A few things I have copied from my previous post some 3 months ago:-
1. Comparing Mt Rawdon and Mt Adrah on the information available to date and on an open cut operation alone highlights the huge potential yet to be realized from Hobbs Pipe 1 alone.
Interestingly enough, Pattersons did a site visit on 28th May 2013 and in their research note stated "Mt Rawdon has been the cornerstone of EVN’s production profile and is its lowest cost operation. Mt Rawdon is also the cornerstone of our valuation, contributing 56% or $0.50/share to our price target of $0.89/share. For what its worth, this equates to $350M.
2. Just as EVN encountered 35m @ 24.2g/t and NCM encountered 111m @ 7.1g/t, SOC are likely to encounter similar high grades pods throughout Pipe 1 and the rest of the deposit. - A few of us have been saying this for many months and turns out it is in fact the case with both GHD006's 178m @ 2g/t and GHD009's 10m @ 17.7g/t as predicted, and I expect a lot more to follow
3. But focusing on Pipe 1 alone, SOC are already higher grading on a Aueq and $/tonne basis then Cadia, Northparks and Mt Rawdon (all of which are flagship assets), prior to targeting high grade zones. Locating these could up the average grade considerably. - This still is the case, as the below tables outline SOC still outgrades all major deposits on a $/tonne and Aueq basis, and that is even with their high grade intersections included to bulk out to those grades, whereas ours are yet to be factored in and IMO the majority not yet discovered
*I'm not a research analyst, so some of these figures may not be entirely correct - happy to hear if they aren't
COMPARATIVE TABLE ABOVE
The table above compares SOC's Mt Adrah to NCM's Cadia, EVN's Mt Rawdon and Centamin's Sukari Mine (Egypt)
IMO SOC is already a league above EVN's Mt Rawdon and has the potential to end up somewhere around the size and scope of Centamins Sukari Mine - talking NCM size and scope is a little premature but still interesting
If you consider SOC's open pittable potential just on Hobbs Pipe 1, it is very possible they could prove up 1Mozs+ @ 1.3-1.4g/t (potentially higher once GHD006 178m @ 2g/t is factored in) which means they would have a larger and higher grading resource than EVN's Mt Rawdon already which Patto's value at $350M, and that is only the open pittable resource of a single pipe
If you have a look at Centamin's Sukari Mine, even our high grade intersections are very similar, even down to the resource grade and potential size - not bad target as it is valued at near $1Bn
What is important to take from these comparisons is that we already have a deposit that is likely to be equal to if not better than EVN's Mt Rawdon solely on Hobbs Pipe 1 open pittable deposit - that is EVN's flagship asset and still very profitable at AU$1300/oz POG.
With 6 very promising 3DIP targets to follow up, we very well could move into the Centamin style deposit. We already have Castor carrying high grade and potentially 3 or so more Hobbs Pipe 1 repetitions with those magnetic lows from the 3DIP
I think we all know the huge value yet to be unlocked in the suite of assets SOC has outside of Mt Adrah, but this goes a little way to getting some rough ideas of what Mt Adrah could be worth to us
Anyone thinking SOC doesn't have potential to rerate several fold from here just on the Mt Adrah potential, I again challenge to see how some of our predictions go in another 3 months - a few here predicted very early that we would encounter high grade intercepts and estimated a conceptual resource for Hobbs Pipe 1 of 3Mozs+ (later validated by Geosun), so lets see how we go in another 3 months - my prediction is for a potential resource (not JORC) of 10-15Mozs based on 3 Hobbs Pipe 1 style pipes and several very high grading more densely confined Castor style intercepts
I've thrown in below the $/tonne and Aueq table which we have seen a few times but is still of interest - this is based on Hobbs Pipe 1 drilling up to and including GHD004 - i.e doesn't include high grade GHD006 or any of Castor
* Again these are just my personal figures and thoughts. Happy to be corrected if anything isn't factual or not quite right and always DYOR
SOC Price at posting:
21.5¢ Sentiment: Buy Disclosure: Held
(20min delay)