George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Whopping head grades of 10g/t but still an AISC close to $1,000 (incl silver credits) tells the story. It’s just around the horseshoe from Red Chris, several good discoveries in the area still early days (ie Benchmark).
I’ll take a vertical gold/copper ore body all day, thank you ;)
I’ll put my negative hat on for a moment and say that the 2MT / 3MT PFS is the worst thing to happen for our near/mid term value, and combined with slowing down the resource growth its a smart (err tricky) play by NCM if they did intend to suppress us for a takeover attempt.
I was trying to find producers with similar AISC, which is difficult for good reason! Looking at B2 Gold, they have a market cap of £ 3.7 billion. I think we would need a similar market cap to be 1£ per share.
They produced over 1m ounces last year, and have 20m ounces in reserves and resource.
Based on our PFS mine profile for a 3MT operation, we would produce (AuEq) 40,000 ounces (GGP 25%) in 2024 and then circa 85,000 ounces (GGP 25%) for the remaining life of the starter mine. Hopefully we have 3m ounces (reserve and resource, 25%) in the coming couple of years. I agree with Bamps that these early production figures will be higher.
My view is we need the shackles released by NCM for both annual production growth as well as resource growth, not to mention a semblance of reasonable valuation to return to the sector as a whole.
Couldn’t care les about the 5%, once Shaun mentioned a ‘cut off’ date it became apparent it would be a bonus for NCM; whilst we’ve not seen the JV, the term fair market value should have never been used in this context, IMO.. More excited to get financing sorted, and for NCM to start acting like some of their more aggressive peers and start proving this up over 20m ounces.
Thankful Shaun is in the big chair now.
GGPThru, you are the man! I was about to type the same about Folegandros. We’ve stayed at the Mar Inn and Kifines Suites there, both in Chora which is perhaps the greatest town on the planet.
Rakomelo…great memories, perfect after dinner and wine. Recall it’s basically petrol boiled with honey and served with a biscuit!
MH01, if we want to forecast increased mining costs due to inflation, it’s also fair to forecast a copper price well in excess of todays spot price due to inflation / demand. This would easily offset any increases in input costs, as an AISC credit.
Using spot gold and copper right now, the average margin per oz. based on the PFS would be approx. $1,440/oz.
As Bamps can explain, using the same parameters, the super high grade stuff to come out first would likely have a margin of over $1,800/oz right now.
The copper does silly things to the economics of Hav…
Hurry up, Sandeep, this could get painful!
Thanks TT, great article. Reckon Sandeep sounds a bit like Bono today in the NCM offices: ‘ShaunDayyy, blloodyyy, Shaundayyyy’.
If you look at where we are and what Shaun has been up to the last 12 months, it’s obvious he’s been preparing for this since Day 1. Put the team together, prep for debt financing which I hope is next. I wouldn’t put it past him to have some other news in the pipeline (EG, Tasmania, etc.) just to strengthen the companies position. Proven himself to be a leader with character (promised us an updated resource, went to battle and delivered).
“Minyari drilling at depth confirms continuity of moderate northwest plunging “pipe” like thick high-grade breccia mineralisation which remains open at depth providing further exciting exploration upside”
Hmm what’s on the northwest trek from Havieron to Minyari…
Hi Marmaris, no one has seen the JV agreement, so no one knows for certain. From my experience in these type of JVs, the non-operating (or minority) interest may be precluded from publicly releasing info such as a resource update. Unless perhaps, that info was deemed material / required by a regulator or the stock market…
I have little doubt SD has his own current resource estimate sat on his desk, with a ‘stonking’ number. I would also guess that SB saw this document in early Jan, as something slowed down NCM…
All conjecture on my part.
Is Mr. Day voicing via Allan Gray as well?
Games afoot, and there are logical enough theories at both ends of the spectrum. SB feeling the heat to get the 5% for as little as possible? He’s already under scrutiny, seems a dangerous and short sighted game to play. SB playing the long con to suppress GGP and go for the whole shebang? Doesn’t seem Allan Gray or shareholders would be supportive, they want divis now.
This is the most interesting 48 hours in my two years of being a shareholder in this company, because for the life of me I cannot think of a reason why NCM would voluntarily delay a resource upgrade by 10-12 months; as Dip says, it’s a relatively simple process (data is in hand, input models completed) to appease shareholder on the capex spend and ROI, add ounces, etc. There’s some low hanging organic growth for you, SB.
My jaw dropped when Shaun said ‘upgrade the resource closer to FS’. I do wonder when Shaun became aware of this delay - up to December, it was always about updating the resource in the February quarter. In the late Jan (Proactive drill results) and early Feb (Investability), the 2022 road map had no real mention of resource upgrade, only FS and exploration.
What happened in the first few weeks of Jan, did Shaun push hard in the early 5% negotiations? Was it earlier - did Shaun **** off NCM with the December announcement of NCM wishing to commence the 5% negotiations? Enthralling stuff.
Also, Pretium shareholders think they got shafted and NCM got it cheap - goes both ways.
Only poking the stick Zoros, sorry to hear you’re sick. I had it on Christmas Eve (along with wife and 11 month old!). Which here in Dubai means you can’t leave the house for 10 days!
Feel better pal, you’ll have some good reading material and presentations from SD to keep you occupied tomorrow :)
I’m going for 7.7m oz equiv.
No no Zoros, I’m holding onto your 4.4m oz AuEq prediction for MRE2. You’re predicting a 200k oz AuEq increase, 14 months after the initial MRE and all the infill and growth drilling in between.
You preach to this board as an authority on the value of GGP, can’t make glaring errors like that my friend.