In line with the PEA Report now published on Sedar (and probably Monday on Lumina’ site), the situation for Francisco I and II is as follows:

  • Part of Lumina’s Interfered Resources are located on Francisco II. This is not new but worth to be repeated. An estimation has been previoulsy made (see “Francisco II Deposit” Valuation Attempt for CCD 25% ownership) that I should revise down with 30% due to unfavorable market conditions to a range of 4.5 to 7 Mio USD;
  • A portion of Francisco II is included in Lumina’s Open Pit. Nothing new but worth to mention again;
  • A large part of Lumina’s Infrastrucure is located on Franciso I and Francisco II (mainly Tailings Storage Facilities and Oxyde stockpiles). This clearly confirms previous statements and the importance of those two claims for Lumina. The picture below, completing Lumina’s PEA Report (Figure 18-10 – Page 161), shows the simplified boundaries of both claims.

What will be SESA (CCD + AFRI) request to allow Lumina to use its 50% (25% + 25%) claim rights?  There is currently no answer to this question but cumulatively (deposit + open pit partially located on Francisco II + Infrastructure) all those elements, reported to CCD ownership (25%), exceed the its current market capitalization!

A bright future? Not really!

The last MD&A published on SEDAR (dated 29 April 2013 - QUARTER ENDED FEBRUARY 28, 2013) raises substantial question marks on the future of the company itself…

  • The JV agreement with OZ Minerals (Centenarito Project) has been terminated (Page 9) – but nothing has been press released;
  • The investments in Argentina are on standstill – “Cascadero has advised Salta that due to weak capital markets the funding for the Argentine program would be decreased and employee layoffs are necessary. These austerity measures are underway. The Company intends to maintain the property portfolio” (Page 9). CCD Management avoids to mention this fact on its “March 2013 Exploration Update”!
  • Cash is barely 500,000 USD at the end of the period;
  • The company further “transferred” an additional 500,000 USD (Page 10) to related companies (Argentine Frontier Resources Inc., and SESA Holdings LLC) for a cumulated total of 3.2 Mio USD. This approximately corresponds to CCD current market capitalization! I express some doubts that AFRI has the financial capacities to reimburse those advances (the exact quantum is not provided). However, any amount could be offset / balanced against an increased participation in SESA (currently 50% - the remaining 50% is seemingly still owned by AFRI). Alternatively, there is also the possibility for AFRI to reimburse CCD after a potential deal with Lumina…
  • Due to the current market capitalization, any request for additional funds will represent a substantial dilution…

However, the above unfortunate situation should be partially tempered by the potential agreement with Lumina that should offer Cascadero financial resources to further survive / develop its portfolio…