Interesting chat about PEA. The consensus seems to be it will be compelling but you have to wonder why the 'expected' great news we are due soon has barely been reflected in our share price so far. I de risked a bit post Coup attempt but am contemplating a little further investment in hope that market will wake up to our latent value soon. Am with 5P in his frustration at certain investors whose MO is so transparent. Me thinks a certain person is extracting the P - fellas..
"A well reasoned argument and I sincerly hope you are proved correct (because it would make me a rich man) but caution prevents me fom thinking of figures that you suggest. "
That's exactly as it feels for me. All this counting chickens before they're hatched makes me nervous. Maybe it's superstition - not tempting Fate - that sort of thing. One step at a time and fingers crossed all the while it's happening.
PB - I knew you were bullish, but really? A well reasoned argument and I sincerly hope you are proved correct (because it would make me a rich man) but caution prevents me fom thinking of figures that you suggest. Either way I AM sure that the PEA will justify a step up in the valuation of the company and I'm really surprised that more 'upside' hasn't been priced in already. SURELY a close at 70p+ before October, i.e. tomorrow???
IMHO you are all too reserved so far in your estimates of all-in costs per ounce. My crystal ball shows me that the PEA will show development of mining in 2 distinct phases, which is in keeping with current industry standard whereby Phase 1 provides a low capex targeting the richest grades in order to generate revenues which will then pay for further capex requirements to move to Phase 2 which is full mine development. In their tech report, RPS concluded that mining could be undertaken by both open pit and underground methods. If you look at their plans of the topography of the ultra-high grade material, it lies only 20m below surface at its shallowest, and is relatively more extensive superficially than it is at greatest explored depth. Therefore Phase 1, IMHO and my crystal ball, will be open-pit and accessing the ultra-high grades. Since there is about a Troy ounce in every ton, and since the specific gravity of the ultra-high grade is 2.9, there are about 2.9 troy ounces in every cubic metre of rock. An open pit no larger than a tennis court (if you are concerned with environmental permissions) could access a huge amount of gold and be processed by a very small start-up processing plant. Ultimately the mine will require underground mining methods, and the biggest capital expense there will be a vehicular incline......but that is not required for Phase 1, and can be paid for over time from Phase 1 revenues.
So, how much will Phase 1 all-in costs be, and what sort of revenues might we expect, to finance Phase 2? Here we benefit massively from our ultra-high grades, and the basic maths is simple: If we look for other gold producers who just manage to break even when the gold price dips to $1100/oz, then they are processing grades with just 2 or 3 grammes gold per ton. So, lets say that the first 3 grammes breaks even financially. But at Hot Maden we have, not 3 grammes/ton but more than 10 times that grade (ultra-high zone >30g/t). If it costs x$ to process one ton of rock, and our struggling producer just breaks even on 3g/t grade, then Hot Maden for the same x$ produces 10 times the gold, and nine-tenths is free and can be sold for (currently) >$1300/oz. I am therefore expecting that the best estimates so far on this thread ($500/oz) will be totally smashed when the PEA appears, and a figure of <$200/oz or even possibly <$100/oz for all-in production costs for Phase 1 will be given. Eventually, for Phase 2, the costs/oz will be about double those for Phase 1, since RPS gave the OVERALL grade of Hot Maden as 15g/t. Remarkable though it is, the ultra-high zone comprises a massive one half of the total gold! Indeed, the tonnage figures for Hot Maden are surprisingly low, a direct result of the ultra-high grades, and it is possible that the processing plant may never need to be particularly large or expensive.
Let's see whose crystal ball is nearest to predicting the actual figures! Fun fun, of the very best so
Itsyou, The prospect is more than exciting in my opinion, for instance the geology of the deposit maybe VMS, if so they are not typically found in isolation, thus could mean further deposits located over a strike of 5-7km, hence the southern discovery. Now with that in mind, if the metallurgy is favourable, we know the mine will be very economic with a quick payback, so there will not be any problem finding relevant funding if MARL do not sell. The initial outlay i.e CAPEX will be generally low compared to others, based on the economics of the mine; i.e almost at surface, ULTRA high grade, low extraction costs, local to infrastructure, mining friendly jurisdiction, partner to a top tier private Turkish mining firm... the list is endless. So with the above in mind we have a deposit that potentially will be relative easy to become a cash generator, with a continued aggressive exploration campaign continuing, further satellite deposits will be found!!! The area could turn out to be an elephant!!! £3 is just for starters!!! Regards,
Yes the numbers are going to be very exciting. Such high grades for a multi million ounce deposit indicate cash costs like never seen before. AISC and AIC will also be very low as the deposit has exceptional grades, 3m ounces and shallow. Well that's what i'm expecting. But dyor all.
The other key here for whatever NPV they ascribe as value for HM will be the short space of time it takes to extract that NPV. Plus also the payback of the capex(IRR) will also be so short that finance charges really wont kick in.
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