Cartier Resources: PEAs are conservative, very conservative

I have an new article up at Motherlodetv.net on Cartier Resources’ (ECR.V) new PEA.

Go read the article. At Motherlodetv.net I try to be pretty objective and non-promotional. Here? Not so much.

PEAs are, by their nature, very conservative documents. No serious mining company would have a ten meter “safety margin” around the mineralization. They know their rock mechanics. They want to get the most mineralized rock they can.

Cartier declared a 300 million plus CAPEX because they built a full scale mill into their PEA. Which makes sense only if you ignore the fact that there is a huge excess milling capacity up and down the Val d’Or highway. Hello, every bit of the rock Philippe Cloutier pulls out of the Chimo Mine can be trucked to any one of half a dozen mills with capacity to burn. Real world, there is a 120 million in CAPEX which will vanish with a few haul trucks. It is certainly the right thing to do the calculation as if you needed to build your own mill, but every potential acquirer or JV partner is going to drop the mill. They will likely already own one.

And, if you are worried about trucking costs, the PEA already has built-in an ore sorter which will reduce bulk. Likely by 50% or better based on other sorting scenarios.

Here’s the highway from an Agnico Eagle presentation, who own 19.9% of Cartier (sorry about the size).

The PEA is based on the current Resource Estimate of 2.3 million ounces. As it should be. After all, this is a tabletop exercise where there is no room for extra ounces. But, as Cloutier told me in our interview, Chimo East, where they expect 31% of the gold to come from, has been “lightly drilled”. It is open at depth and along strike.

Cloutier will have drills turning in the outlying, call it 300 meters, areas. Cartier is aiming for the brass ring of the 3 million ounce deposit. Cloutier is pretty confident he’ll hit that this year.

I wrote about Cartier a little over a month ago. I was bullish then, I am more bullish now. Cloutier has the goods. The only question is how much he can get for them.

The stock is trading at $0.13. Players are playing. That price values a brown site property with a 1000 meter shaft at less than $19/oz gold. If you have a truck, back it up.

[Disclaimer: This is not investment advice. I am not an investment professional. I am down about 30% at the moment on my overall portfolio. 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 own shares in Cartier Resources which I intend to hold but which I may sell at any time.]