”

And so we get to tonight’s NR for the 3q11 numbers that has this line: “During the 3rd quarter ended September 30, 2011, expenditures at the Malku Khota project totaled approximately U.S. $0.9 million.”

And
while we’re at it, both quarterly NRs noted in more than one spot that
community relations work was ongoing, with meetings and suchlike. Also
both the 2q11 and 3q11 NRs said, in the exact same words, that the cash
had been spent this way: “Work focused on metallurgical testing,
environmental baseline data collection, community meetings and various
engineering optimization studies
.”

And
what does all this mean? Well, we can fluff around and start throwing
different marginal possibilities into the mix, but when it comes right
down to it there are only two real possibles looking at us. Either…

1) South American Silver (SAC.to) plans to spend $14.1m on the project in 4q11, or…
2) Locals aren’t letting SAC.to drill.

And when you start poking around the interwebnetpipes and start picking up on stories of how protests by locals (yup you guessed it) have stopped activities at
Mallku Khota and accuse the company of polluting nearby lakes and
poisoning their trout farms therein, a little bit of sense is made.
The
tough part for SAC.to is that the prohibited drilling is the number one
most important thing the company has to to move the project from its
current PEA level to the Pre-Feasibility (PFS) level. According to that
43-101 compliant technical report published in May 2011, the
recommendations for moving to the PFS started, first and foremost, with
this:

“Carry
out infill drilling of the deposits in the early stage of the PFS to
ensure that sufficient Inferred Resources are promoted to Measured and
Indicated categories to support the decision to proceed to DFS.”

Then
came a list of other things it needed to do, but the infill drilling
was given top priority for a good reason. That’s because you can include
inferred resources in a PEA but you can’t include them in a PFS and as
nearly half the mineralized tonnage at Mallku Khota is still in the
inferred category, if you can’t include that little lot in the mix your
numbers are not going to impress. But of course, the teeny tiny little
fact that the SAC.to isn’t allowed to drill at its project, when
drilling is the single most important ingredient in the PFS that’s
supposedly coming out in 2012, isn’t mentioned in the company literature
at all. After all, it is a Canadian junior mining company run by an
Ex-NadaGold director. Waddya expect?

UPDATE: Welcome TFmetals readers, people plug dumb stupid enough to have given over cash for a subscription to a random-walk chartist. Ever feel like you’re late to the party, guys? Feel like somebody might have been lying to you all this time, perchance? Now do us all a favour, crawl away and don’t come back.

Leave a Reply

Your email address will not be published.

Hello, you are not in a chatroom, you are in my living room. Opposing views and criticisms welcome, insults or urinating on furniture unwelcome. Please refrain from swearing if possible, it is not needed.