There is much speculation in that, specifically about the Reid-Rankins/Birthday "sister deposit" totaling 300-400K ounces of gold. Most of the mineralization they have found in the very limited drill holes in the area is 50m from the surface and nearly all the drill depths as such are not deep. I suspect the actual deposit is much deeper in a second layer of mineralization about 150-200m down. The old timers saw that the mineralization ended pretty quickly and just assumed it was the end of it. Then they saw Mt Boppy and assumptions built upon assumptions.
But the decent surface level stuff they have found in the area shows it is an arc point for ground-atmosphere energy discharge, and combined with the surface level deformations it is very likely that there is a decent sized deposit around there. This information is based on new science that will likely become mainstream in the mining industry within 10 years about how most surface mineralization is formed (Structured atomic model and electric transmutation discharge from cyclic events), but since it isn't mainstream right now it deserves a lot of scrutiny and shouldn't be taken too seriously. MKR would likely still find it using conventional methods if they drilled deep enough in the region.
"Unless Silver price significantly increases in the next 6 months, Manuka is finished as a going concern."
Unlikely, the stuff they will be mining is >100g/t material vs the 70g/t material that is in the stockpile. They have 10M ounces of silver graded over 100g/t. That extra 30g/t will pay for the mining needed. Unlike the Mt Boppy gold mine they only have to move the ore a few hundred metres to the plant.
Also the gold mine will likely be profitable for at least 6-12 more months for them just under the current pit, which won't take much work to get to. And if you think Mt Boppy Sth will be profitable that will stretch to 3+ years. So as it stands right now they have about 6 years of life in material at current prices will make them some decent profits, but not ground breaking.
If you estimate a massive decrease in silver/gold price then this 6 years would drop significantly. I don't think many people think gold/silver will be dropping much from where they are now.
"and is banking a $30 silver price already for the silver stockpile processing"
I showed in the other thread recently using pretty good methods their cost per ounce of gold is ~$27 AUD an ounce. That is based on diesel price being 1.5x higher than todays price. So most realistically maybe $25 AUD an ounce. However if we use $27 AUD then silver will need to hit $20 US an ounce for it to be break even on the stockpile. Do you think silver is going to be hitting $20 US an ounce in the next 6 months?
"Mining vergin dirt from the Wonawita pit has a significantly higher cost profile, as well as much lower grades. Under current price, it's not economic"
Well the higher grade of the stuff they will be mining (100g/t vs 70g/t in stockpile) makes up for the extra cost of mining. Check their costs on the gold operation that is ~150KM from their plant and you can see that it should cover it. But it should be cheaper than their gold operation anyhow.
"This stock is a total gamble...it's all speculation with this one!"
Well not a TOTAL gamble, very unlikely you will lose your bottom on this one because their current capital minus debt is worth more than their current market cap. So if they folded you should see a decent return on what you put into it. Some of their licenses they have in the region are worth more than people realize, especially when you factor in the drill results from other explorers in the region in the last 3 years. Not enough people keep an eye on all the goings on in the region.
But you have to make more of a gamble anyhow if you want the big returns that MKR will deliver on higher silver prices. If you don't think silver is going to be much higher this year I would avoid MKR and pretty much all silver stocks on the ASX. If the status quo remains I think at best within the next 12 months you are going to be looking at 50-60c share price. Not worth the risk for that return. But on $50 US silver we should be looking at $2.20 to $3 share price. So roll the dice if you think PMs will move higher.
MKR Price at posting:
29.0¢ Sentiment: Buy Disclosure: Held
