In a few presentations the Doc has pondered why we are so cheap, initially he said buy the SPP you'll never see it so cheap after the arbitrage disappears. More recently reiterated how investors don't realise how real it is & how big it is. He's a geologist not an analyst. Probably the most accurate statement he made about the share price was - it'll go up & it'll go down. A joke but very accurate.
This stock still isn't understood. Are we a gold explorer, are we a potential lithium producer, now we are a gold producer? Our history doesn't help along with the name changes.
I think yesterday the market said - great you're making money out of the tailings, but doubt you'll do much more when they are expleted.
We are not priced as a producer, to be quite honest that is very reasonable. We've had 2 weeks of production with a finite reserve and a big mine with associated overheads. As the Doc says the deal "came out of no where". Ok, it's making good money at the moment, in order for there to be a future, the market has to see we can bring on the satellites then mine the main pit.
If you can see all that happening we're a minimum 3 bag current price.
If that doesn't happen, we're back to where we were 4 months ago - lithium, and that sector has recently taken off.
We have a fully ready World Class project complete with all approvals, DFS etc etc which is given no value. Our peers have valuations multiples of ours, many of these have no mining approvals etc. Better to be in an under priced stock than the alternative!
Our Lithium asset is either massively under valued or our peers have massively over valued valuations. Time will tell which is correct. Interestingly when you compare the likes of AVZ, LTR, PLL with overseas hard rock Li companies, they seem cheap as per some of their presentations. What does that make us?
Back to gold. As per yesterdays announcement, we are presently very profitable. The immediate plan is to feed the satellites into the plant until we can drain & start mining the main pit. I'd suggest the market doesn't see this happening.
How risky is it?
Firstly it's been done before when we sold 2 of the 3 satellites to Barrick, they mined 110k ozs. They did it quite successfully paying us a minimal commission. The recent satellite resource statement has given us an extra 113k oz and that is prior to the present drilling or considering Koting. Even at present production of 4000oz/month that would last almost 3 years. But of course we're not happy with just 4k oz/month. With our massive 4.5mt/pa plant we'll process that gold far quicker at a much higher oz/month rate.
So we have lots of time to get the main pit back into production. I'm no engineer, many pits have been drained before around the world, the Doc's estimate of about 3 months would be based on fairly accurate information. Lets face it, when they went there to do their due diligence, the 1st and most obvious questions that would need to be answered are:
1 how much cost/time to drain the pit
2 how much gold is left
3 what is the condition of the plant
They were obviously happy with all of that, so far we've ticked all the boxes, getting things done at a very quick pace. As we tick more of those boxes, the market will see we are headed for big things & value us accordingly. It just needs to see our plan is do-able and that we are executing it. After all, it's not a green fields project, it's continuing on with what Barrick was already doing, and recommencing the mining that was discontinued.
And then we have the World Class Lithium project.
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