Ann: Maiden Reserve at Bulletin to drive step-change, page-65

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The Mechanic

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25/02/24

15:28

Post #: 72583990
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Originally posted by Dazedandconfused: ↑

Hi Aqil

I find I agree with the things you post. To extrapolate ...

CAI's core problem is the discrepancy of grade for the Klondyke deposit from the projected number in the DFS and the realised grade.... 1.2g/t (±15%) and the actual 0.8g/t. On top were the problems of staffing during Covid and the silly mistake with insufficient water. It is no wonder the SP tanked.

The HAO JV was the first bit of good fortune to come CAI's way. Open pit grades above 1.5g/t are not common. However, it is an underestimation of management to think they were unaware of them. The whole point of CAI was the consolidation of disparate small deposits into something which could be monetised.

The Nullagine purchase, if it had been conducted under better circumstances, would have been hailed as the windfall that it is. For $250k CAI almost doubled in size overnight. (Some people are concerned about the $45M remediation down the track.... another way to look at things is for $50M CAI picked up 1.2M ozs of resource for $42 an ozs with a fully operational mill thrown in...).

The capex for Bulletin is $17M. The announcement states that the pit can be opened in stages so that capex can be spread over time. If people care to read through some of the drill results and study the position of those intercepts it is obvious some very high grade ore is on the Western end of the proposed pit very near surface (17m @ 12.7g/t Au from 37m 23BTRD005) . Bulletin can, in part, be self funding.

Lastly, there is some recency bias in sentiment towards CAI. The financial position is not set in stone. Should the high grade Blue Bar deposit + an improved head grade from Klondyke prove to be true the SP is going to reflect that. If the SP gets above 30¢ the options are in the money and will be exercised. From memory there are 90M options which would bring in $27M.

CAI, seen in a positive light, has the clear growth path that management claims.

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There are 60 million options, if converted will add $18 million to the cash reserves.

CAI Price at posting: 15.0¢ Sentiment: Buy Disclosure: Held
8 Upvote

0 Great analysis

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Ann: Maiden Reserve at Bulletin to drive step-change, page-65

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