Big. Eloro is really, really Big

A month ago I wrote about Eloro’ (ELO.V) Iska Iska silver tin project in Bolivia. Bob Moriarty at 321Gold.com was kind enough to link the piece and I had insane traffic for a couple of days. Now Bob has written about Iska Iska.

That’s where it really gets interesting. We are not going to know just how big Iska Iska is as a mine for probably fifty years or more. So far the ELO technical team have drilled 84,495 meters in 122 holes. In a press release from last year, Dr. Bill Pearson showed the potential for a strike length of 2,000 meters with a width of 1,000 meters and a depth of at least 800 meters. If you throw those numbers in your Bomar Brain and use a typical specific gravity of 2.65 tonnes per cubic meter you get 1.6 billion cubic meters with 4.24 billion tonnes of rock. It’s not going to all be mineralized but saying a potential of 1.5 billion tonnes of ore is possible. (go read the whole thing at 321Gold.com

As Bob rightly points out, one problem Eloro has is that it is so big that most investors have no frame of reference to really understand the significance of the drill holes it is reporting.

Bob thinks a 43-101 Resource Estimate, expected soonish, will help with that. I am not so sure. Once again, the problem is scale.

If you pointed a gun at my head, I would guess it would be in the 400 million to 700 million tonnes of $100 to $125 CAD a tonne rocks at today’s prices. That’s ten to fifteen years production of rock worth maybe $115 a tonne or production of about $5 billion a year in total revenue. (321Gold.com)

At the moment, ELO has a market cap of 240 million. OK, if the 43-101 is anything like Bob’s estimate - and I think he’s low - and you assume a CAPEX of 2 billion and a 50% OPEX, what’s the expected market cap?

2X net earnings (2.5 billion/a) would be 5 billion dollars, 20 times the current market cap. In very round numbers, 20 times the current share price of a bit over $3.00, would be $60 a share. Which would make a lot of people very happy and some people very, very rich.

According to ELO’s February 2023 presentation the 43-101 Resource Estimate is supposed to be finished by the end of March. That should perk the market up.

I bought another, sadly small, number of shares tonight. As regular readers know, when I buy a company, the shares almost always dip just so I will feel dumb. But ELO is shaping up to be a sure thing. If Moriarty’s numbers are even close, the 43-101 will reveal a world class asset.

[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment. I will write about companies that I hold. I will disclose any holdings. Do your own due diligence. Do it hard. Call the CEO.

I currently hold shares in ELO.V and while I have no plans to sell anytime soon I reserve the right to take profits as they arise.]