The share price re-rate we are all waiting for will occur if / when MGX can provide a more detailed update on mine life at Koolan. Provided they can show a viable pathway to extend mine life materially beyond the current "3 years" (give or take), then I think a dramatic share price re-rate is on the cards.
Like you, I am optimistic that an extended mine life will be forthcoming for a variety of reasons:
1. That is by far the cheapest means to create shareholder value - they know the geology intimately and extending mine life is far cheaper than developing a new asset.
2. The resource is sitting there - they know there is substantial additional high grade available and its more about how they can safely / efficiently access it. More of a mining technical challenge which aligns with your reproduced quote from the last annual report: "Ore reserves maintained net of depletion, with the Mangrove and Acacia East satellite deposits at Koolan under evaluation. Additional potential exists in Koolan Main Pit deeper cuts which are not reflected in the ore reserve estimate."
3. They have invested heavily in Koolan in recent years with the upgraded mining camp, new trucks & shovels, the effective rebuild of the airport and more recently the crushing circuit upgrade - none of which suggests they are moving towards shutting this down from late 2026.
They are obviously working on this and the day they are ready to release a new Koolan extended life mine plan is the day this share price will fire up. Management and the Board implicitly understand this, and I am sure they are working hard to get this to a level of final decisioning as soon as possible in order to remove this layer of company uncertainty. The other things of new exploration drilling in company-owned leases, investment in promising juniors is interesting but all come with long lead times, risk and uncertainty.
Meanwhile we watch, wait and look at the accumulation of cash (which at $430m de-risks investing at the current share price / market cap of $530m).
MGX Price at posting:
43.8¢ Sentiment: Buy Disclosure: Held
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