The following summarizes significant progress made in Permitting and Approval on the Fuwan Silver Deposit: Ltd ("NERIN") and will be released after the requirements from the approved EIA report are met. The preliminary mine design was completed in 2013 by China Nerin Engineering Co. The delay in approval of the EIA report for the Fuwan Silver Project is due to the negative impact caused by the collapse of the tailing dam of an operating mine in Guangdong Province four years ago. Regarding EIA approval management made the following remarks in its Q1 MD&A: Investors who are concerned about permitting and the fact that citizens were largely against the project should note the progress that has been made on these fronts. Even if it takes another couple of years keep in mind that the market is pricing in no value for the Fuwan Project. The company's application for EIA approval hasn't been outright rejected, and it appears that the company is nearing approval. As a result the NPV of the project is multiples of the current market capitalization even if we discount the cash-flow out 3-5 years.įourth, while permitting has been a slow process it has been progressing over the past several years. Even if we assume a 20% decline in metal prices the company's operating cash-flow will exceed $50 million per year for 9 years (and easily longer). This brings me to my third reason, which is that cash-flow is going to be immense for the project considering Minco Silver's current market capitalization. Once management is able to obtain the final permits and EIA approval it should have no trouble raising the remaining $32-million or so considering that the company's annual cash-flow will easily exceed this amount. With inflation factored in I estimate that initial capex, including G&A not included in the feasibility study, s roughly $92 million vs. Second, the company has nearly all of the capital it needs in order to construct the mine on hand. While costs have risen due to inflation the price of silver-which sits at $21/ounce now-has risen substantially more. But I believe that the Fuwan Project is well worth the wait, and I cite the following reasons.įirst, when the company first researched the mine's economic feasibility it did so assuming that the silver price is in the $13-$14/ounce range, as that was the three-year trailing price at the time the 2009 feasibility study was carried out. Regardless of what happens with respect to the EIA approval production is still years away as development will take nearly three years. The current valuation reflects the belief that the company will continue to drain capital attempting to get the project approved while effectively getting nowhere.ĭespite this there is no reason to believe that the Fuwan Project will not be built-the risk is one of how long investors will have to wait. Furthermore locals living in the villages nearby were generally opposed to the project when they were surveyed back in 2008. Minco released its feasibility study nearly 5 years ago back in October, 2009, and yet the company has still not received its permits and it has not yet had its EIA approved. The reason for this is that investors are concerned that the Fuwan project will not be built. Not only is the Fuwan project worth substantially more than this, but the company has about $60 million worth of cash, equivalents and receivables on its balance sheet vs virtually no liabilities. The company is incredibly undervalued with a $54 million market cap. Ltd.Minco Silver ( OTCQX:MISVF) is a pre-development stage silver miner with a high grade underground silver mine in southeastern China called Fuwan. Its subsidiaries include Minco Investment Holding HK Ltd., Minco Resource Limited, Guangdong Changfu Mining Co. The first, the Luoke-Jilinggang, is approximately 57.16 km2 in size and is held by Foshan Minco, while the other two permits, the Guyegang permit totaling 55.88 km2 and the Hecun permit totaling 12.7 km2, are held by Minco China in trust for Foshan Minco. The Company holds three exploration permits, totaling 125.74 square kilometers (km2). The Fuwan Silver Project is situated approximately 45 kilometers southwest of Guangzhou City, the capital of Guangdong Province.
The Company's mineral properties include Fuwan Project.
The Company is engaged in exploring, evaluating and developing precious metals mineral properties and projects. Minco Silver Corporation is a Canada-based silver mining company.
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