I think this new JV deal has some real positives for TAM, not only does it focus both parties on production but it has allowed TAM to double its production interest from 25% to 50% for a rough guesstimate of around $25m being their share of plant refurbishment, some focused resource drilling (probably around Goldrush and Jim's) plus some additional admin costs.
In 2015 NST's Bill Beaument stated he was confident that the CTP would be a 'low-cost 150ozpa producer'. Given the unique advantage of having existing mining approvals, well defined resources as well as extensive infrastructure it should be realistic to see mining to see mining within say 18 months. At current gold prices it seems reasonable to expect TAM would have a margin over their AISC of between $800-$900 or a cash flow of around $65m with no tax to pay for many years!
The current market capitalisation of $100m looks cheap to me...Who knows, TAM could even be paying dividends within a couple of years given their strong cash and tax position.
DYOR
TAM Price at posting:
8.5¢ Sentiment: Buy Disclosure: Held
