Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
To be fair, they stumped up the cash to make the Blyvoor project a reality. Is ‘jam tomorrow’ and no dilution better for you? And the price was 0.85 at the close before announcement, so hardly a guarantee of easy money. Granted Kibo holders see a rinse and repeat pattern with dilution. But specific to this agreement, think was smart business with minimal impact
Blyvoor Gold gets go-ahead from Mineral Resources
This week, the mining company, Blyvoor Gold, that wants to continue mining at Blyvoor’s old 5 Shaft, received the environmental author-isation for their operations to continue.
Adele Louw | 1 day ago
The company Digby Wells Environmental, which handled the company’s application for environmental authorisation, sent out a notification that the company had received the necessary permission from the Department of Mineral resources on 21 February.
Appeals may still be lodged by sending an email to AppealsDirectorate@environment.gov.za.
According to information in Blyvoor Gold’s application, it could not re-employ all workers from the previous operation. It will, however, undertake community development projects and engage with the community. To stop people coming to the site seeking jobs, the company plans to use local labour as far as possible, even if it implies increasing the 70 per cent local hire commitment by reducing the 30 per cent provincial hire.
https://carletonvilleherald.com/29786/blyvoor-gold-gets-go-ahead-mineral-resources/
Nearly all mining spikes get sold into heavily once the reality of no cash or revenue hits home. Clearly Katoro haven’t been able to convince the market or rainbow chasers that this is happening without dilution. Once this uncertainty is addressed (without dilution) I think £15m-£20m market cap would be a reasonable target. There are a number of producing miners still trading at <2 x EBIT without debt so wouldn’t get too carried away with price targets. We could really do with a frenzy in mining M&A this year.
That said, I think the reality of near term revenues may be hitting home. Here’s hoping
News on 24th Feb 2020. Looks like Orion, who helped raise most of the 1bn Rand sold their Blyvoor ‘gold stream’ to Guerrero Ventures last week. Assume all relevant to the underground mine but shows the pace of events taking place there. Interesting to know if the tailings will get included in the upcoming NI 43-101 report coming out in a few weeks. The following snippets followed in the news release:
Blyvoor Gold Stream – Witwatersrand Gold Belt
Gold stream on the Blyvoor Gold Mine, operated by Blyvoor Gold Pty;
Status: Currently in final construction & re-start phase with initial production expected mid-to-late 2020;
*The Blyvoor gold stream will be the material property of Guerrero. Guerrero has commissioned a NI 43-101 compliant technical report which is expected to be completed and filed in the coming weeks;
*One of the world's top ten most productive gold mines, having produced over 45 million ounces of gold historically.
https://markets.ft.com/data/announce/detail?dockey=600-202002232137CANADANWCANADAPR_C4129-1
Just having a browse through this article from last year:
http://m.miningweekly.com/article/blyvoor-to-begin-producing-gold-again-from-q4-skeat-2019-06-27/rep_id:3861
So it looks like Blyvoor already raised $100m and have built a brand new treatment plant. Would assume this would be largely intended for the underground mining, but there must be huge opportunities gained from having Blyvoor already spent so much on infrastructure at the mine. Maybe there genuinely is very little capex left to cover? In which case, we could be seeing production much sooner than expected.
Still begs the question, why are they giving up 50% of production on the tailings to Katoro?
Basically very thin volume, and absent of buys - share price will drift sometimes on very small trades (i.e. £5k of shares sold, £500k wiped off market cap). That’s the game on AIM!
Can work both ways obviously.
The fever buying will return soon enough. Finance is the key to unlocking the value here
To answer the earlier query I raised regarding recovery - now found:
‘The project will seek to use proven mining and processing technologies, whereby the JV partners believe recoveries of 56% to 60% are achievable, based on feasibility studies and test work completed to date by Minxcon, with additional confirmatory test work planned to optimise the financial projections and conceptual designs for the processing plant.’
(So about 40% of gold content not actually recoverable)
Quite bizarre that we’re working out value on an opportunity that didn’t exist 2 months ago.
However, the JV with Blyvoor could well unlock the value in Haneti which genuinely has the potential to dwarf this tailings project.
All held in SIPP so quite happy to sit on them (can’t touch funds for another 12 years at least!).
I’d have liked to have taken a slice off the table after the recent rise (in at 1p), but too attached to idea of holding exactly 1% of Katoro :) (for now at least).
Correction- before DRD sold their 74% stake in Blyvoor. And now realise that the new extraction methodology is probably for the underground mining rather than surface tailings. Need to read up a bit more!
Currently hold 1.85m shares so beginning to to take much more interest here! In any case, should be good year ahead. Looking forward to finance confirmation.
I think you may have used normal oz for the conversion from kg rather than Troy oz. Brings the numbers down a bit - but not much. I just divided production by 31.1 (grams in each Troy oz.)
A few weeks ago I did come across feasibility studies carried out by DRD Gold (before sold to Blyvoor) which indicated slightly higher grades were expected (0.34g/t from memory) but unsure if these have been re-done by Blyvoor.
Efficiency probably the likely factor I’d expect.
I believe Blyvoor are actually using a new methodology for production on these tailings - which is part of the reason why costs are so low. To do with 2 stage explosions which mean back filling of waste reduced substantially.
Back of fag packet calcs on initial targeted production.
250,000 tpm @ 0.3g/t = 75,000g or around 2,411oz. So annualised nearly 29,000 oz.
And when production expected to increase to 500k tpm, that’d indicate annualised production towards 58,000oz. Obviously missing something here but curious why targeted figures so low in comparison with average grading
This is a re-rating on a massive scale. Plateau move
Neighbours at #Blyvoor "Far West Gold Recoveries" - Gold tailings project with about 3M oz Au and 42M lbs Uranium compared to #Blyvoors 1.34M oz Au and 17.5M lbs Uranium
Asset transfer in 2018 for £68m between Sibanye Stillwater & DRDGold.
https://twitter.com/stirlingbridger/status/1226573069197750272?s=21
Worth noting Gold was $300 lower back then