Hi Plough, the company presentations clearly mention upside to their production from possible toll treating... the deal has not been finalised, so why would WGX include anything at this point, that is not smart business practice.
As for why WGX has not simply acquired the asset, perhaps they will, but... considering the short nature of the production profile (2 years max for the open pit), WGX may simply view it as an unnecessary use of capital, compared to spending $100m+ on drilling, which has already enabled them to discover an enlarged Bluebird complex with 7+ years (I see no reason why it could not double to 15 years... everything is open and they have only tested 10% of the trend). You seem to view WGX as not benefiting from any deal, but of course they will. Plus, a profitable neighour that drills the hell out of their tenements is a win/win for WGX, to then do further deals down the track. WGX has 3,200km2 of tenements (5% of the size of Tasmania), the company has already stated it has too much acreage and is looking to divest/deal to reduce and in turn target the best dirt. So...logically, a J/V deal like the one with OAU is a great starting point and... for me anyway, counter to what they are aiming to do over the medium term.
Sure... the numbers profit wise for Crown are excellent, and that is again, win/win if one is able to look past only the pros' of owning the asset 100% versus a tolling/ore purchase deal.
As for why they are so focused on Bluebird U/G.... because they aim to have 10+ years LOM for Bluebird... something it has not had, well since WGX purchased it anyway. WB and the team are aiming to make WGX a premier gold play in Western Australia, to do that, they need big, long life U/G mines, not, small open pits (though high grade ones are nice!).
@Joelstar - my guess is it was just a waylaid comment. WB is a met guy, so... I am very sure, if the Geo team thought it worth while, they would be gunning for it. But, happy to quiz him on it if I get the chance.
Consolidation can make sense, but... spreading yourself too thing can be a disadvantage too.
WGX Price at posting:
$2.89 Sentiment: Hold Disclosure: Held
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