Dundee Sustainable Technologies (C:DST) has been on the tip of the tongue of multitudes of institutions and investors. A new technology play in Canada, it has been recognized by the Sustainable Development Technologies Canada. Recently in talks with various South American countries, DST has negotiated a decree in the province of San Juan in Argentina, as well as secured two MOU’s with strategic partners located in Peru and Chile. These are by no means small steps, this could eventually lead to the only technology being used in the regions for extraction would be that of DST’s!
Are we there yet?
No.
Could we be in the future?
Yes.
Financially, DST has a working capital cash flow of negative $6.1 million, which includes the $5million short term loan from Dundee. DST does not expect to have enough cash to continue, however it is confident it can raise what is required to continue operating and expanding. So far this hasn’t been an issue, nor is it expected to be one. Several time already has Dundee excersized in position to give DST some cash flow.
With the recent selloff, there has been concern for the current share price of DST. While it is clear that someone had to get out, the why as several possibilities. Considering the time of year, we have entered what is commonly known as Tax Loss Season. As the holidays draw near, some investors justify portfolio adjustments for gifts, vacations and festivities.
One possibility, is Pinetree Capital, which recently disclosed that the company was in default by the trustee under the Indenture. Its debt-to-assets ratio on was 38.8{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce}, contrary to the 33{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} debt maintenance covenant contained in the Indenture. Considering it’s recent financial hurdle and that it is involved with Dundee and DST, it may have had to adjust it’s position.
Remember the Minto Property? Well, some testing has been done, and they were able to compare their own chlorination method (90{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} recovery) vs traditional cyanide ( 35{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} recovery). This was able to confirm the refractory nature of the Deposit. Using a modular processing plant, they plan to concentrate the deposit, and subsequently ship it to their Thetford Mines demonstration plant. The construction or acquisition is expected to be $4.5 million (which is included in the $27 million demo plant cost).
The modular processing plant is expected to go live in the summer of 2015.
The reason for the delay was because of a mechanical inspection Dundee performed on a concentrator in Mexico. Dundee has interest to acquire this as part of the demonstration plant cost.
Also within that $27 million budget for the demonstration plant, is $6.5 million for processing materials obtained by Dundee Precious Metals and / or other third parties. This will only be for a period of 6 months, after which it will process the ore of Creso.
|The demonstration plant is expected in March of 2014. The first thing to be processed? 10-20 tons of 1 pound gold/ton ore. So far they were able to get 99{92d3d6fd85a76c012ea375328005e518e768e12ace6b1722b71965c2a02ea7ce} recovery of the first kilograms of it, and will establish the feasibility of processing at their demo plant. 1 ton of this stuff is worth over $19, 000 at today’s gold prices!
This all means possible revenue as of next year.
Read more:
Dundee Sustainable Technologies – Making big moves in South America
Dundee Sustainable Technology (CSE:DST) in the News! (Global Mining)
Cyanide, Mercury and Tailing Pond Spills – Perhaps we Should Change our Extraction Methods
Management Discussion and Analysis
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