Mr Macnab's latest drill result again hit gold and is 1 km deep! That is 300m deeper than the world's tallest building in UAE.
The latest drilling result confirms Macnab's belief that we are sitting on a major gold deposit at Crater Mountain.
I suppose if the share price lifted to 3-5c like it did in Q1 2011, this announcement would have been viewed as a success.
Try not to look at the share price performance to gauge the performance of the gold resource.
Gold Anomaly has already defined a 790k ounce gold resource, Macnab will build on this with each drill hole.
There are a few facts we need to focus on:
1. The Price of Gold will remain high, well above $1500/Oz in the medium and long term. The Bank of England will commence the printing of 250 Billion Pounds from February, to buy up British Govt Debt, which will then allow the govt to spend more to avert a serious deflation event which is already started in Europe. The US Federal Reserve is also expected to announce QE3 in either late January or early March expected to sit between $500-800Billion. Bank of Japan has already announced it will print money also. The last one to print money will be the ECB, Mario Draghi announced that he will do this if required, nee deflation in Europe, but no one bothered to state it in their news articles.
As countries continue to print money in such large amounts, confidence in fiat currency fails and everyone turns to gold bullion to protect their assets from inflation which usually occurs 18-36 months later.
2. As for how much cap ex is required to build a gold mine. Gold Anomaly have already built the roads, drilling and mining camps on Crater Mountain in 2009 and 2010, before the Gold Sniffer started drilling. Gold mining projects do not require the $3-5Billion cap ex that iron ore and coal projects require, because the volume or mass of ore that is shipped once purified is incredibly low compared to millions of tonnes of iron ore and coal that is shipped. 1 x 10kg Bullion bars are worth 321.51troy ounces x $1540/Oz = $495,000. If you produce 50,000 ounces of gold bullion per annum that equates to approximately 1555kg of gold. Or 150 10kg gold bars over a 12 month period. Very cheap to ship and sell. This volume of gold would sell for $77m revenue @ $1540/Oz/ Cash Cost would be around $750/Oz at these grades. A pretty good profit.
For an Iron ore or Coal miner to generate $77m in revenue, they would have to ship 550,000 tonnes of iron ore. This needs rail, ports etc etc.
We need a nice secure truck or two!
A crusher and screener, acid heap leacher, furnace and gold depository is all we need. All in all $20-40m is all we would need to produce 50,000 ounces per year.
3. The mine IMHO will operate in four phases or steps. Step 1. In the high grade gold mine, where the artisanal miners had an operating mine. This will pay for the initial cap ex. They may agree on a JV or may issue shares to generate the cash for this shallow gold mine.
Step 2 In mixing zone. Then as they dig that up Step 3 and Finally the Deep Seated Mineralisation Step 4!
4. The 1km drill hole confirms good gold deep in Crater Mountain.
5. Im not sure if anyone has already mentioned, this so please accept my appologies if they have but have a look at the wording by Macnab! We need to continually read between the wording in the announcements and presentations by these miners!
This is the most important sentence of the entire announcement!
The deep at the 1046m gold mineralisation results, which still good, IS ONLY THE APOPHYSIS OR ARM (OFFSHOOT) OF THE DEEP SEATED MINERALISATION!
Macnab believes this is just an offshoot, not the actual prized mineralisation!
6. Agreed, they will have to issue more share in Q12012 to pay for more drilling. Im estimating $4-5m worth. Which will upset share holders and some will sell off the shares. But I believe this will be a great time to accumulate more GOA shares!
Again we just need to give the gold sniffer the time to build up the gold resource over the next 12 to 18 months!
These are just my opinions DYOR!
Cheers Nectar
GOA Price at posting:
2.2¢ Sentiment: LT Buy Disclosure: Held
