RE: Maiden resource19 Aug 2020 10:34
I need to reread the RNS and fully digest when I have more time, but some initial comments from my side.
Maiden results seems solid and 5.6m/t is good initial stake in the ground, but this isn't the real story and isn't really any ground breaking news. The really interesting bits for me are:
- We now know where the cash from the ValOre 7m share sale is going and the urgency to sell in order to generate immediately available cash. Looking at the current ValOre SP I would say that we actually got a very good price for the 7m, lucky timing I guess.
- Next phase of drilling starting in 2 weeks shows the desire to get this thing moving. I wonder if a schedule is being worked to driven by a third party conversation(s) (see my later comments on external interest.)
- I like that they have delayed the PEA in order to further increase and prove out the economic case. For some this may be frustrating (no one likes delays), but producing a PEA with sub optimal figures would just be doing us a disservice.
- PEA is scheduled for early Q1 2021, so we drill in Sept & Oct and have the results by Christmas, then PEA is completed by the end of Jan (IMO).
- Using the NI43-101 reporting method was a 'wow' moment for me. No prior mention on this by JAN, I need to read up on this more, but I note what DCAT says about this being more stringent.
- Clearly there is a reason for using NI43-101. Three possible reasons (the power of three) 1. Discovery Group participation, all other members use this standard, it would make sense to require a consistent approach prior to participation. 2. JV Partner in the offing who also uses this standard, there could obviously several of these, but a stand out would be Largo who use National Instrument 43-101 – Standards of Disclosure for Mineral Projects (DCAT & Swizz have been speculating on Largo interest for some time now.). 3. Similar to previous point, potential offtake agreement being discussed.
- For me, I think the JAN BoD will want to monetize this asset and drive the maximum return in as short a time frame as possible. I may well be wrong but I don't think they are here to develop a 10 year mining project . They want to prove out the asset value and then maximize the return. So I see a JV/sale being positioned H12021 post PEA publication. This is much sooner than I previously envisaged.
- They aren't currently taking salaries so all cash is being driven into maximizing the asset value. They will want to maximize their holding value in any potential sale.
- I would speculate that more news is in the pipeline short term. I don't think we will be just be getting drilling updates for the rest of the year. Trial mining license potential? More Fodere updates? Additional results from soil and rock samples in new tenement?
Lots of other points, but this is my initial splurge. Hopefully some food for thought!
Tex
P.S would have loved to see a comment around 'early stage 3rd party discussions' in the RNS.
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