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As a shareholder who has invested in this miner for some years now, I am still at a loss to understand how selling Tri-K benefits us. I'm not being negative, I just don't see it so please someone, enlighten me with facts and not just wishful-thinking or hype. The market always reacts positively on news of Tri-K and I sure hope it does when the deal is settled but why? We are giving away up tp 70% of the assets for a mere $4M of which we get after costs only $2.5M. We have debts. How do they get paid? Are Managem taking them over? $2.5M will last how long running the company? A year? Less? Then we have to fund 30% of the development when a bankable study is in, where is that money coming from? Yes, we'll get 30% of the profits but how will we survive long enough to get there? What have I missed that makes this deal so good for us? I really would like to know so some please cheer me up as I have a lot at stake here and the recent RNS always talk about being on the verge of bankruptcy when that statement seems inappropriate to the RNS content (why do they do that? Are they trying to scupper the boat?)
Hi Stuart, I am no expert in gold-mining, but I will try to enlighten you. In and of itself, Tri-K looked like a lifeline for us when it was granted in March 2015. The permit also had a condition that we were expected to start a construction by March 2016. If we didn't, we would start paying $100K each month to the Guinean government, which we did. If no construction started within 18 months from the date of permit (by September 2016), the government had a right to withdraw the permit. We got an extension till December 2016. Had we failed to strike a deal with Managem, Tri-K would have gone down the drain. As you know we couldn't have started a construction on our own as we are as poor as a church mouse and hardly making ends meet. No one wants to lend us money, because AVM is already staggering around West Africa in patchy pants. 30% stake may look like a bad deal, I personally would prefer 30% to nothing. In my view Manacet is a godsend. Inata is looking alright with its $900-$1000 cash cost for 2017. We are a gold-price dependent miner and any hike in gold price would push the SP upside and that's what we all want. Upcoming French and Dutch presidential elections may well play into the hands of gold as the EU may fall apart if Le Pen wins it. AVM could prove many so called experts wrong and we may end up having the last laugh.
Right, so let's assume Inata will go on until 2019 with the increased reserves and gold at $1200, the profits will pay for running the business and repay the debt. Tri_K will need funding to bring into production. Presumably we can borrow against the asset and then enjoy 10 years of income assuming Managem increase the find to 1Moz as expected. Hopefully AVM will continue exploring to add to that. I'm just surprised at the lack of info from the board. They report a deal but don't say how it benefits us and where the funding is coming from. I would like to see at least some sort of plan for bringing Tri-K to production and a projection of it's profits. They must have discussed such things before deciding Managem was a good idea. Managem is selling the project to it's shareholders as a great idea but our board haven't done the same with us. All our board do is warn of pending doom at every opportunity as if they're planning to take the silver and run. Nice!
Stuart. Take a look back at the Tri-K reserve estimates and plans. My guess is that the management are kind of running around like headless chickens trying to get enough cash to stop this from folding entirely, so are not really focused on explaining tech documents to us. They're worth reading, the 1MOz reserve estimate doesn't appear unrealistic based on samples so far taken. The costs are, so far as I can tell, not yet known - there have been various options put forward varying from building new onsite processing through to increasing truck inventory and processing alongside the new Souma pile. Given that M now have 70%, they will be very much in the driving seat, so keep an eye on what they are saying in their own news flows.