manas: this goldie just gets better, page-53

crackpot good points but I am inclined to disagree on the early stage mining production costs. The capex for the processing plant will come from cash on balance sheet and will not in effect need to be repaid from gold production
Most of the initial stage resource production is very shallow or from surface with excellent grades you could dig some of it up with a JCB backhoe machine or indeed a shovel (lol) if you wanted.

I wouldn't be suprised to see a production cost of nearer $100 per ounce for the first stage production at Shambesai which will impact very positively on the initial cashflow.

In frontier markets such as KR insto investors and other professionals will buy a stock for well above average free cashflow or the promise of above average free cashflow.

The IRR of 201% at POG of $1000 gives precisely that. This more than offsets country risk (or 386% IRR at $1920).

There is every chance that the market will run ahead of itself on a bonanza resource upgrade - leverage there short term for free if you have the oppies. Even for those who only buy heads it is worth dropping a small percentage of the capital committed to MSR into the MSROs as leverage of 9 maybe 10 times is very hard to find in a quality story.

EB