Ron Tremblay, the President and CEO of Levon Resources, has been leveraging his seventeen years of experience in mining finance and junior mining to lead the exploration and development of the Cordero project. With porphyry silver, gold, zinc and lead, already identified on the site, Levon Resources has recently released a first phase preliminary economic assessment.
Said Tremblay, “The first phase of the PEA is out just to give people a flavor of some of the economics on the project. There are economics on the first four stages of the project. The market wanted to get a feel for economics at this stage of the project.” Now that the economic information has been released, Tremblay said they are continuing to work, “We have a lot more drilling to do.”
The results of the PEA are encouraging. Said Tremblay, “We are excited about the fact that we have an economic resource in the first of the four stages of our pit design, we have an initial nine stage pit design. There is a lot more drilling to do.” Given the early nature of the project, Tremblay isn't sure of its final pit design. He said, “There is no way to know what the final pit will be. We are happy with the numbers we are seeing so far. After taxes, we are looking at a base case of just under a billion dollars in net value. That is just under $5 a share.” The gap between the perceived value and the market valuation is why Levon Resources released their PEA. Said Tremblay, “We are trading at a tremendous discount at the moment. There seems to be a misunderstanding in the marketplace about these types of polymetallic projects, but we are working on clearing that up.”
One of the main reasons for doing the first phase PEA is to address the engineering questions at Cordero. Said Tremblay, “We are answering all of the engineering questions; water, power, transportation, and tailings – all of these areas are being addressed. Everything you need to put a mine into place is there. We don't have any issues that we are aware of. We are well on our way to showing the public and the senior mining companies that we are on our way. We still don't know what the ultimate end game will be. We have a tremendous amount of outlying targets to work on. We are starting to work to the north and to the south. These areas do have some gold and we are going to try to find more of the higher grade portions of this system.”
The “nine stages” of the pit design is a theoretical model that Tremblay and his team are working on. He said, “It is a theoretical pit at this point. We started with the Stage 4 pit at this time because there are certain areas of the bigger pit that we haven't drilled yet. We have to determine if that is waste or if that is more resources. We are also in the process of updating our resource estimate. The current resource is based on 160 holes; I believe we sent forty holes to International Mining Consultants to include in an updated 43-101 resource.”
Upgrading the resource is underway. He said, “We are hoping to have that back in a couple of weeks. It will make a difference but we don't know how much. We have been doing delineation drilling, so not all of the holes are going to hit. We've been drilling deep and expanding to the northeast.”
At the same time as drilling and upgrading the resource, Levon Resources has been working on infrastructure preparations. Tremblay said, “We've done a hydrology study on the water. We've worked with CFE, the power company in Mexico and they have done a study on the power we need for a 120,000 tons per day mill.” Initially, the mill is estimated to handle 40,000 tons per day. Tremblay said, “The engineers are looking at a much bigger project. They have done the power study on the larger design and we have a letter that they can provide the power for that. We have roads available. We have designed the tailings pond with Golder Associates. We have all those designs done to accommodate a 120,000 ton per day mill. Everything is being looked at and designed for the larger mill.”
In terms of financing to support the exploration and development, Tremblay believes that Levon Resources is in good shape. He said, “We have just over $60 million dollars in the bank and about $5.5 million of that is in USD and 200,000-300,000 in pesos. Our budget includes expanded engineering studies. We are doing IP geophysics in the north right now. We are expanding our permit to allow us to drill anywhere on the property and that should be done in the next few weeks. We are well funded and I don't think we'll need any money for the next several years. We won't suffer any dilution. We hope to get some nice surprises along the way.”
With any project there are challenges, and Levon has a few to overcome regarding the investing community. Said Tremblay, “Our biggest challenge is to get the market to understand what we are doing from a project standpoint. We are sitting there in really good shape. We have a large resource that is big and getting bigger. We'd like to find some higher grade. We do have some areas with gold mineralization. We are working to add value to the project by finding higher grades. We have a big bulk tonnage system that has first phase economics. We think we have a good shot at bringing this home. We've only drilled a couple of hundred holes so far. We have a lot of work to do and we are financed to take this a long way down the road.”
Why should investors be interested in Levon Resources? Said Tremblay, “We are well financed and have a very large resource wide open with tremendous upside potential. Management has a lot of skin in the game. The insiders are continuing to buy the stock and have not been selling. We are long term holders and will continue to build this company.” With a great deal of potential and a clear strategy to move from exploration to production, Levon Resources is positioned to move forward in the short-term.
http://www.levon.com/
Levon Resources Ltd.
Investor Relations
Luc Lesage
ir@levon.com
Suite 900, 570 Granville Street
Vancouver, BC V6C 3P1
Tel: 604.682.3701
Fax: 604.682.3600