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@Socialist We can also add OMI to the Earn-In 70%+ going to the Major list in their JV with Newmont/Agnico in Colombia. Simply put however inequitable JV seem the Junior that owns the licence and has proven it up to the point where a Major is interested just does NOT have the means if raising the necessary CAPEX or OPEX to fund 2-3 years of work just to get to DFS and a proven resource that can be added to a companies balance sheet and then used as collateral to raise debt for the CAPEX to build a mine plus the 2 years OPEX needed to run the company before first revenue comes on stream from Gold/Silver production.
A Junior will doubtless say 25% of a valuable producing asset is better than 100% of nothing. Again OMI proves the point that they had a producing mine in Uruguay that provided the cashflow to fund the Colombian project, but Uraguay grades dropped and they had to liquidate and go cap in hand to Newmont for almost 20% of OMI at rates very favourable to Newmont as it was over a barrel. Even Hummingbird Resources (HUM) that produces 110koz gold /annum decided to do a 49% Earn-In with a 3rd party for its Dugbe project to avoid CAPEX & OPEX costs upto DFS ... so what chance does a Junior have with no asset or cashflow, 25% retained interest in a bankable asset and minimal risk seems like a steal.
In exploration terms 'Fortune may favour the bold' but in mining terms 'Cash is King'. DYOR APR
Thanks for the input, much to think on. Personally I really like the risk : reward here and with near surface gold at Haties just south of Telfer. On the JV front GGP have not given NCM everything as they only JV'd on licences over Havieron itself and retain 100% of their other licences so any Rincon / NCM JV could do the same with Haties being 12-14km south of Telfer and near surface implies an open pit which would suit Rincon and Telfer. @SB you are right of course any JV with a major means you give up a chunk but compared with minimal capital outlay and 30% vs 100% and massive PI dilution I know what I would choose as you then have a decent share structure + Cash to explore your other licences. Easy choice that any junior explorer would take every time as alternative is bleak
Umm the % will go down but the $ significantly increased. I know which I prefer, don’t forget the initial capital injected is seed funding - any raise will be a substantial premium. I would take a jv with Newcrest or another major any day but way too soon to think along those lines.
It’s a great risk : reward based on all the information to hand which is a lot all things considered and we (GUN) were fortunate enough to get in early
Having given some thought to your last two post, I am not sure I can be as optimistic as you about Rincon Resources.
Having said that though, I would not mind, if you’re right about a golden future.
There is no doubt that Gunsynd is on the very cusp of becoming something.
Or that in a year or two from now, investors would wish they had bought in at today’s share price.
But is it really Rincon that will be the company maker in the near future?
After a successful IPO, we will no longer hold the fantastic percentage of 28% in Rincon Resources,. Our holding will likely have been reduced to 10-15%, maybe even lower. And I have no clue as to how much damage, it will cause to our cash holding, trying to retain a meaningful percentage.
So will Investors really go crazy over Gunsynd after Rincon Resources’ IPO, if there is still a long way to the ground being mined?
Or even worse, they are planning on a Joint Venture (JV) with Newcrest.
I am not the biggest fan of Joint Ventures. Most of the ones I can think of, have been so unfavourable to the junior explorer’s in my view. (although in some cases the share price have benefitted)
Greatland Gold have done very well, but I cannot say the same for Antipa Minerals.
For me it is hard to see a junior loose 70-75% of an asset time and time again, to either Rio Tinto, Newmont, BHP, Newcrest etc. etc.
Unfortunately it seems to be the name of the game when doing JV’s.
If Newcrest are to take the same approach with Rincon Resources’ South Telfer prospect and the shareholders of Rincon Resources let them, then Gunsynd will end up with next to nothing.
South Telfer’s potential ownership in such are scenario could look like this:
Rincon Resources: 25%
Gunsynd would in this case end up, only owning 15% or less of Rincons Resources share of the pot. i.e. next to nothing of the whole South Telfer and far from our original 28%. Granted we got those 28% cheap, but we are likely to pay dearly to maintain a holding of 15%, after an IPO, and before the potential disastrous JV.
So with the above scenario in mind, I cannot be in favour of a JV with Newcrest.
We will be much better of if Rincon Resources decides to start mining it themselves. The gold is near surface and they could start out with an open pit mine.
Okay, so I have been watching to many gold digging programs on the Discovery channel. But it seems rather straight forward.
We do not need the same equipment as they have at Telfer to begin mining. What they have at Telfer today, is not what they started out with in the 1970’s.
Here follows two links to different providers of mining equipment.
Okay so we now have a potential 'company maker' in our 28.4% of Rincon with large solid prospective Pilbara gold licences with a host of historic data from NCM (no less) confirming presence of gold at good grades. IMHO the 4x things that would trigger a series of serious rerates of current £3m MCap are in order: (1) Rincon announce IPO and AUS$4-6m cash raise to fund licence exploration = 540km2 & multiple targets (2) GUN confirms further buy-in to Rincon IPO to target 15% holding post-IPO = GUN confirmed intent & 15% target (3) Rincon recompile historic dataset, produce model and complete infill drilling programme of new targets (4) Rincon do a GGP style %Earn-In deal with Newcrest to help feed the monster that is Telfer 12km to the north of Hasties project and 25-30km NW of Westin Au / Cu project The first 2 are nailed on but no confirmed timeline (as yet) and (3) is a given with (4) seems likely IF Rincon/GUN can sort out 1, 2 & 3 above.
Check lastest NCM website for their Corporate Strategy confirming Telfer mine EOL in 3-4 years hence headlong rush to bring GGPs Havieron Licence onstream ASAP. Artemis Resources also in a headlong rush to prove up their licences surrounding Havieron so Rincon is under-the-radar IMHO as no-one except GUN is looking in the other direction.