On slide 22 of the latest corporate presentation out of Tahoe Resources (TAHO) (THO.to), the company talks up its “Long-Term Project Pipeline” and there are three projects listed, headed up by the La Arena sulfide project as seen in this screenshot:
That’s as to be expected what there being around 2Bn lbs copper and 2m oz of gold to dig out the ground there. It’s also normal they talk up this project as a scoping study is due to be compiled on it starting in 4q16. It’s also normal because according to the TAHO financials, the La Arena sulfides are worth over U$260m in asset and goodwill value. And that’s a lot of money.
So why have TAHO decided to bury their treasure instead? Word from Huamachuco reaches your humble scribe that in a bizarre development, the company has built the latest phase of the oxide leach pad right on top of the projected sulfides pit. In other words, if they ever want to move this asset forward not only will they have to spend all the cash on a new mill, but they’re going to have to spend a whole bunch of extra money moving all the dirt they dumped on top of it, which would be a self-inflicted and totally needless extra expense. The attitude towards this “project” is weird, because sticking a major civil works pad on top seems to imply that it’s not going to happen as a mine. So if not, why is it being given such a high asset value by the company?