$4.7-mn Cash net of Debt



Worthy of a separate post.
Backs up Salazar’s stratagem of funding exploration and development from operational cashflow.
See last post from Gretel.

No fear of dilution then.


Again spot on, thank you. But your conclusion earlier yesterday is ‘build/retain’ a holding’. Is this based on POG staying around 1250, or rising? I.e. At current POG can Orosur fund its development and will it make money, and what is your view if POG falls back a bit/ oil price and costs rise? Thanks


Thanks Mr. B and good questions.

Just to re-iterate the obvious basics:
Orosur is essentially a high risk, geared play upon the POG; always has been.
It is also a momentum stock; one for which price up-surges from beaten down levels almost invariably follow on from those in the big, liquid PM miners.
Conversely, expect mass desertions when the going gets tough; the long term case curries little favour with momentum investors. Traders more than investors really.

If I knew that Gold is going to descend into another bear phase, I’d sell all my OMI shares.
Might miss out on a ‘White Knight’ buyout but that’s quite some gamble.
Otherwise, it’s a sure bet the sp would fall towards previous lows and if the POG were to go decidedly sub $1,050/oz, even lower.

If I knew this Bull run is going to re-ignite, which pretty much requires the $1,400/oz level to be taken out, then I’d buy a big stash; could be even 10%+ of my portfolio.
I’d be posting here with Cawkwell like gusto.
Being pretty conservative, I doubt I’d go overboard on any single AIM PM miner; the stock specific risk is simply too great.
Having said…Orosur/Salazar/Uruguay…looks a dependable outfit, genuinely run with shareholder interest well to the fore, in a stable and reasonably ‘friendly’ country.

Right now, we are at a pivotal point as to whether the Gold bull run continues or nay.
Each to their own as to the limits for this.
There’s a fair few analysts etc that say the springtime lows of ~$1200/oz are their bottom drawer support level. These often seem to say that the POG is very Fed driven and are looking for a scenario of 1/4pt rise in Dec. followed by a prognosis of, at most, 2 more in 2017, then done as a new global recessionary cycle takes hold.
Others say that if the $1,250/oz support caves…game over.

My take is that because Salazar has Orosur set up as best it can to weather low gold prices, it’s worth holding a core, at very least while the $1200/oz level holds, if it comes to that.
Buying at that level is basically a punt that it is indeed a bottom and at very least the $1300+ prices of late are revisited.
If that’s as good as it gets, OMI becomes a trading game imho.
There will be good gains to profit from on up momentum and rapid, deep plunges on either disappointing results or if the POG prognosis wanes yet again.

I’m hopeful that the POG will at very least consolidate sideways from here through 2017, supported by ongoing debt-deflationary pressures in developed economies, hence continued monetary largesse and low real interest rates/yields; central bank gold buying ongoing, Asian physical support still ongoing: +ve correlation with growing wealth.
I will retain a core holding accordingly and add on favourable Orosur news-anticipation, POG expectation or on sell offs when the investment case hasn’t deteriorated much, if at all.

Yes, Orosur can make money at ~$1,250/oz.
Not a lot.
Enough to keep going in Uruguay for as long as they can find more of the same; that means extending/replicating Arenal - San Gregorio.
Seems to me that $1,300/oz is the level above which this scenario becomes more rosy and secure.
If nothing goes wrong…enough cash generation to fund a bit more exploration and development: Of Anza, Anillo and Uruguayan open pits.
I don’t see substantial open pits production unless the POG goes above $1,400/oz and the average stays thereabouts for several months.

Yes, there are always other considerations, such as the strength of the $US v the Peso or as you suggest fuel prices. Clearly these will matter much more when, as now, the POG supports only a modestly profitable prognosis.
Each to their own on these.
You’ll have to judge how far and for how long changes will happen and Orosur’s ability to adapt to them.
Fwliw, I don’t think anyone can reliably forecast the exchange rate; ditto fuel costs though my expectation is that they will more likely average up from here over say the next 2 years than fall. But for me, they are marginal considerations here.

Something to consider is that globally reserves will be harder and more expensive to come by going forward. Also, not a few big miners will build a lot of cash this year.
Must be a significant prospect that Orosur elicits interest and an offer.
If not for the whole outfit, may be for the Anza prospect or even Anillo.

Do PM shares make up much of your portfolio?
What is your reason for investing in Orosur specifically and where do you see it going?