Cheapest Gold play per ounce ?, page-21

There is a lot of activity and deals starting to appear on the West African Gold front

OREZONE Closes C$5M Investment to Lay the Groundwork of Bomboré Future Mine (Burkina – Emine) – Ouagadougou April 18, 2016: Orezone on March 30, 2016 announced that it has closed a C$5M investment into the Company by way of a non-brokered private placement through the issuance of 10,000,000 common shares at a price of C$0.50 per common share.

and...

True Gold Reminds Shareholders to Vote​

VANCOUVER, B.C. – True Gold Mining Inc. (TSX-V: TGM) (“True Gold” or the “Company”) is pleased to announce that Institutional Shareholder Services (“ISS”) and Glass Lewis & Co. (“Glass Lewis”) have both recommended that True Gold shareholders vote FOR the Plan of Arrangement (the “Arrangement”) through which Endeavour Mining Corporation (“Endeavour”) will acquire all of the issued and outstanding common shares of the Company (the “Transaction”).
ISS and Glass Lewis are two leading independent proxy advisory firms that provide voting recommendations to institutional investors. Their endorsement of the resolutions highlights the strategic rationale and financial considerations of the Transaction to True Gold shareholders.

Seems to be an interesting acq price, .... and grade is not king here

The Karma mine offers a compelling production profile and strong potential for growth. The Feasibility Study, revised in December 2014, supports a technically simple, open-pit heap leach operation that offers low capital and operating costs, rapid payback and strong financial performance at US$1,250/oz gold.
Highlights from the Feasibility Study include:

• Gold price: Base case economic evaluation: US$1,250/oz Au
• Probable Mineral Reserves: 33.2 Mt @ 0.89 g/t containing 949,000 oz Au
• Production: 97,000 oz Au/year (average) over an 8.5-year mine life
• NPV @ 5% (after tax): US$199 million
• IRR (after tax): 46.3%
• Payback (after tax): 1.3 years

The economic highlights represent True Gold’s effective 90% interest in the Karma Project, after allowing for Burkina Faso’s 10% carried interest and all government and contractual royalties.
The Feasibility Study confirms that the Karma mine is scalable. While the Feasibility Study is based on slightly less than one million ounces of reserves, True Gold’s exploration success in discoveries demonstrated the potential to add open-pit leachable material at Karma for potential mine life extensions or potential incremental throughput. The Feasibility Study does not take into account the North Kao Preliminary Economic Assessment, or exploration since 2013.
Feasibility Study results show that Karma has the potential to remain strongly profitable at lower gold prices as well as at increased prices for key consumables.
Gold price sensitivity (after-tax US$M)

	Column 1	Column 2	Column 3	Column 4	Column 5	Column 6
0	US$/oz	1,063	1,125	1,2501	1,375	1,438
1	NPV	111.2	137.5	198.8	254.6	279.4
2	IRR (%)	30.1	35.3	46.3	55.0	59.1

¹Base case
Based on the Feasibility Study results, True Gold is confident of Karma's long-term success and utilizes an owner-operator development model. An owner-operator scenario that includes purchased equipment imposes slightly higher up-front capital expenditures compared to contract mining but offers lower long-term operating costs, greater operational flexibility and healthier LOM cash flow.
Camp costs are reduced for Karma relative to other projects because most administrative facilities will be in the city of Ouahigouya, which is 23 kilometres from the project, and employees will travel to and from home every day rather than living in a remote camp on site.
True Gold used the Feasibility Study results to source financing for the construction of the Karma mine. The short payback period and strong early cash flow made it economically attractive and appealing to lenders. On August 11, 2014 True Gold entered into a stream agreement (the “Agreement”) from Franco-Nevada and Sandstorm Gold (currently split 75% and 25%). Based on the current Feasibility Study, the Agreement is anticipated to fully fund the construction of the Karma Project in Burkina Faso, West Africa. The US$100M Agreement requires True Gold to purchase and deliver 100,000 ounces of gold over five years, starting March 31, 2016, and thereafter 6.5% of equivalent production at Karma. True Gold will receive 20% of the spot price of gold for each ounce delivered. In addition, True Gold holds the option to increasing funding by up to US$20-million (“Increase Option”). If the Increase Option is exercised in full, True Gold would deliver an additional 30,000 ounces of gold on a fixed payment schedule. The Franco-Nevada/Sandstorm funding package demonstrated the strongest solution in terms of cost of capital, operational flexibility, alignment of business interests and long-term partnership benefits, which the Company believes will provide maximum benefits to our shareholders.
The Karma mine is being constructed over a period of 18 months with pre-stripping beginning 12 months prior to the first gold pour, which is anticipated in Q1, 2016. The recent financing up to US$120-million from Franco-Nevada and Sandstorm commits funds to construct Karma without the need for additional equity. The mine is anticipated to produce an average of 97,000 ounces of gold over 8.5 years, at direct cash operating costs of US$550 an ounce.
A heap leach pad will process leachable material from five pits. The two pits with the highest-grade ore will be mined first, providing True Gold with strong cash flow at production launch.
The Karma mine will provide economic benefits in an area of Burkina Faso that has seen little foreign investment.
Karma Project Attributes

• High grade for open-pit heap leach project
• Soft, shallow and free digging mineralization (minimal drill and blast)
• Low power requirements
• Excellent existing infrastructure (water, roads, labour, accommodation)
• Strong metallurgical results: Gold recoveries from oxide material for all deposits were rapid and substantially complete within 10 days, with heap leach recoveries averaging 87.2% LOM
• Opportunity to add open-pittable leachable material close to proposed central processing facility
• Fresh water reservoir ("barrage") provides sufficient water for mine construction and operational needs, as well as providing a year-round water source for local communities.

So might be some legs in GRY...the resource with high grade starter does look good, and if the high grade continues at depth...

Has been some interesting work in the high grade dilution method of mining.

https://espace.library.uq.edu.au/view/UQ:233236/Stewart002.pdf

GRY at market Cap of $44m appears cheap?