I just spoke to Dr. Hennigh about Eloro Resources (TSX-V: ELO) – a $350M CAD tin-silver exploration story out of Bolivia.
It was just quick call to run over some of the numbers on what the metal in the ground might be worth. Parts of that conversation will be used for the weekly video newsletter “Resource Heads”, which is published every Sunday on this website.
What we know so far is that Eloro’s asset is:
1,800m x 600m x 600m = 720,000,000 m3
Density of the rock over there is about 2.8 (2.75/m3)
720M x 2.75 ≈ 2B tonnes of rock (1.98B tonnes)
Looking at what we know so far, from all the holes that are reported, about 50% is mineralised.
Discounting that 2B tonnes rock by 50% leaves us with 1B tonnes of rock under Eloro’s feet right now.
Remember, this is what we know so far. The thing, as cliche as it may sound, is open in all directions, and even in depth (I believe).
The value of the rock, based on what we know so far, is about $100-120/tonne.
Being conservative, and discounting that by 20%, leaves me with ≈ $96/tonne.
1B tonnes of rock x $96 = $96,000,000,000 (96B) in-situ value of the metal.
Again, this is mostly logical guess work. It may be logical but it’s guess work.
On top of that, the project isn’t closed in any direction, and the more they expand, the more that ≈$100B in-situ value grows.
For example, the last two drill holes they reported on, were 400 meters apart. This is rather large. Companies have made mines of less than only the distance between the two holes here.
To add to that, a lot of that metal seems to be tin.
Looking at its chart, tin doesn’t seem to know how to control itself, so it might be worth more by the time it’s time to sell Iska Iska, which of course would increase the value of the metal in the ground beyond what I wrote above. Notice the use of the words “might” & “would”. This is the unfree market of today, anything could happen.
That’s the summary of what we talked about.
I also asked Dr. Hennigh why Eloro’s not answering emails quick enough, and he said they don’t have an internal IR guy but they probably should. It might be overload, but there might also be a problem because when QH gets an email from the company, it lands in his spam box. I hope there’s that much interest in the company, that they just can’t keep up, but looking at the volume, I don’t think that’s it. Truth is, though, if you’ve heard Dr. Pearson (Bill) speak about Iska Iska, then you know he’s not one to shy away from answering technical questions. If I could have my guess, he’d prefer doing that all day than most of the other work. So, my guess is they’re not really avoiding anything, but I’ll ask about that next time I speak to Tom.
Of course, Dr. Hennigh is with Crescat Capital, who holds buckets of Eloro. He’s biased. Eloro Resources is a paying customer of this website, so although I’m not biased as I like calling out turds when I see them, I should be considered biased because of the financial relationship between me and the company. Bottom line: I’m greedy, and Eloro pays for my lifestyle. I’m 26, live with mom & pop, and have no idea what I’m doing so discount anything you read/hear from me by at least 99%.
P.S: I just realised we might’ve been calling it wrong this whole time. I hear a lot of “Eloro” as oppose to “El-pause-oro”. Since “El oro” means “gold” in Spanish, according to Google Translate. I had no idea. I’ll ask Tom next time.
Alright, going back to the basement.