fundamentally oversold

Mintails market capitalisation is currently $17M

Lets look at what's been happening for Mintails in the last 6 months or so... (highlights and opinion summarised from company ASX announcements. Disclaimer: I hold)

Gold Processing Agreement with West Wits Mining (27/11/09)

• Agreement signed by WWI to purchase (from Mintails) plant and equipment and secure access to use the North Sand mill site, deposition facilities, servitudes and connections. The payment for these assets and use of infrastructure is ZAR37,500,000 (~A$5.87m) over 3 years.

AGM Presentation (30/11/09)

• Operating costs decreasing; residue decreasing; a balance (sweet spot) between recovery vs tonnage throughput being achieved; gold price and FX rates on the improve.

INVESTOR PRESENTATION (21/12/09)

• Resources : JORC Compliant/Announced
  
  
  
  • 560k Oz Gold 'indicated' @ Soweto
  
  
  • 280k Oz Gold 'indicated' @ Randfontein
  
  
  • 5.0M lbs Uranium 'indicated' @ Soweto
  
  
  • 5.1M lbs Uranium 'indicated' @ Randfontein
  
  
  
  


• Production:
  
  
  
  • Mogale Gold 1 producing 630Kgs gold per annum (designed to produce 670Kg per annum)
  
  
  • Mogale Gold 2 coming online
  
  
  • Mintails Gold 3 in design stage
  
  
  • Resource base projected to be depleted in July 2029
  
  
  • Potential Production of Gold 1,2,3 (Initial Years)
    
    
    
    • Gold 1 - 20k Oz per annum
    
    
    • Gold 2 - 21k Oz per annum
    
    
    • Gold 3 - 27k Oz per annum
    
    
    • Total 68K OZ per annum gold production potential once Gold 3 online.
      
      * At $1500 per Oz currently that is $102M gross income per annum
      
      
    
    
    
    
  
  
  
  

Sale of ERGO Mines Joint Venture Company (22/01/10)

• Mintails entered into an agreement with DRDGold to sell its 50% equity interest in Ergo Mining for approx AUD12.6mil consisting of approx 9M cash and balance made up by transfer of DRDs 50% equity interest in the Witfontein Deposition Project to give Mintails sole ownership of this project.


• Mintails believes that the Witfontein Deposition Project will become a key asset in unlocking growth possibilities for Mintails on the West Rand.
  
  * Tailings services business opportunity

Quarterly Report For The Period Ended 31 December 2009 (29/01/10)

• Shareholders support final leg of AUD14.985m Capital Raising @ 4.5c


• Mogale Gold 2 commissioning stage


• Mogale Gold 1 makes a cash contribution for the quarter


• Mogale electrical upgrade for Gold 1 and Gold 2 increasing plant availability.


• Additional operations being undertaken to generate additional income (including waste rock mining, spillage clean-up of the environment (with associated gold production) and the sale of redundant assets).


• Total Resource Inventory 3M Oz Gold (Randfontein + Soweto), drilling and sampling continuing.

Mogale Gold 2 - First gold pour (12/02/10)

• Strategy to maximize gold production to gain increased momentum once Gold 2 fully commissioned.


• Mogale Gold 2 will treat up to 350,000 tonnes of tailings for gold extraction per calendar month increasing current capacity from 150 000 tonnes per month from Gold 1 to a combined 500 000 tonnes.


• Will enable Mintails to build up cash reserves


• Will position Mintails for strategic growth by centralizing activities on the West Rand.


• Growth possibilities renewed focus in anticipation of Mintails SA regaining sole ownership of the Witfontein Tailings Deposition Facility on the completion of the recently
  announced transaction involving the disposal of Mintails interest in Ergo Mining.


• Pursuing consolidation possibilities by establishing a tailings deposition facility capable of serving the regional tailings closure requirements of the expanded West Rand area.
  
  * New 'services' business opportunity in focus

JORC Update (15/03/2010)

• Gold Resource of 316 million tonnes, with a gold content of 3.1 million ounces gold.


• Uranium Resource of 273.5 million tonnes with 25.14 million pounds of uranium.

Mintails to dual list on ASX/JSE (15/03/10)

• 3rd quarter 2010


• Management believes the JSE listing will expose the company to a wider retail investment base where the familiarity with the asset class and its geographical location of its reserves, as well as the historical importance of the original mines would provide a sound base to extend shareholder support.


• 3rd quarter shareholder road show to support the JSE listing


• Similar shareholder feedback to Australian and UK shareholder base by the end of the year


• Gold 3 in pre-feasibility


• Current focus of cash flow goes to a) further verifying resource base b) Gold 3 construction (post pre-feasibility success)

Half Yearly Report (16/03/10)

• Net Tangible Asset 13.40c per Security as at 31 December 2009


• Company is evaluating possibilities for expansion of gold production capacity (Mogale Gold 3). See the proceeds from sale of Ergo Mining (~$9M) will contribute to funding options for this.


• Acquired remainder of the interests in Skeat Gold Mining ('SGM')


• Raised ~$15M and spent on Gold 2 construction


• The Witfontein Tailings Deposition Facility pending regulatory approval

Mintails to Process West Wits Emerald Ore at Mogale Gold Plant (30/03/10)

• Mintails to process ore from Emerald Gold Project at the nearby Mogale Gold Plant


• Production planned for 59,000 ounces over three years with expected production cost of USD650 to USD700 per ounce.


• Exploration being undertaken to expand this initial planned output
  
  * Additional 73,000 Oz close by recently announced by WWI


• Each party will hold a 50% interest in the net proceeds from processing the ore
  
  * For Mintails at current prices that's 59000 Oz * $640 per oz after costs (usd$700 oz) * 50% = $18M for Mintails over 3 years


• Agreement enables West Wits to outsource all processing requirements for the Emerald Gold Project


• Plant reconfiguration expected to be completed before October 2010

Competition Commission approval obtained for the sale of ERGO Mines Joint Venture Company (16/04/10)

• Recently obtained Competition Commission approval that ensures the completion of the Ergo transaction.


• Company focus continuing on cash generation from gold production on the West Rand

Quarterly Report for the Period Ended 31 March 2010 (27/04/10)

• Mogale Gold Two was successfully commissioned


• Mintails enters into binding Heads of Agreement with West Wits Mining Limited for the processing of the latter Companys ore at Mogale Gold.


• Alliance between Mintails and the South African government established to address Acid Mine Drainage (AMD) on the West Rand. Mintails SA contracted by government to use the companys current infrastructure to pump the necessary volumes to control the overflow of AMD water.


• Drilling continues to advance the Resource Statement from the JORC Inferred category to the JORC Indicated and Measured categories.


• Approval received from the Department of Water Affairs to deposit in the South Pit.


• Waste rock sales and environmental clean-up operations continue to generate additional income for the Company.


• Post quarter end Competition Commission approval was obtained for the disposal of Mintails 50% equity interest in Ergo Mining (Pty) Ltd.

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Current market cap of $17M justified?

 

Disclaimer: summarised info from Mintails ASX announcements and my opinion / interpretation of announcements only. Not meant to be taken as financial advice.