esperanza silver reported good drill results at its cerro jumil project. there is certainly some gold there, but not sure if its enough to be an economic deposit, at least not yet. they aren't finding gold to the north, but now they are hitting high grade silver. they hit some dry holes to the east, but it's still not clear if the mineralization is deeper, or was faulted off. if some kind of post-mineralization event occurred, the faulted off portion could have subsided (i.e. went straight down) or it could have moved laterally in some other direction, so it looks like they have some more work to do to figure out the geology.

epz would like to develop both san luis and cerro jumil, but the question is how they will finance cerro jumil. san luis won't start producing revenue until the end of 2009 at the earliest, and epz doesn't have enough cash to take cerro jumil all the way thru feasibility, let alone the $50 million, or more likely closer to $100 million it will take to put cerro jumil into production.

with epz at $1/share they would incur massive dilution with an equity financing, and debt may involve hedging. or they could sell forward some of their prduction as farallon did with silver wheaton. or they could raise cash by selling their remaining 20% of san luis to sso, and avoid all of those problems.

http://biz.yahoo.com/ccn/080528/2008...