Firering Strategic Minerals: From explorer to producer. Watch the video here.
This Scoping Study for for the EXISTING Kilimapesa mine completed to underpin the Due Diligence undertaken by the recently confirmed non-dilutative funding of $10.5m from OCIM and the $3m from Philoro.
It is based on existing stated Kilimapesa metrics:
> 24koz/annum gold production from Mar-2023
> Upgrading Plants 1&2 from 500tpd to 1ktpd .. traditional mill, grind, gravity, CIL and tailing reprocessing
> Completion Plant 3 @35kt & Plant 4 @120kt capacity Heap Leach
> Updated MRE @Jul-22 of 705koz and 10-year LoM
> US$19,7m pre-production capital ... lots of this is already sunk capital since Aug-21 RTO (@Aug-21=$6.6m & $2.4m @Feb-22)
It now confirms several things:
> Solid economics with IRR of 114% and 2-year payback
> AISC @$1,095 ... previous guesstimate of $1,100 so not bad RM
> High project %IRR based on conservative economics with low POG of $1,650 & AISC $1,095
> Free Cashflow (FCF) ... so first 12 months FCF = $13.6m versus $12.6m stated in RNS implies $1m funding repayments or $41.6/ounce
>> Months 1-3 = ($1,700 -$1,095) *2,000oz =$1.2m/month
>> Months 4-12 = ($1,650 -$1,095) *2,000oz =$1.11m/month
>> Difference in Y1 FCF =($13.6m -$12.6m) / 24,000oz = $41.6/ounce "other non-AISC" costs
Importantly it also EXCLUDES:
> Expanded MRE based on extensive drilling campaign underway since Jun-22 expected to double resources and LoM with eventual target MRE of 2Moz (3 times current MRE)
In Summary:
IMHO this is a massive confidence boost in GCAT project economics and reconfirms the extensive DD completed as part of securing 2 big sources of non-dilutative funding secured against up to 20% of gold production.
Do not underestimate the positive effects of POG above $1,650 from month 3 which would accelerate on project IRR & payback in anon-linear fashion.
ATB APR
wow ... and that is what I call a hard bounce as MMs clean out stop losses below 0.875p all the way down to 0.822 to feed the buys all the way back up to 0.9p.
So looks like 0.875p should be a good solid support line on reasonable 31m volume so far today
ATB APR
@Coldspy Agreed I am now expecting higher highs and higher lows from here on in
ATB APR
Looks like price has returned to 0.875p prior resistance after the recent price spike following the very positive funding news. Whilst frustrating thsi type of price action is actually very normal in a sustained rally and IF 0.875p holds then it will be a bottoming pattern confirming 0.875p as support as short term sellers exit and stronger hands take over.
I could easily be wrong but IMHO I suspect that we should get a decent bounce and/or consolidation above 0.875p
AYB APR
Q3 Operations Report to end Sept-22 is now WAY overdue .... expected news on:
> gold production ... estimate 500oz/month in Q3 due to plant 1&2 upgrades
> production upgrades ... plant 1 & 2 status and timelines
> Plant 3 Heap Leach ... confirmation as 3x 15kt pads =35kt capacity and completed Q3
> Plant 4 Heap Leach ... confirmation as 2x 60kt pads =120kt and construction still WIP
> Heap Leach %recoveries for given cook-cycles ... would be nice as last was 53% for 2 weeks on Plant 3 Pilot in Mar-22
> Confirmation of end Mar-2023 target as production or capacity ... wording was unclear
> Updated MRE ... expected end Oct-22 plus confirmation that JORC compliant
> Update on expansion drilling progress across Longorian licence area around Kilimapesa
Fingers crossed will drop soon as suspense is killing me !
ATB APR
Just looking at the Daily GCAT chart we have clear support/resistance price points at 0.6. 0.675, 0.725, 0.875 & 1.025 which have been key inflection points established as the price has ranged from Feb-22 through May-22. We have (rightly) had strong positive reaction to the recent funding confirmation news with eth PX peaking at 1.025p (opening) and now heading back to 0.875p which should now be strong support.
... IMHO I am expecting 0.875p to hold albeit I am expecting it to be tested as traders cycle back out and take tehir profits
ATB APR
@Trek So reasonable worst case ... any POG increase, AISC reduction or amortisation over a longer period helps your payback figures, but as you say other than the small %fee there is not a lot else to go on
ATB APR
@Trek Just trying to get my head around your numbers ...
1) why assume 20.4 months term for OCIM Tranche 1 $10.5m or is that the term that is spat out assuming 2koz/month and 2% fee on 10% of production?
2) why assume 6 months at $500k/month for Philoro $3m loan when they said 6 tranches but no idea of period ?
Agreed on POG premium as output is metal and not paper and OCIM will be really making the "real" money on the arbitrage supplying metal into physical market where coins et al trade on significant premium to spot price
ATB APR
@JC Agreed, now that the £11m non-dilutative funding facilities have been secured it is all about GCAT BoD delivering on their 2koz/month or 24koz/annum production promises for end Mar-2023 which is a ramp up of approx. 4x from the current circa average of 490oz/month since Aug-21 RTO.
ATB APR
@ID78 Thanks appreciate the feedback, and in all seriousness go have a look at the decent investee companies I follow closely Rincon Resources (copper/gold), Charger Metals (lithium), First Tin, Eagle Mountain Mining (copper/gold) and Pacific Nickel (too easy).
Rincon Resources is still my favourite despite the drill campaign running about 12 months behind where I had hoped it would be; on the flip side they have added a new Paterson tenement and all the evidence says they have their gold under 80-150m of barren cover rather than GGPs and WSBNs 300m+ cover.
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Not seen any posts since Jun-22 appear and given large bounce that seems an issue with BB ?!
@TelyTubby Clearly not read a single RNS then ... if you are going to deramp at least sound like you know what you are talking about!
... and for the record GCAT has a non-dilutative cash facility of £11.07m ($13.5m) from OCIM & Philoro against up to 20% of future gold production sold at spot minus small discount so GCAT still gets benefit of a rising gold price against its low circa $1,100 AISC
ATB APR
@ID78 Yes GUN is an interesting Goldie/Commodity fund around 50-60% below NAV ... like anything depends on your focus and timescales, but also owns a good chunk of Rincon Resources
Sorry off-topic
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@SW1000 No idea as could not find reference myself so presumed I had missed it !
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@Devil Agreed, until POG turns us Goldies are all 'Doomed@
!
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@SonO***un & SW1000 David Lenigas is now helping to run the show at the Copper/Gold explorer Rincon Resources (ASX:RCR) who also have significant Paterson tenements south and south-west of GGPs Haverion and Telfer whilst (I think) WSBN is north of Telfer. DL has significant mining experience in the region and RCR is tiny but with lots of historical drilling plus recent stuff and more Paterson tenements to leverage.
Full disclosure ... that is why I'm invested in RCR and not WSBN. Also Gunsynd (GUN) is a 16%+ shareholder in RCR
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@Chisler Good to see Brian Hall, CEO topping up with a further 10m shares using his own money ... looking good
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@Bebeto Yep the Jul-21 prospectus (p35/36) stated Vim Rutha as multiple high grade veins approx 12g/t ...looking forward to drill results
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@Bebeto Let's agree to disagree on those figures shall we?
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@Bebeto I think most PIs investing in PMs understand that AISC isn't perfect, but what is leftover (POG - AISC) is (mostly) free cashflow and IF GCAT does not spend FCF on something then it is profit.
Yes, I should have been clearer, but certainly no intent to mislead just my presumption that most on this BB understand the difference
ATB APR