Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
@lowpay The "material" referred to is the tailings
ATB APR
@GTMufo Do you understand construction and/or mining so you can say why you think that? ... especially when the tweet categorically says it will be producing?
ATB APR
@GTMufo Sorry do not agree with a umber of your points:
> behind schedule - there is no "schedule" as GWMO JV plant dependent on being licenced so not under tehir control; JV has actually carried on working on plant in PARALLEL to licencing which REDUCES overall timescale AND says GWMO are confident of getting a licence given site was previously used for same purpose
> Cash Raise - whilst nothing is guaranteed, JV is recommissioning existing plant NOT building a new one from scratch. To my mind
>> 1/3rd cost in preparing site and groundworks = already there !
>> 1/3rd cost = build site & plant = mostly there and currently being worked on
>> 1/3rd cost = commission yet to be done
Not sure you read RNS or understand how these things work given some of your comments especially as Stage 2 and 3 of plant will be paid for out of future earnings NOT cash raise and Stage 1 is just gravity separation so CAPEX is minimal
ATB APR
@121 From memory they also found additional copper close by but did not have sufficient drill holes spaced closely enough to include them with any confidence in the JORC. Personally I wish they had not gone for the ultra deep moonshot and had instead gone for the lower risk route and declared a much bigger copper JORC instead.
BH needs to demonstrate that the gold/silver strategy is working by ...
1) Getting gold/silver processing plant licenced, built and operational
2) Retrieve and process OMCO and MJ mine historic tailings to generate revenue
3) Prove up & JORC register the shallow, high-0grade OMCO mine vein extension
4) Get a 3rd party operator onboard to mine the new OMCO mine extension via teh JV plant
Et voila ... sink a few holes at M2 copper and significantly extend the existing JORC to de-risk bringing in a JV partner
No one said this was easy !
ATB APR
@GFMufo I have no idea what you are now talking about, spending how much a day to build or achieve what exactly ? ... please explain
ATB APR
Well spotted and really good positive interview with NvS
ATB APR
@GTMufo What part of .... did you miss?
1) £130k cash at end Dec-22 plus £800k capital raise in Jan-23 =£930k
2) Once processing plant build is complete and licenced to operate they will be generating revenue from ...
> own OMCO & MJ tailings = £1.63m in 2023 (see breakdown below)
> 3rd party miners supplying ore to JV plant for toll-processing
> when Stage 2 Heap Leach plant is built can reprocess 31kt OMCO ore for circa 50% recovery of Stage 1 processed ore
From May-22 RNS "an inferred mineral resource of approximately 31,000 tonnes grading 1.6 g/t au and 3.0 g/t ag for 1,600 troy ounces of au metal and 3,000 ounces of ag metal" so when gravity processed (stage 1 plant under construction) then:
> gravity gold recovery = 1,600oz JORC *50% = 800oz @$2k/oz = $1.6m revenue
> gravity silver recovery = 3,000oz JORC *50% = 1,500oz @$22/oz = $33k revenue
> sum revenue = $1.63m or £1.36m in 2023 assuming not-too-demanding 50% recoveries
IMHO GWMO is a MCap £4.23m with cash and cashflows as follows:
Cash = £930k max (£130k Dec-22 plus £800k Jan-23 minus 6-months run costs over winter)
OMCO tailings Stage 1 processing = £1.36m revenue ... initial plant in 2023
OMCO tailings Stage 2 processing = £680k revenue ... requires upgraded plant so more likely 2024 (400oz gold & 750oz silver or £1.36m *50% HL recovery)
Clearly future cash generated = gold/silver sales revenues - plant run costs but profit on £2.04m revenues from OMCO tailings alone is likely to generate £1m+ profit and AFTER paying for GWMO 50% share of plant upgrade to Stage 2 Heap Leach
My best guess is JV will go for a multi-pad Heap Leach that they can start small and scale up as they progress reducing risk and time to get to Stage 2 so that they can reprocess OMCO tailings and generate more cash ASAP
Looking good GWMO
ATB APR
Interested to know why we have dropped on Final Year results to end Dec-22 plus updates since all of which by definition have already been published via RNS ??
ATB APR
@Chisler Looks like a few chancers trying to talk down the SP whilst we wait for processing licence to be approved & plant to be commissioned..
GWMO is cashed up due to Jan-23 £800k raise, plant is under construction and tailings have a JORC resource against them ... all we need to do is top-up when we can and wait
Anyone know the plant capacity in ton/day?
ATB APR
@lowpay I think BH has already stated that processing plant in down in the valley so unaffected by "mountain" weather where the claims are clustered. Check website shows a map of relative locations of all claims and process plant if taht helps
ATB APR
@GTMufo Copper play was effectively shelved in 2019 in favour of Gold/Silver due to high costs of upgrading copper JORC without a JV partner so don't expect much effort or money to be spent on M2 from GWMO.
