Please consider this post strictly as it is: a question open for debate!

The immediate benefits offered by the JV’d Francisco II to both stakeholders are clear and the related question whether one party will benefit more than the other is interesting but not entirely relevant…

LCC and CCD are bound to further cooperate in line with the elements known and communicated by both companies: Cascadero recognized that “The  belief  is  that  Taca  Taca  porphyry related  mineralization  crosses  the  common  boundaries”, the elements published by Lumina are in accordance with this statement and the current drilling program on Francisco II is dedicated to further evaluate its extension.

The other aspect of the debate is related to the other Cascadero’s statement: “In addition, the historic evidence supports the belief that stand-alone porphyry, epithermal and IOCG mineralization are present on the Salta properties”. There are indeed geological clues and elements – including the “leach zone” principles clearly evidenced by Midas (I admit, I missed this one) – incorporated in Lumina’s released documentation supporting that statement… But few drills will not necessarily prove this… And, even if they do, the logical conclusion is that more drillings will be needed….

For the avoidance of doubt, those geological clues and elements are not contested. At this stage, I just do not know if Lumina’s immediate economical interest is to shed light on this reality…

But let’s take for granted that there is a motivation to discover the “motherlode” on the northwest. In this case, further drilling campaigns will be required…

Then there is an obvious (unanswered) question…

To proof the resources of its claim, to “dress Taca Taca window” (and to reach a market cap of +/- $400 Mio), Lumina spend about $65 Mio since 2010… (historic drilling are not included in this amount).

Let’s assume, for instance, that the same amount would be required for a drilling campaign on Francisco I and Francisco II.

Even for Lumina, this additional $32 Mio drilling campaign / investment is a substantial amount. For Cascadero this will represent… the current market capitalization (total shares issued)…

Note that Francisco I – II have been taken as reference for the purpose of illustration, since only 25% has to be financed by Cascadero. For La Sarita I - II (“virtually unexplored and have potential to host IOCG and hybrid porphyry style copper-gold mineralization”) or even Sarita Este, this percentage increases to 50%.

Cascadero has currently +/- $2 Mio in cash (raised during Q3-2012) and even if all options and warrants are to be exercised (corresponding to +/- 65 Mio shares at an average of 0.12 / share), this will only bring $ 8 Mio cash…

Therefore, under the hypothesis that Cascadero wants to participate to forthcoming drilling campaigns, different options (having the same effect) are available: dilution, further JV (not necessarily with LCC), partial asset selling (but what price since nothing is proven?), partial asset disposal against financing and drilling requirements (not always successfully – see for instance, Marble Mountain or Toodoggone),…

How Cascadero intends to finance those drilling campaigns in Taca Taca?

I presume Cascadero will JV their claims, requesting their new partner to finance those drillings and will transfer a substantial part of the property when financial thresholds are reached.

… and I do not exclude that such a strategy has already been discussed /  concluded with Lumina…