Member Info for Obsy

Bought by Acrux Sorting Technology, who specialize in dry pre-sorting of ore to improve yields and reduce water use. Phil Day's ore-sorter idea is back! First job is to wheek out that half-mil worth of tailings thickener and see what the scrap man will give them.

Hi Bellers,
On the question of the free gold, I'd love to have a dollop of that concentrate in an actual gold pan. The gold I imagine is extremely fine, below the cut-off paricle size acheived in river panning, micron-size. My concern stems from the difficulty we saw in the Nov 30 gold-pour. Whatever went into that crucible was murky and dark, and the dore button wasn't exactly bright and shiny.

When we talk about methods for clean-up, a good panner does this on a small scale in a normal gold pan. As scale expands there are separator wheels then shaker tables, but one assumes the material has come from either river or alluvial ground. There is lots of black sand and the gold particles are pannable size. It gets very tricky when there is lots of finely ground galena crystals and the gold is small - you pretty much have to suck up every speck one by one. I speculate that there might be a problem here of fineness of gold coupled with high galena content. That would be my nightmare separation scenario at the river, and we know both those factors are present at Cononish.

Of course galena smelts to lead and sulphur fumes, then the lead smelts with the gold and you're effectively cuppelating, a bone-ash crucible will draw out the lead and other impurities leaving fine gold. I suspect however that it would have the clean-air boys running for cover.

On the 10Kg question, a number like that would be useful. I did a back-of-fag packet calculation going back over the three years' annual reports covering the BPT results. Doesn't help the a/c's are all in Ozzie dollars. Converting to pounds, allowing for the POG hovering under the 1K mark over that period, I get 469 ounces in both dore and concentrates yielded from the 7000 tonnes car park material. We could be kind and add the 10 oz rounds for 479 oz total. That would be just over 15 kilos, so if we assume the grades available currently are similar, at 3000 tonnes/month it would take 6 weeks to get 10 kilos worth.

The car-park was assayed at 7.9g/t so that's only a 27% recovery. I think they had hoped for 75% recovery from the BPT, 93% from the current rig. There would be a discount from the concentrate for refining costs, offset by the premium for the Scottish dore plugs. Interestingly by the numbers, the dore made up 40% of the yield. This is much more than the 25% estimate, which means either better shaker-table recovery or worse concentrate yield. I'm guessing that a big part of the current situation is they've spooled up the plant to find sub-par gold yields. It should be mentioned that RG himself made the point in a recent presentation that it would take much of year one of production before the better grades were possible to reach. If we have to wade through the tunneling ore to reach the stoping high-grades, then the BPT numbers when laid bare in grams per tonne don't offer comfort. If the 75% extraction efficiency number was correct, then the ore was only running at 2.8g/t. I do stress these are rough calculations, and not based on figures for the actual gold ounces produced.

Yayay, everything been OK for me with both AJ Bell (sipp) and Interactive Investor (ISA) products. ii charge what is for me a hefty monthly fee given low trades and holding. AJ Bell have no monthly fee for their Sipp, and worth mentioning that their personal communication through their message platform was reasonably good, except that it still took them several months to accredit my rights issue shares. It even involved a message from a "Richard" at Scotgold (wonder who that might be?) assuring me the shares were allocated on their master database and to be patient for the certificate to work through. At one point after the covid lockdown I could instead have bought them instantly at the 40p scratch price.

Hi LinViews,

And welcome to the discussion. A key question for all of us, so my 2 cents worth.

The investing game is part chess, part poker, part math, part gut-feeling, the science of crowds etc. We have all seen this stock behaving erratically over the years, and the long wait and various fund-raisers have meant a lot of doubling-down to keep pace with share dilution. People are very cagey about jumping in on an AIM stock with no earnings numbers yet. More often than not AIM startups go bust even with very promising projects on paper. Traders of long experience therefore like to go for a more certain, small profit, rather than take out a slew of risky bets most of which go to zero.

Those of us on here long term will know that the biggest jumps in the share price happen on upbeat news stories that appear in widely read or watched news outlets. Key events such as getting planning permission in principle//full project funding in place/final final final planning permission go ahead - do boost the share price, but often to levels the same as acheived by earlier weaker milestones.