As for possible cash raise GWMO are MCap = £4.85m with circa £900k cash and a gold/silver processing plant coming online over the next 3-6 months that can realise circa £1.6m revenue from its OMCO JORC tailings resource. This means GWMO hires trucks to drive along tehir newly built roads, dig up the tailings from spoil heaps, load trucks and send to own JV mill/processing plant.
This is grounds for some serious optimism
ATB APR
good to get brief summary of progress & status to end of dec-22 date but more importantly to reiterate way forward.
finances & cash position:
> cash at dec-22 = euro 150k or £130k
> capital raise = £800k in jan-23
> implied cash position = £930k minus 6 months opex costs
naturally concerned that cash position has been significantly eroded by investment in new jv for gold/silver mill & processing which is under construction albeit subject to final approval before it can start operating.
omco tailing processing:
prior may-22 rns stated "...for the olympic tailings project comprises:
· an inferred mineral resource of approximately 31,000 tonnes grading 1.6 g/t au and 3.0 g/t ag for 1,600 troy ounces of au metal and 3,000 ounces of ag metal"
when gravity processed (stage 1 plant under construction) then:
> gravity gold recovery = 1,600oz *50% = 800oz @£2k/oz = $1.6m revenue
> gravity silver recovery = 3,000oz *50% = 1,500oz @$22/oz = $33k revenue
> sum revenue = $1.63m or £1.36m in 2023 assuming 50% recoveries
> 51kt ore set-aside for reprocessing via stage 2 plant to recovery up to 800oz gold and 1,500oz silver
mineral jackpot & omco exploration targets for future tailing processing:
additional rns may-22 reported omco & mj tailings have not been officially been jorc hence assessed as an "exploration target":
· material underlying the omco tailings: 3,400 - 6,400 tonnes grading between 0.5 and 1.2 g/t au and 1.2 and 2.1 g/t ag.
· olympic mine co**** stockpile: 9,000 - 12,000 tonnes grading between 0.9 and 2.4 g/t au and 2.0 and 5.1 g/t ag.
· mineral jackpot spoil heaps: 4,200 - 7,700 tonnes grading between 40 and 140 g/t ag and 0.3 and 0.3 g/t au.
in summary:
gmwo can realise at least £1.36m revenue from omco tailings (using jorc stats) minus as yet unknown commissioning & processing costs via its new plant under construction but likely to be at least another £800k assuming £500k "worst case" costs.
looking good for a serious rerate from mcap = £4.85m once new plant approvals to operate have been granted and gwmo becomes a micro-cap gold/silver producer
atb apr
@jc the big issue for me being heavily invested and heavily underwater is how many new shares will be needed (ie %dilution) required to settle clns, possible match-fund new capex and recapitalise gcat once lse prospectus has been made available so that gcat has ability to issue more shares (if required) to make this happen.
imho post-funding gcat will revert to circa £15m mcap or roughly 2.5x todays mcap as some certainty returns. however, we do not yet know the denominator (total shares in circulation), so if current mcap is £6.1m (1.88b shares) and sp=0.325p ....
> no new shares required & mcap =£15m then sp = 0.8p & ~1.88b shares
> +10% new shares & mcap = £15m then sp = 0.725p & ~2.07b shares ... raises £0.6m new capital ?
> +20% new shares & mcap = £15m then sp = 0.665p & ~2.26b shares ... raises £1.2m new capital ?
> +30% new shares & mcap = £15m then sp = 0.615p & ~2.44b shares ... raises £1.8m new capital ?
clearly we do not know how much any new lead funder will require in new equity to be committed by gcat as part of any non-dilutative capex raise, but my sense is it will not be £0. my *** packet calcs above also assume no new warrants as part of any deal which seems unlikely given gcat does not have a strong bargaining position and any refunding will be based on current sp not post-funding figures unless rmc can renew his magic circle membership.
atb apr
No surprise that operations have been shut down for 2 months of Q1 given cash position BUT new high-grade zone has boosted gold production "The plant processed a total of 6,246t at an average grade of 3.60g/t through the CIL circuit and a further 12,858t at an average grade of 1.25g/t through the Heap leach circuit to realize a total of 627 ounces in gold sales."
So broken down and assuming circa 50% recovery ... giving 627oz production
> Plant 1 Mill/CIL = 6,246t *3.6g/t *51% / 31.1 = 369oz
> Plant 3 Pilot HL = 12,858 *1.25g/t *50% / 31.1 = 258oz
In Summary:
Operations = we know that from early Mar-23 both open pit and new high-grade zone are now operational so both Plant 1 & 3 should be able to ramp up production as everything comes off "Care & Maintenance", but we don't know how fast given cash position.
Gold Output = new high-grade zone is a game-changer for GCAT but we don't know how fast this can be ramped up given this is a new zone and has had little if any mine development.
