Latin Exploration 2010, the second International Conference on Exploration in Latin America, continues today at Panamericano Hotel in Buenos Aires, Argentina. An analysis and discussion of the New Law to Protect Glaciers is programmed for the closing panel this afternoon.

Yesterday’s and today’s lectures dealt with interesting topics which arose much debate and analysis. In his lecture entitled “Ensuring Technical Competencies for Exploration Finance” Edmundo Tulcanaza, President of the Chilean Commission for Qualification of Competence in Mining Resources and Reserves, stated that, “the last economic crises have led to improve information standards and to look for a much greater transparency in the description of assets and financial services. The mining industry has also been affected by this situation. Countries with vigorous exploration development such as Australia, Canada, and South Africa have set their technical standards to inform and report exploration surveys, mineral resources and reserves.”

Hence, Tulcanaza wonders, “What’s the reason for these standards and practices? They have been established due to the uncertainties influencing mining assets, the negligence frequently occurring in this business, and frauds arising in the mining industry from time to time. In the Reports, the Mineral Resources and Reserves must be informed very clearly in order to show whether or not the Mineral Resources are included in the Mineral Reserves, in the Inventories, or in the Mining Assets. In other words, each category must be totally and absolutely clear. Great differences between Resource tonnages and Mineral Reserves may indicate that not all the Resources satisfy the resource requirements that reasonably ensure an economic mining.”

He also pointed out that, “resources and reserves valuation is closely connected with the geological, technical and economic risks. One of the key activities when defining resources and reserves is the estimate and categorization of these mining assets. Therefore, a greater severity is required when handling information for financing. Countries have been working in this direction to valuate mining assets. Only 1% of the perspectives end up materializing and, for that reason, new international standards are established to inform about corporate finances in particular. ”

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Tulcanaza highlighted that uncertainty is different from ignorance, therefore different from negligence, and this is oriented to protect the venture capital and for that these certifications are required.

Financing

Florencia Heredia, Principal of HOLT | Heredia, Oneto Gaona, Lede Pizzurno + Terrel Law Firm, focused her lecture on Financing. She commented that, “The aspects to have into account are based on a careful combination of financial engineering tailored for the project and a special emphasis must be placed on the project’s “cash flow” as the main source of repayment. The project’s assets, rights, etc. constitute the main guarantee for financing. Then, the “Step in” or creditor’s right to place himself in the position of the owner of the project. And an essential element is the quality and quantity of the guarantees of the project.”

Also, Heredia pointed out that, “there exit three stages or steps to have into consideration: risk identification and analysis, risk allocation between the parties, and risk management. But, for that, special attention must be placed in the event that the project cannot start in time and on budget; that the project doesn’t operate in its full capacity; that the project cannot generate enough resources to repay the debt; or that the project closes before the expected time.”

The value of a mining project

The conference program continued with Wardrop’s Senior consultant, Callum Grant, who answered the question, “Are you aware of the value of your project?” To answer it, he draw an analogy of a real property and reached the conclusion that in the same location it should have the same price. But, the problem arises in the definition of “comparable”: each exploration project is different and unique. In general, the average value rises due to a widespread price rise, or vice versa. Many times, there is a wide range of prices within the same geographic/geological region, and so the differences and the difficulty to draw a comparison arise.

Grant insisted that, “to calculate a value based on the terms of the option to purchase is generally possible only during initial exploration stages, then the value goes up or down according to the advances in exploration. Here, we have to differentiate between technical and financial targets.”

How did the convention continue?

The convention continued with a detailed analysis of lithium brines by Olga Mónica Herrero, Research & Development Manager, Alex Stewart Argentina. After that, Christian Maudet, Account Manager, Energold, talked about “Experience as an exploration supplier and challenges of multinational presence.” Then, Leduar Ramayo Cortés, Business Development Senior Geoscientist, Quantec Geoscience, focused his lecture on “TITAN 24 Applied to Deep Imaging Geophysics, a Porphyry Copper Experience.”

Later, the conference focused on the panel on Strategies and Exploration in Latin America II Exploration in Countries learning to become miners: A long way to go. Colombia, Uruguay, and Paraguay. The panel was opened with consultant Álvaro Ponce’s lecture on the Mining Scene in Colombia. After that, on the panel Strategies and Exploration in Latin America III Exploration in Mining Countries: Lessons to Learn from Chile, Peru, Mexico, and Brazil, Eduardo Lanao, Legal Affairs and Tenements Chief, Compañía Minera Milpo, talked about Peru and Support of Investment through the Generation of Policy and Legislation. There follow Héctor Alfonso Alba Infante, Subdirector of Digital Geosciences at Mining Geological Service of Mexico, who talked about Mining Exploration in Mexico and, lastly, Reinaldo Brito, Head of the Department of Mineral Resources at Geological Survey of Brazil, who focused on Government Policies To Sustain Mineral Exploration and the Metalogenetic Potential of Brazil.

The conferences will continue this afternoon focusing on Strategies and Exploration in Latin America IV: Exploration and Challenges in Argentina. Ricardo Martínez, Manager of Argentina Minera SA., will offered a lecture on Exploration in Argentina; Jorge Valdano, Vice-president of FOMICRUZ SE, will share his experience in exploration in state owned mining companies; and Eduardo Zappettini, Director of Geological Mining Resources at the Argentinean Mining Geological Service, will talk about Tecto-magmatic Evolution and mineral resources in Argentina.

To end the convention and close Latin Exploration 2010, an analysis and discussion of the new Law to Protect Glaciers is programmed.

About Argentina Mining

Argentina Mining is an Events and Marketing firm focused on the Argentinean mining market. Its objectives are gathering the mining community in Argentina and providing a place to promote the activity in the world, developing business opportunities for its members. The company organizes the premium international event of the Argentinean mining sector, the Argentina Mining Convention, which takes place biennially in Argentina since 1996, and the Latin Exploration Conference, among others. Additionally, it provides advisory services in public relations and marketing and develops supplementary products. For further information, please visit www.argentinamining.com