Cascadero Copper {TSX.V: CCD} have released a property synopsis, prepared by CEO Bill McWilliam.
Cascadero feel, like many other junior explorers, they are not receiving a proper valuation from the marketplace.
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Cascadero Copper {TSX.V: CCD} have released a property synopsis, prepared by CEO Bill McWilliam.
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Cascadero feel, like many other junior explorers, they are not receiving a proper valuation from the marketplace.
A brief introduction to the synopsis is pasted below, which is refreshingly honest, and I have a complete document that I can send out to anyone interested, please email andrew@city-investors-circle.com
EXECUTIVE SUMMARY by Bill McWilliam CEO and Chairman.
Cascadero began operations in Salta province in 2004. The business plan stressed the importance of acquiring properties that had potential scale. We focused on large alteration systems indicating the presence of sub-surface fluids that altered the surface rocks and on outcrops of all types, preferably with some sign of mineralisation, for assay. The Company acquired a geochemical data base in partnership with a geologist, who was also a prospector, and two prospectors who had substantial experience in the Puna region of north western Argentina. The principal role of the prospectors is to find mineralisation. We did not focus on copper or gold or silver as the mantra was “let the assays tell us what the rocks are.” We also used a 60-element ICP assay, which decision turned out to be a great idea. The principal role of a geologist is to recognise the existence of phenomena before trying to explain them. (B.M. Keilau 1825). There was also an urgency to sample rocks over as much of the Puna as possible. The traditional definition of this is “boot and hammer prospecting” in the Greenfield as we believed the metal markets had bottomed out and would likely rise in price and create competition for good grass roots properties. We entered Argentina after a four year period of depression and currency confusion. Perfect timing?
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The Argentine Puna is about 300 kms north south and 200 kms east west and is classic basin and range terrain, with strong north south structural control and east west continental-scale transverse structures. In Chile this geologic setting controls many of the largest copper deposits in the world. In addition to these excellent structural conditions, the eastern margin of the Puna is a tectonic plate collision zone, which created suture zones and faults that provided conduits for mineralisation to reach surface. This said, the best part was that the Puna was lightly prospected almost like a first pass short term curiosity program. The Puna did not receive much modern geological concepts and serious prospecting was virtually non-existent. Cascadero acquired Argentine properties from 2004 to 2011. The Company reviewed more than 110 showings and by 2011 the Cascadero subsidiary acquired 61 tenements amounting to 169,173 hectares. The properties were in three Argentine provinces: primarily in Salta, with lesser interests in Catamarca and Jujuy. Six years later the 2017 portfolio consists of 25 tenements covering 40,880 hectares and it represents a rendering of the 2011 portfolio. The Core Projects are in Salta province and are grouped in three areas: Taca Taca, Santa Rosa, and Taron. For the most part the Company held a 100% interest in the tenements. No tenement is currently subject to an underlying agreement.
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The principal objective of exploration geology is to provide a drill target as soon as possible. When starting to fulfill this objective we fully learned that doing this it is very uncertain that you can arrive at a drill target. In addition, if a drill target is determined and drilled, the assays will determine the next step. Exploration geology is a binary business: the drill hole assays range between zero and one. The program conundrum is if the assay is in mid-range what to do. The next step is critical. Drill holes are the only way to create value for shareholders but they are expensive and the geologist has to make tough decisions based on assay and budget constraints.
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One of the objectives for me now is to address why the stock trades at 7 cents per share? We believe the primary answer is that the Company has not over 10 years of operations developed a property to achieve a valuation metric. This is a bit of a hangover from the property generator business model where we drilled holes to determine if the surface mineralisation or alteration assemblage was forecasting sub-surface mineralisation. The much heralded property generator model is not that friendly when you get low on cash as the model turns into a real estate portfolio and the company is rapidly consumed by paying taxes on the whole portfolio.
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It is difficult to provide a concise summary of the 13 years of work but we have seven prospects lined up to drill in 2018 or ASAP. We have had several exploration successes and we have several properties we will get to the drill stage.
In effect, the generator model provided valuable data on several properties instead of focusing on one or two mineral systems. The Company’s geochemical database is now very valuable as a guide to prospective properties. From a risk point of view we made the correct decision for future value but the lack of a valuation metric has created a range bound stock price. In addition, and this was a management preference as our ideas were always a little bit ahead of the Company’s capitalisation. This created a chronic working capital deficit that we are in the process of fixing and we have the properties to do that. In effect the working capital problem was an investment in the Company’s future.