In a time when many companies are either suspending their operations or putting them on indefinite suspensions, Farallon continues to advance at the high-grade, low cost G-9 Mine in Guerrero State, Mexico. In January 2009, Farallon announced an operational update on the progress at the G-9 mine and all key production targets were met during the commissioning months of November and December of 2008. Since that time the G-9 Mine has continued to make significant strides to get to the full design capacity of 1,500 tpd, which is anticipated to be achieved during the month of March 2009. Once at full design capacity and operating at this level on a sustained basis, the G-9 Mine is projected to be in the lowest quartile of zinc producers globally.
On the legal side during the month of February 2009, Farallon made announcements which brought to a final conclusion all the claims by David Hermiston on the Campo Morado property. Essentially, all appeals by Hermiston have been rejected by Mexican courts and, significantly, costs were awarded to Farallon. Therefore, after a very lengthy legal process, Farallon has come through and management has once again delivered.
Also in February 2009, Farallon announced the first vessel shipment of zinc, copper, and lead concentrates that sailed from the port of Manzanillo to various Asian smelters. Farallon had been trucking concentrates from the mine to the port since October 2008, however this is the first time that G-9 concentrates have been shipped by a vessel. Therefore, this is the beginning of revenue generation for the company.
The G-9 Mine has significant potential both in terms of near-term operational profitability even at low metal prices and also in terms of the growth potential of the mine. When the G-9 mine is at full design capacity Farallon anticipates producing positive cash flows even in this low metal price environment. When there is an inevitable turnaround in base metal prices, the G-9 Mine should be in an excellent position to fully benefit from any upside in metal prices as any increase in prices should flow directly to the bottom line. Also, Farallon should be poised to ramp-up the production levels to exceed the current target of 1,500 tpd to take advantage of any turnaround in prices.
In the current global credit crisis that we are all involved in at this time, it is absolutely critical to have an asset that can perform when metal prices are low and equity/debt are hard to come by, and the G-9 Mine is one of those assets. This is a historic moment in the company’s history and the G-9 Mine should now be able to form the basis for further corporate growth as Farallon targets becoming a mid-tier mining company. From a shareholder perspective, it is necessary to select companies that have excellent prospects both in the near-term and in the long-term and Farallon fits that profile very well when one is selecting performing mining companies based on excellent fundamentals in a very volatile market.
Mine in 09, a slogan the company proudly spoke of the last few years has become a reality. Reality usually ends up fantasy in the mining and exploration business. Thankfully, Farallon has proven to be the exception to the rule.
as always the question that remains is financing.They are up and running but will they be able to take care of their debt.The way I understand it,they were allowed to push back repayment for 6 months once and it cost them another 5M+ shares.What happens in another 6 months?
Every time i come here I am not dissapointed, nice post