Plant 4 construction = we know it has been started but construction ceased due to poor cash position and some capital items to increase capacity of both mine and process plant have been ordered and are due for delivery
Funding = we know from last RNS that Mill End settlement has now been agreed albeit with $800k outstanding to be "resolved" clearing the way for "new" main funder to come onboard and we know DD is underway although name of funder and terms of funding are unknown.
We know GCAT is a going-concern with most everything coming off C&M in early Mar-23 doubtless required to preserve cash. We have long lead-time capital plant items confirmed to be delivered but will need funds to install and commission before they can come online.
Progress at least !
ATB APR
Well re-reading the RNS both KG and RMc now own NO shares in GCAT having transferred their shares to Mill End ... so whatever we may or may not think of the directors they have paid a VERY high price for the Q4 funding mistakes made.
Now we just need to get the RNS clarified as to the lower settlement bound with Mill End ... is it 0.035p or 0.35p as that decimal place makes a HUGE difference!
ATB APR
@ID78 The 93% recovery figure is what Plant 1 and 2 combined can achieve and what the upgraded Plant 1 is expected to deliver according to teh presentation.
Alternatively any decent grade ore can be put through Plant 1 (72% recovery) and then put through HL with 53% recovery ...... so
Plant 1 Mill & CIL = 72% recovery
Plant 3 HL = 53% recovery
Overall recovery = (100% gold in ore) *72% + (28% gold in ore) *53% = 87.5%
I hope that helps
ATB APR
@ID78 Going back through the figures Plant 2 Tailings had an approx 50% recovery on the partly depleted ore coming out of plant 1 AFTER 72% of the gold had been recovered taking overall recovery from 72% to 93% using CIL process. When GCAT was floated only Plant 1&2 existed so using Plant 2 made sense. Now GCAT has Plant 3 HL with similar 50% recovery but at lower OPEX hence why Plant 2 is now uneconomic.
What I am not clear about is how adding more CIL capacity to Plant 1 is any different to using Plant 2 as stated target is much the same recovery as using Plant 2 which already exists and is operational ... clearly missing some nuance!
ATB APR
@predator/SOAG Same predicament being "stuck" underwater and very much wanting to average down BUT knowing that "some" dilution is baked in to settle the outstanding & indeed overdue CLNs. There seems to be no "right" answer given what we know, suspect or can reasonably infer at this point in time.
IMHO this is what I think I know:
> Expansion plan in presentation broadly as expected except fate of Plant 2 unclear and HL usage vs capacity unclear
> Priority1 Exploration set to target 2Moz resources across Kilimapesa and VR but timing unclear
> still targeting Nyakafuru deal completion and continue to bring project forward to add 50koz future production
> CLNs have now been disclosed BUT resolution cost in cash/share issuance unclear ... large dilution very possible risk at this low SP as CLNs can be converted to shares once Prospectus is available
> Kilimapesa high-grade zone @4.5g/t is 3x historic ore grades so 3x gold for same cost/tonne mined and processed has possibility of driving AISC down considerably assuming enough of it can be found but identified 6 months worth so far!
> Presentation implies SP will bounce back upto 1p once funding has been resolved but lots of assumptions baked in including minimal dilution is achievable and/or announcements will deliver lots of good news to offset some dilution
ATB APR
Interesting presentation especially:
> Plant 1 Milling "Plant will be optimized to increase recovery from 75% to +90% as part of the expansion project" 93% recovery was previously achieved by hooking up Plant 2 Tailings but this plant is stated as OFF and not part of Expansion project so not sure how you get 75%>90% without Plant 2
> KPG Plant 2 Tailings is NOT in expansion plan ... my guess is 50% recovery is very similar to HL which is cheaper to run so why spend lots of CAPEX on Plant 2
> Plant 3 HL at has 3x 7.5kt pads for 22.5kt capacity running at 15ktpm throughput BUT presentation says will be expanded by an additional 50ktpm HOWEVER diagram on page13 clearly shows plant Plant 4 Commercial HL as 6x 20kt pads giving total 120kt capacity so an additional 50ktpm throughput implies 3 of the 6 large pads to be commissioned or 50% of Plant 4 designed capacity as HL cook-cycle looks like 5-6 weeks/pad to get 50% recoveries
> Exploration Priority 1 = Vim Rutha & Kilimapesa both targeting 1Moz with VR MRE expected before Dec-23
> Nyakafuru Mine is targeting 50koz so expecting 2ktpd plant design or 4x current KPG plant scale
> Nyakafuru Reefs acquisition has not been mentioned as this is another 400koz JORC resource, but it is shown on maps
Just a few random thoughts
ATB APR
@BigBoy Yes but if ARCM retains 30% and AAL remains the operator then ARC gets PASSIVE income from its retained share of the NewCo whch it can use to fund its exploration AND still be a mid-tier producer
ATB APR