On July 2, 2008 Farallon Capital Management, L.L.C. and certain investment funds and an affiliated entity managed by Farallon Capital Management, L.L.C. announced that “they had increased their proportionate holdings in the common shares of Antares Minerals Inc. by an additional 7,510,900 common shares and 1,630,450 common share purchase warrants of Antares in a series of transactions.”
“Based on Farallon's understanding that 50,550,284 common shares of Antares were issued and outstanding immediately prior to the June 30, 2008 transactions described herein, Farallon's common shareholdings now represent approximately 39.9% of the outstanding common shares of Antares on an undiluted basis (representing an increase of approximately 5.3% from the previous report issued by Farallon on October 31, 2006) and 42.2% assuming exercise of all warrants currently held by Farallon.”
About Antares Minerals
Antares’ primary properties are the Haquira copper project in Peru optioned from Freeport McMoran, the 50:50 Rio Grande copper-gold joint venture in Argentina with Mansfield Minerals and the Cristo de Los Andes project, which is located only 10 km to the south of Haquira Project in Peru. Antares has an option agreement with Minera Phelps Dodge del Peru S.A.C. to acquire a 100% interest in the Haquira project by completing optional payments totalling US$15 million over a five-year period.
Most recently, Antares released a scoping study for the copper oxide Haquira Project that outlined an after-tax NAV8% of $225 million at a $2.00/lb cu price based on 1.6 billion pounds of the 2 billion pound copper resource. The company’s current market capitalization is 192 million. Throw in current copper prices of $4.00/lb and the stock looks very cheap here.
Other statistics from the scoping study include:
After-tax IRR of 25.9% for base case with $2.00/lb Cu
After-tax NPV of $224.4 million for base case with $2.00/lb Cu and 8% discount rate
Initial capital expenditure of $301 million (includes 25% contingency)
11 year mine life with average annual production of 109 million lbs Cu cathode/yr
Early higher grade starter pit facilitates project payback in 2.9 years
Cash operating cost averages $1.09/lb Cu over life of mine (including royalty)
Average annual revenue of $220 million - average annual after-tax profit of $46 million
Strongly leveraged to price of copper (based on $1.75-3.00/lb)
o IRR ranges from 17.9%-52.9%
o NPV (8% discount rate) ranges from $115.4 – $660.3 million
Open-pit, contract mining, SX-EW operation mining average of 50,000 tonnes ore/day
Pre-feasibility study initiated with potential for significant project optimization
Antares expects to announce a resource update that includes the sulphide part of the resource in the third quarter of 2008. Expectations point towards a doubling of the resource to 4 billion pounds.
About Farallon Capital Management
San Francisco based Farallon Capital is the world’s fifth largest hedge fund, with an estimated $30 billion in assets under management. Farallon’s investment strategies include restructurings and value, merger/arbitrage, special situations, real estate and credit instruments.
As far as I know, Farallon does not have substantial investments in any other junior Canadian resource stock. In that regard, make what you want of their investment in Antares Minerals (ANM: TSX-V). I take it as a positive sign.
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Last update : 03-07-2008 05:30
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