In the world of investing there are many examples of stock valuations where the company would have to sell to everyone on the planet for many lifetimes to earn investors back their share value. On the other hand, companies have traded below their value of cash-in-hand plus assets melted down for scrap.

So for a company with only projected production numbers, the other consideration is that Scotgold doesn't have a pigeon-hole in the world of Junior Gold-miners. It is very unusual to mine a narrow quartz vein in this way. Normally a gold mine is either surface or accessing a large spread-out underground deposit, easier to calculate returns. To be viable, a vein has to be at least 2 metres wide, if narrower, you still have to dig out 2 metres to get your vehicles to the next section, lots of wasted digging of barren ore. The vein wasn't made to regulation, and can easily "pinch out" over long sections leading to anxiety and despair. On the other hand, bonanza pockets are possible to bring up the average. Ask yourself, if you were a seasoned investor of global gold mines would you dive in before you saw the numbers?

Personally though, I think that mountain is loaded, I am excited about the future, not just for investors, but for the upturn in prosperity it will bring to the whole area. Expect a bit of pop-and-drop behaviour of the SP when either the first gold-pour or the BBC documentary hits the wires, but hopefully more pop than drop! Its also a good long-play on the POG going forward.

gla etc etc.

Hold the faith on this one. I'm amused that for the first time we have a definite date for the first "ore from properly inside the mountain" gold pour, rather than just a month or even a year-end prediction. I have felt all along that this is the type of investment where the SP will really only establish itself when gold starts appearing. The current price represents just a fraction of the gold in the hill, this is very cheap gold, with the one drawback that it's several hundred feet inside solid rock. Between that and cash in the bank lies risk, which very often explains low valuations of aim venture capital projects, the majority of which fail. Indeed this very project is a phoenix from the ashes of a nineties aborted attempt after a kilometre of tunnel was dug. The black swan event of covid underlines that risk is ever present, the main one I can see being undue delays which starve the cash reserve.
So here we are. The management ever more clearly demonstrating their competence in the face of all difficulties, taking on a growing team of experts. The BBC documentary should create quite a splash when it airs - a far cry from the 2011 National Parks documentary series which focussed on village hall style politics. And the big question - will the crushers and shakers really yield the promised third of an ounce per ton once fired into life? I'm quietly confident that christmas this year will arrive with a little bonus for all the faithful on here. We're along for the ride, its been a long one already, now for the exciting part.

Judy, hang on for the ride. Some of us on here will recall standing in the rain outside a dank tunnel with rusting gates and some rails that didn't look like they had seen action since Brigadoon. Drill cores were open to the elements and taken by hikers as souvenirs and the impression back then was that maybe it was just someone's dream. The price of gold has doubled since then, and I'm not expecting the super-shed to take long to throw up. All the kit is on site waiting to be plugged in, the access now upgraded and Once the gold pours the project will quickly become cash positive and the majority management owned shares will want to generate some return in dividends. There is always with these types of things a disconnect between what will actually happen and what the pessimists in the investing world think has been over-zealously presented. The first quarterly balance sheet of gold produced versus running costs will close up that gap.

Well knock me over with a feather. The 2017 rights issue options that I applied for back in October have finally been admitted to trading in my pension account. I had chivvied the broker and also SGZ people and been given all the necessary assurances that all was well. Is anyone out there still waiting for their options to go live, or can I claim the prize for longest wait? OK, I know at least one on here had applied a lot sooner with an epic delay, I figured two months beforehand was way ahead of the time I usually give for paperwork deadlines. The tide of fortune has ebbed and flowed since then, but at least the current SP is still above the 40p strike price.

"Phase 1
We are set to move to Phase 1 following the
28 May end-of-cycle review of the COVID-19
regulations, if the evidence supports that."

Phase 1:
"For those workplaces that are reopening,
employers should encourage staggered start times
and flexible working.
We are also planning for outdoor workplaces to
resume with physical distancing measures in place
once guidance is agreed.
We are also planning for the construction sector
to implement the first two phases in its restart
plan with a decision to move to ‘phase 2’ of the
construction sector’s plan only after consulting
with government to ensure it is safe to do so in
line with public health advice."

Plenty to be getting on with topside as you say, draughty outdoorsy steel fabrication work on shed a priuority.

