In a general sense I am confident that the Mgmt of DDD are earnest and determined to create a high value producer.
DDD will never be a tier 1 producer. Looking at the definitions (https://minexconsulting.com/definitions/tiers/) DDD does not neatly fit into these catergories as I would contend that DDD's objective is to develop into a low production, medium life mine that at current POG is very profitable. If POG does rise, the DDD operation will become highly profitable. POG is critical as an increase in POG is, in defacto, a rise in resource. Most importantly its an increase without any costs. To put this into perspective, gross production forecast, per annum, is more than twice the current MC. Increase in POG may see gross production increase to three times current MC and beyond. Moreover, the value that the C.N. spin off will add to the value of DDD. I dont have any idea of how much. I would say that an intial MC can be based on SOI and issue price. DDD will hold 30% (?)
I have been reading the intial consultants report found here
I would ask others to read this report, even in part, and contribute back here on what they have read. There is a plethora of considered information and opinion which is genuinely worth reading.
and again I recommend anyone interested in DDD read this report. The report content contains great historical information and more importantly is very upbeat that it is very likely the the region contains signficant resources.
The consultant report (Report) identifies 7 significant mine locations and addtional the Report (page2) identifies 20 historic mine sites within DDD tenements. The Report notes that most or nealry all mining was to a maximum depth of 200-300 metres. We know that the depth was limited by technology and not lack of mineralisation The Report contends that mineralisation is open at depth.
For clarification Challenger and challenger extended is the location of the mine locaton called Old HIll. This was the location of the first reef discovery. This location is the first proposed area to be mined (in addition to the mullock heaps). Challenger and challenger extended has had some step out drilling and looking at page 4 of the Report, the graphic shows the results of this drilling. Some of the results are very high. This location, I estimate is 450m by 300m. From my understanding this is the location of a proposed open cut mine. Assuming a depth of 400 M then the cubic volume with a medium grade is a sizeable resource just for this location. I am not an expert on this, just trying to get an understanding.
If we move to the other significant locations and refer to the Report, it can be read that the consultant is justifiably confident that a larger and economic resource is located with the DDD tenements.
Historic average grades are very impressive, again, it is very important to note the the considred opinion in the Report is that the resource remians open at depth and that the contetnion that other shallow reefs remain undiscovered. Veins that yielded 30-50 g/t were considered uneconomical to mine. Recall that that mining was undertaken by manual labour and processing the ore at one of the batteries was relatively expensive - to dig up the ore, transport it to the battery and then pay the toll processing price.
Recall that it is very reasonable to assume that Adelong total production was much higher than the reported 800 thousand ounces. On commentator estimates possibly 50% higher. Thats up to 1.2 M/ozs !!!!!
A quick look at historical grades
Old Mine (Challenger) - 87 g/t
Gibraltar - 34 g/t
Victoria Hill - 56 g/t with the Williams mine producing 150 g/t
Currajong - in excess of 50g/t
Caledonian 65 g/t
Donket Hill - grades up to 150 g?t
Camp Reef - 90 g/t
The Report notes that little histroical data exists for many of the mine sites.
Only further drilling will prove the resource.
What is certain is that DDD does have an economical JORC defined resource, a spin off in the form of C.N. a very low MC, loctaed in a location that does not encumber AISC with FIFIO, costs associated with remoteness etc.
Is there another junior on the ASX that has all these factors in its favour?
If there is, please tell me.
DDD Price at posting:
0.5¢ Sentiment: Buy Disclosure: Held
(20min delay)