The Junior Report will be featuring a company that has the potential to be sitting on multiple dinosaur-sized deposits in Albania.
This report is based on a theme I have written about numerous times: Big projects projects with a smaller CAPEX. It is anticipated that Tirex will have near term cash flow from their Mirdita Project by Q1 2012. Tirex potentially stands to make $20 million dollars a year from this project and after 24 months, it could grow to a whopping 80 million a year for the next 10 years. You get all this from a company that has a market cap of less than $70 million. Tirex will start off targeting production at a rate of 500tpd, ramping up to 1000tpd over 2012. At 1000tpd TXX will be potentially making a net of $15 million dollars a year income! After 24 months, production is expected to be closer to 2000tpd, meaning Tirex has the potential to make $30 million per year… all this from a company that has a market cap of less than $70 million!
Tirex does not just have one historical deposit- they have a district full of them.
Now some of you are saying that 30 million a year is peanuts, but for a junior exploration company like Tirex, this is a gravy train that will allow them to explore the over 500 square kilometres they control. The big upside potential for shareholders is via exploration and now, Tirex has a means to test the exploration potential with the cash flow from production.
Historically Albania was cut-off from the mining via the closed doors of an isolationist communist regime. However since 1994, Albania has been a stable parliamentary democracy and has opened up to exploration and finally it is being systematically explored using modern exploration and mining techniques. With such a large land package in an historic copper mining district, I see Tirex potentially outlining a few large-scale projects with their revenue generation model without diluting current shareholders.
The Mirdita Project
The Mirdita Project is not NI-43-101 compliant; the company is planning on fast tracking production without wasting the money and further dilution to complete resource and feasibility studies. Once production begins, the company will conduct a huge drilling program, in targeting areas that have blue sky potential.
Tirex has a mining partner who happen to be the largest copper miner in the country and they have a brand new mill waiting for ore. Things could not look any better for Tirex right now.
- Large Land Position 553km2
- VMS styled deposits; VMS deposits are some of the most successful mining projects in the world
- Located only 70km from the capital city of Albania
- Connected by road, power and water supply
- Mining partnership with the largest copper miner in Albania
Albania is a tiny country located in Europe. Albania is a poor country that relies on agriculture for revenue. The country has had its fair share of unstable regime but since the mid 1990s, Albania has become a very stable and safe place to invest. A number of Canadian Oil exploration companies are setting up shop in Albania; notable companies include Bankers Petroleum and Petromanas Energy.
Key Points on why Albania is the place to invest
- Isolated for years; Mineral reserves haven’t been dug out
- Tirex has first mover advantage
- Several strong electromagnetic responses over the country during geophysical survey carried out by Tirex
- Government wants to streamline projects
- Very Very Very low corporate tax (10%)
The government in Albania wants to start with a fresh slate and get revenue coming in. They realize that natural resources is the only way to bring in real wealth. They have had success on the oil and gas side with first movers Banker’s Petroleum. Now they will look to continue that on the minerals side of things with Tirex. With low corporate tax rates the country has put itself in line to stimulate foreign investment and economic growth
Top Notch Management
The boys at Tirex truly know what they are doing; the board of directors is an experienced bunch, management is filled with venture capitalists, mine operators, geologists. Fred Sveinson is a director and he has more than 40 years of experience running mines. The CEO Bryan Slusarchuk is the founder of Skanderbeg Capital. The Chairman, Tookie Angus only knows how to associate himself with success stories (Bema Gold- Kinross buyout, Ventana Gold- AUX buyout, Plutonic Power- AXY buyout, Wildcat Silver, Nevsun Resources, First Quantum founding director.)
Mining Partnership Details
The mining partnership with Ekin Maden provides Tirex near term production with no capex requirements. The interests are 50/50 net of ore value after mining production and sales costs. Initial production consists of copper and gold and silver; a study on accessing zinc from the property is pending. Note that the mining partnership is subject to the approval of mining permits which have been applied for.
Why I love Tirex
Firstly and most importantly, this project has near term cash flow potential. Secondly, they control a whole district that has shown the potential to contain many VMS deposits.
Key Points On why I Like Tirex
- Near term production without any dilution
- Partnership, where Tirex pays zero up front capital costs
- Mill ready with excess capacity for ore
- First mover status
- Sizeable investment from powerful European Bank For Reconstruction
- Albania is the future of mining