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Hopefully the prof will be able to give an update on talks in the short term. Obviously can't give names but would be good to get an update.
At a 4m market cap with a JORC resource, high gold price and massive potential for large scale open pit mining this could really fly when a new partner comes in. This time the emphasis will be on mine development.
As per announcement of 29 Nov 2023:
"The joint venture agreements provide that in certain limited circumstances, Demir Export will be entitled to a net smelter royalty in the licences, capped at the level of investment made, in lieu of their convertible shares should it exit or terminate its involvement in the joint venture during the current Phase 1 stage."
It exited, exchanged its convertibles for the royalty. Over €5 mil spent and '000s of metres drilled, and they pulled out of their investment. Very difficult for CGNR now back to square one. No resource ounces added in 7 years, no testwork done, no development plan, multiple prospects tested and results not good enough to keep the partner interested. Cash at 30 Nov was only €262k. Worrying times.
I suppose that, regardless of who wanted the JV to end, CGNR are more attractive to a potential partner by owning 100% of everything again
No I don't think so. The 5.65m includes the 1m they paid at the start for the transfer of the licences.
Demir had a choice. Continue with the JV and spend lots of money or take the NSR. The option of walking away with 25% wasn't going to work because it would deter anyone else so they wouldn't have got any money back.
No, they aren’t getting their money back. Yes the NSR covers the €5.65m but they also gave CGNR €1m for the privilege in the first place. I maintain this is a shocking deal for Demir, and amazed it’s all so amicable when they spend all that time and money to come away with a net loss and are happy about it? What am I missing?
I agree Fairview - at least this way DEMIR have a chance of recouping their investment - so actually I don't believe it was a bad deal for DEMIR - it was a practical deal for both parties to enable both move on.
I think Demir decided to exit. I think they were always looking for a big gold miner to join but it wasn't going to work with Demir holding 25% and cgnr wanting a decent % too. If they demanded their 25% it was going to be difficult to move the project forward. Taking the NSR allows things to progress and they get all their expenditure back.
If Demir did then why did they leave with, what appears to be, a shocking bad deal? Surely they would have demanded more than a distant partial refund ?
Do you need to drill at depth at Clay Lake? Makes sense at Clontibret but Clay Lake is big. There's years of mining gold within a couple of hundred metres of surface.
As for finishing the JV without another partner lined up, they were looking. That's why they were at PDAC. They had interested parties but they didn't know Demir were exiting at that point. Working out a deal involving Demir and another partner was much more complicated than it is now.
@robemy - you're assuming CGNR ended the JV, I'm not (or at least I think it's more probably DEMIR did)
Why would you finish / extinguish an existing JV unless you already had another lined up? To do so without the assurance of a pending deal would be somewhat suicidal. Therefore I think we will have to wait long on a new partner announcement
In my gut I always felt these tenements needed to be drilled at depth to establish whether there was a decent resource or not. The shallow drills should have provided hints/indications where exploration at depth is needed - great for a new JV partner.
The issue is mining at depth is not going to attract the vast majority of mining outfits. It's a particular set of skills / challenges that not all miners possess - I'm not sure DEMIR had them (could be very wrong, but that would provide a plausible reason for the dissolution of the JV).
Let's see how long it'll take to onboard a new partner/s, I don't expect it'll be a short time period at all.
The other thing I'd like to see with all respect to Prof C, he has accomplished great things, but I really do believe it is time for him to step down. His constant repetitive rhetoric and style is out of kilter with the way the mining industry now functions and investors are not attracted by this style.
Although of course they would have had to continue paying their way but still that is 25% a large gold miner would want themselves.
I never understood what Demir were doing from day one. A year was spent drilling 8 holes at Clontibret. They never attempted small step out drills at Clontibret to grow the resource. They never tested continuity of gold at depth.
As for Clay Lake that was looking like a huge open pit gold mine. Millions of ounces. Isn't that what they wanted? To only drill 8 holes in a year and then stop is bizarre.
I suspect they wanted another partner to come in but big partners weren't happy giving 25% to them for only spending 5 mil.
All seemed like it was a rush and Prof even seemed to coming to terms with it in interview
Relaxed !!! wasn’t angry or disappointed only personal with Demir staff 🤔was heading back home..
We are sending out a message but it only happened yesterday 🤔 ……..He stated…
What if Demir was bought out by a major ???
Jv !!Only part ( agreed)of the termination deal was smelting to recoup investment.@2% capped,seems very strange 🤔
Demir is a private company and doesn’t have disclosure its agreements of any nature…
Not saying it’s the case !!
But nevertheless it’s possible with a smelting agreement certainly confirms it’s of a commercial nature ….??
Prof ref Demir geologists could return at later date 🤔
They know where the gold is after all , .
That could also be agreed upon an exit.
Very interesting months ahead
But that aside
Both CGNR and KDR could have a low stripe mine coming then go on to prove up the remaining licence
Plus cash flow from the mine .
I have to say the Prof looked very relaxed and, once again, gave hints that there is interest from parties.
It is now clear why the JV terminated, Demir wanted to explore but Conroy wanted to progress a mine to deliver cash-flow. That should be a comfort as the break was not related to the quality of the project.
The market will revalue Conroy from these very low levels, it is nigh impossible to get a decent slice of stock at current prices which is a clue, if a JV of substance is announced with the intention to build a mine the shares will rocket, speculation could also drive a re-pricing.
No majors are interested in low grade refractory gold in the green fields of Ulster. Spin.
Wouldn’t rule out some serious offers to take CGNR in its entirety either.
Yes some in Newfoundland, with market cap $700m and nowhere near as advanced as CGNR. May not even have a jorc resource.
CGNR market cap of 3-4m is unbelievable really…. Sure Demir just sunk £5-6m into CGNR. As soon as there is a sniff of the new majors name, the market will rectify this absurdity
The prof reckons there are miners in Canada who are at a less advanced stage than cgnr who are worth hundreds of millions.
Each sister could have a low strip mine ⛏️ coming??
☘️🇫🇮🤔💰
Plus many other licensees ready ⛏️
He didn't give the prof an easy time. Asked some good questions. About time they focused on the best targets which in my mind are Clontibret and Clay Lake. Already had substantial interest and discussed the possibility of 3 partners but now with Demir out of the picture things are more straightforward.
New lengthy interview with the Prof just released....
https://youtu.be/qsGUWzWWa78?feature=shared