Hi Judy,
That's twice now since the autumn that a favourable article in the national press has caused a strong advance in share price. The trick is not to buy in response but to hold off until it pulls back a bit. The BBC have had camera crews following this project for many months with coverage of even AGM's and it will all be edited down into, I think, did someone say, a two-parter. That will get attention if anything will. Its worth noting that many of the trades on here are for mere hundreds, and even a ten-grander will bump the number. These volumes are what real traders call "illiquid" meaning there are not enough buyers around to sell a large holding to, should you wish to finally purchase that yacht. What we need to see is trades per hour not trades per day, and that hopefully lies ahead.

Hi Judy, and welcome from a long time lurker here.
We have been on a long journey from a "gold in them thar hills" myth to now almost the reality of our first gold pour of actual underground mined ore. Along the way there are several things that make this project unique. A brief explanation may help you to hold firm while the final act unfolds.
Firstly, the UK is not a "mining" jurisdiction. There is no local body of expertise amongst risk capital financiers, mining equipment manufacturers and ore processers. So SGZ originally floated in Australia, they had a wealthy backer who has since left, and had a long road to stay cash positive while they built a team to plan and finance the project.
Secondly, this is a very unusual gold mine. It is a rich underground vein of quartz and minerals, lead, pyrites, silver and gold. It is a bit like the classical idea we have from the old films of a tunnel held up by wooden props where guys go in with picks and shovels and load up a cart with rocks which are then washed. Except that, almost nowhere in the world today are the big gold mines of this type. Think more like an open cast quarry where the gold is very spread out but easy to reach. Because the mine is unusual, it is not a shoo-in for venture capitalists.
Thirdly, its just inside the National Park boundary. To be fair, LLTNP have treated the project with positivity and encouragement, however the mere fact of all the conservation rules has added a good ten years to the timescale.
These are all factors which create uncertainty and obstacles. However all significant risks and barriers have now been overcome. We have full planning permission, all the processing kit is bought and paid for and is sitting on site, the access tunnel is nearly fully widened, the processing shed is going up as we write, and the challenges now are matters of engineering, physics and chemistry, all of which are tried and tested.
When you roll up to the Royal Mint and ask for a sovereign, you will pay a fair amount over spot gold price for a shiny new coin in a presentation pack which will look very pretty. How cheap would the gold have to be before you were happy to buy it still buried inside hard rock? That is essentially what you are deciding when you buy SGZ shares at this point. The answer is that with production costs around half the current gold price, and the share value a good deal cheaper than projected earnings, its looking good for those willing to stay the distance.
The gold is there alright, plenty in the rivers, but we're going to have to wait for that first gold pour before we can really pop the corks on our Tyndrum Gold Whisky!

Just as a wee bit of positive perspective for the folks on here, I'm a long term holder and have doubled down here and there with the result that I'm a tiny bit underwater. I had my first "whole" day recently, but what keeps me going through all this volatility are two thoughts:
First, we are buying cheap gold here. We will only have it in our hands when it comes out the mountain. Therefore the SP will only do great things when gold pours start to happen in earnest. Its all very well traders piling in when a piece appears in the daily mirror or wherever, but the average investor has no idea of what extracting tiny particles of dust frozen hundreds of feet inside solid rock actually entails. To the human imagination seeing is believing, which brings me to point the second:
Yeah, so what keeps me going when my confidence falters is happy memories of days last decade spent in a not-too freezing and very picturesque river not too far from our mine. I have seen the gold with my own eyes, and I sleep well at night.

I'm half an hour away plus I talk with the postie and the run starts in Tyndrum. Big dump today but also a strong thaw setting in by tomorrow. Generally more rain at Crianlarich and although Tyndrum is 250 metres above sea level it never feels as cold as it should for that height. The west coast is much wetter generally and although the village is right on the watershed it counts as west for rain/snowfall.

Been a dusting of snow last couple of days, the first at road level all winter. The mine is up at 400 metres so has been a few times above the snow line, but the amount of snow right on the tops has been miniscule - evena week ago it was looking more like June. No storms worthy of the name or big rain either save the odd ****y wet day. So far the mildest winter I can remember and deffo ideal for construction. Most outdoor workies up here start complaining about the heat anytime the sun comes out.