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Ann: Highest Grade Intercepts Returned From Drilling-CDV.AX, page-66

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nordesmic

4,323 Posts.

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17/08/16

08:59

Post #: 18535060
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Originally posted by flyboy77 ↑

Sounds like a fair bit of chest beating there Thunder. Been watching the Olympics?

Saying it's pricey? Well first thing to clarify is the ounces - and potential ounces.

You say 2m oz, i say closer to 3m oz without any new land buys (which I would think have been locked down for some time now). Is there a chance of 5m oz in the immediate environs (I think the market is starting to believe so)? I guess the geophysics will help there?

Have you factored in the $26m cash in the kitty in determining your EV and the $17m they'll get from the oppy exercise?

Low grade for an open pit eh? 1.5g/t to 1.6 g/t? Well, we must be operating in different corporate spaces...... not 'high' grade but very decent for o/pit - and look at the costs at Nkran to pre strip and strip....makes their 2.3g/t (from memory) look like 1.0 g/t. A bit patchy - show me a deposit with 1000m strike that doesn't vary in such a manner? i would have though the mineralisation at Namdini is very consistent.

How many NSRs have you seen at Namdini Thunder? Contrast to Burey's recent results eh?

Granted the economics (leaving metallurgy) aside come down to economies of scale but if AISC costs can be south of USD750/oz, well your 90/oz is a doddle in the park (assuming the gold price holds or heads north).

Capital cost - let's say USD 400m for a 4.5mtpa plant. 90% recoveries. 195k oz per annum.

Say a 10 year mine life - for amortisation. So usd 40m a year or AUD53m/195k oz = $272 AUD an ounce (USd205/oz). Opex, well others have already had a crack st those numbers.....

Granted, no factoring for sustaining capital.

i think it was GANZ who compared the other existing West African gold mines of similar scale - i recall he was hopeful of AISC circa 700.

And quite frankly, deals done in recent years, even in early 2016, are a world apart from the multiples we'll see if the gold bull gets a hold - which I think it will. The so called experts were calling for low 1000s, some sub 1000 gold in late 2015!

On a 3m oz deposit, for the sake of the argument, given the likely numbers at Namdini, I'd say a multiple of USD200/oz is FAR more appropriate....but even today, a multiple of 100 is not unwarranted.

So, I'm suggesting a USD600m target at some point - you do the maths.....45c is dirt cheap. Again, dependent on one's expectations on the gold price. Personally, i think we'll see USD1500+ by year's end.

That said, AK doesn't want to sell, so the argument is all likely moot.

Expand

Flyboy I did the comparison with other similar African mines. I think Namdini can be below US$750/oz AISC. Worth taking a look at the Orecorp scoping study that was released last week as well (shares were up 35% when it was announced).

http://www.orecorp.com.au/upload/do.../160810-ScopingStudyandMREUpgradeNyanzaga.pdf

They are producing from an open pit for the first three years with a strip ratio of 2.5:1 and grade of ~1.7g/t. Open pit cost is about US$800/oz. Pre-strip cost is US$14M.

They have a 4mtpa processing plant and projected upfront cost is US$248M (including a $43M contingency).

I think Namdini is probably superior in terms of pit geometry and strip ratio and quite possibly in recoveries too (ORR only 85% recovery).

Last edited by nordesmic: 17/08/16

CDV Price at posting: 46.0¢ Sentiment: Buy Disclosure: Held
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