Friday, May 20, 2011

Yellowhead Mining sure is showing a lot of potential

Yellowhead Mining is a Canadian company with a 100% interest (*) in the Harper Creek copper-gold-silver development project in south-central British Columbia, approximately 150 kilometres by highway north of Kamloops. Harper Creek offers exceptional potential as one of the largest copper development projects in Canada.

  • NI 43-101 Preliminary Economic Assessment completed March 2011
  • Detailed Feasibility Study to commence April 2011
  • Measured and Indicated resource of 532 million tonnes grading 0.31% copper, .032g/t gold and 1.08 g/t silver, plus an Inferred resource of 117.2 million tonnes grading 0.29% copper, .032 g/t gold and 1.32 g/t silver, containing 3.6 billion pounds and 0.7 billion pounds of copper respectively, at a 0.2% copper cut-off (**).
  • Estimated total production: 2.857 billion pounds copper, 256,000 oz. gold and 4.876 million oz. silver in concentrate
  • Mine life 22 years at a milling rate of 70,000 tonnes/day
  • Stripping ratio 0.88:1 life-of-mine
  • Projected capital cost of CDN$759 million in Q4-2010 dollars, including contingency
  • Site operating costs are estimated at C$1.40/lb before precious metal credits. The breakeven copper price including capital repayment (IRR=0%) is determined to be US$1.94/lb using US$1,058 for gold and US$16.57 for silver
  • Harper Creek is located adjacent to rail, highway, power, water and town-sites, resulting in capital and operating cost advantages.
  • Test work indicates that the concentrate is clean with no smelter penalties expected
  • Senior management has extensive international experience with large scale open pit copper projects
  • Drilling data over 60,680 metres, including 29,701 metres by Noranda and US Steel in the 1960's and 1970's and a junior exploration company in 1996, 26,854 metres by Yellowhead in 2006 - 2008 and 5,173 metres in 10 holes in late 2010 through March 2011.
  • Excellent potential to significantly expand the resource: numerous exploration targets outside the resource envelope have been identified through airborne and ground geophysics and soil geochemistry.
Yellowhead is well-financed, with a cash position of $4.5 million (March 2011) and an announced bought deal financing of $20 million expected to close by April 5, 2011.

(*) 775 ha subject to a 3% royalty capped at $2.5 million, adjusted for inflation and 618 ha subject to a 2.5% NSR royalty, which includes an estimated 3.3 million tonnes of resource expected to be mined starting in year 9 of the current mine production schedule.
(**) For further information regarding the Harper Creek Project and resources, reference should be made to the March 08, 2011 news release entitled "Yellowhead Mining Reports Positive Results of Preliminary Economic Assessment"

The following is a link for the news release announcing the closing of the bought deal private financing.

At the close of trading on May 20, 2011 the price of YMI was $1.14. At this level it would seem this could be a good entry point. This is in my opinion a good company to add to your watchlist, and I see the potential for YMI, to increase their market cap, to be well within realistic expectations. This is a company, that for those who are interested in a copper play, I think is worthy of a serious amount of due diligence. I urge everyone to do their due diligence on YMI if you are thinking of investing in the company. A good place to start would be the companies web site at 

For disclosure purposes I have not received any compensation of any kind for this post. I do not own any shares of Yellowhead Mining.
For disclosure purposes I have received no compensation of any kind for this post. I do not own any shares in YMI.

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