LNY, LANEWAY RESOURCES
Minerals/ Metals - Gold,
CoalCash - $1.83 Mil Owed - $1.8mill Unused financing facility -$3.5m
Shares on issue 3.75 Billion!!!
Market Cap $15m
Gold -
They are currently looking to cut back a section of their historical production pit in order to do some drilling to find some deeper mineralisation of higher grade gold. After these results they will then update pit designs and work out tolling agreements(Processing their ore off site on someone else gold plant)
Risks involved here as shipping pay dirt can be expensive depending on where the plant is. After this proposed campaign they are looking to invest the money made to identify broader zones of mineralisation at agate creek.
They believe they have about 37,500 ounces of gold to mine.Looking over their historicals, they produced 16,000 ounces of gold, after tolling and other agreements they received 5,242 ounces or 32.8% there about of the final pour. If we use these same metrics on the 37,500, they should receive about 12,136 ounces, use $2500 per ounce, they should make $30,340,000. This is inference based on how much actual gold is there, if they mine it etc.
Coal - 14.8 million tonne of coking coal, they are trying to obtain an ML "Mining Licence" over this. I am not a fan of coal, prices are very depressed atm and I don't fundamentally believe we will see a big price rise over the next few years, prices over the next 5 years are predicted to be $60-$70 per tonne. Average Australian mining costs I believe is around the $45 dollar per tonne mark, at today's levels this is not viable. Then you have to factor in the risk and costs associated with starting the mine and the effect this will have on shareholders. IMO they would not get financing for this project so there will be more dilution, so to me it seems like a waste of time. This is also a tiny deposit in the scheme of things.
IMO There are a few red flags,
Firstly you have to dig deep to find out information as its rather buried and all over the place, what it tells me is their commercial team isn't the best.
Secondly they are looking to invest in coal, put the mining lease over the tenement when the economics don't really stack up, I would be asking my self why are they doing this? Again, sort of makes me question their commercial team.
Thirdly they have way too many shares on issue, meaning this will trade between a range, and will not break that range and would require a monsterous announcement, a huge quarter or change to break it.
Fourthly, I honestly believe their valuation is high, 15m market cap, $1.8mil in cash, They are owed $1.8million which has not been paid yet so I wouldn't be considering this safe in today's market. They have inferred value of 30m in the ground which has not been mined or realised yet.
They don't really have enough ore reserve to justify the market cap. For me I wouldn't buy it as I don't believe the upside is there, IMO the best you could get is 0.008c, or 100% of todays price, if or when they mine the 37,500 ounces they infer is in the ground.
I believe there are much better options around in today's depressed market. Had they been consistently mining then this would possibly be a buy in my opinion however it seems they ran out of high grade feed, now they are searching for more.
DYOR this is not financial advice, completely independent summary, for your information only
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