December 8, 2015 –
It is my pleasure to address you at the end of this year to provide an update on Duran and our objectives going forward. It has been a very difficult year for the junior mining industry, but a very active one for our Company. As you know, traditional access to equity capital markets for risk capital has all but disappeared. As a junior mining company, we depend on the equity markets to acquire, explore, assess and develop the Company’s portfolio of Peruvian mineral projects.
Fortunately, we had the benefit of the sale of El Aguila in May, 2014. This allowed us to rethink our strategy and focus on preserving cash. In this new market environment, the Company has had to reinvent itself, with the objective of creating a sustainable business model that would retain the strengths of our Company and allow Duran to grow value for shareholders.
After a careful review of a number of alternatives, the company set forth the following objectives for this year and going forward:
- Focus on building a mineral processing facility in northern Peru to accommodate the need of smaller independent Peruvian miners (who do not have the capital to build a process plant) to treat their ores. With due consideration of key factors such as the availability and cost of mineral supply, competitive landscape, and capital costs, we made the decision to construct the Aguila Norte flotation plant in Northern Peru for the processing of sulphide minerals.
- The Company commenced the construction in November 2015 of a processing plant with capacity of 100 tonnes per day (tpd). Once all permits are approved, applications will be submitted to accommodate expansion to 350 tpd.
- At an expected investment of US$1.5MM, we expect plant commissioning by March 2016, ramping up to full operation in the 2nd quarter of the year. We are in advanced stages in our sourcing of material for this exciting project.
- The Aguila Norte location has advantages of available water, proximity to power lines, tailings expandability and nearby highway access and skilled labor.
- Given our extensive geologic background and experience, early in 2015 we acquired several concessions in the historic Huachocolpa mining district located in Huancavelica in south central Peru. Our geologists have identified several precious/base metal rich veins with the potential of being mined at a small scale. We plan on locating and reviewing historic production records early in the upcoming year. There are a number of strategic alternatives we are also considering with these properties.
- The Company has continued to review and market our extensive portfolio of projects. Several of the Company’s projects exhibit the potential to host large, lower grade precious and base metal resources. But given the current market environment, we believe the best use of our cash is on the previously mentioned objectives, rather than pursue further exploration on these assets. Forming strategic partnerships with local and international mining companies will best maintain shareholder value by keeping dilution at the project level. We have received significant interest on our portfolio and expect to provide news soon about strategic partnerships to advance some these projects.
2016 will continue to present many challenges for the junior mining industry. However, we feel that 2016 will be a rewarding year for Duran. While we explore the alternatives in our Huancavelica properties and advance discussions on the various projects on our portfolio, we will focus on cashflow generation from our Aguila Norte processing facility.
Duran is well poised to manage the challenges ahead. And with more than 20 years of operating experience in Peru, our Company has a distinct competitive advantage of being able to generate and/or identify and quickly assess unrecognized opportunities. We will continue to identify new value generating initiatives for our shareholders by establishing good working relationships with small miners and local communities.
I would like to express my sincere appreciation to my fellow shareholders for their support in our new direction.
President and Chief Executive Officer
Duran Ventures Inc.