10 weeks to October, page-40

Evening All,

Some great work done on the feasibility numbers & really exciting to see other people are working on the same sort of numbers as I have run myself.

I'm loving the price estimates that are beyond $1. I've previously said, I'm easily expecting $0.40-0.60 in the next 6 mths as a realistic price, but over $1 would be serious retirement time.

I tend to agree that the op costs are likely to sit higher than forecast by some - at least around AUS$8m per annum at least for a while - my rationale is from last quarterly the forecast operating costs for this quarter:
$1.334m exploration & development
$0.140m staff
$0.273m admin & corp costs
$1.747m Total

The only caveat here is how much of this exploration & development is captured above as payment to artisinals - I'm guessing this is almost a straight 50/50 split b/w mining and artisinal costs.

But $8-12m would be a fair guess IMO if we're to achieve 2 auctions per year.

I'm looking forward to seeing where we got to in this quarterly, which is due in the next week and a bit.

Two other points I wanted to highlight -
1. Artisinals recovery is a fantastic number, just think about 76k carats at USD$200/ct - this would exceed our entire operational costs. ALONE. So, then, we get whatever our mine generates for free.
This assumes only 76k per annum - we'll see 150k+ carats this year alone - so allows at least 50% headroom in the $ per carat.

2. Dollar values per carat leverage us so far it's not funny.
Let's say we achieve only US$60/ct for 200k ct at the auction. We still generate AUD$16m gross revenue. That's stellar in itself. This would hold the company in great stead until the next auction. And I can't even see this happening given the Artinisal stock is viewed prior to purchase & the mined stock is likely 28% premium/60% high as with GEM's secondary deposit.
If it's USD$100; we're pulling in AUD$25m;
and beyond USD$100/ct, the return is so good, its hard not to get excited when you think about.

But I want to be clear, don't underestimate $60/ct being an exceptional result in itself and even this will massively drive the price upwards.

3. Whenever I am reminded on the research report detailing the graphite value, I really get a good laugh.
If the graphite value is $0.03 per share (and I believe it should be higher); this means the rubies are only valued $0.025 per share at the moment - consider, that's 45% of our current market cap = ~$14m.
The first Ruby auction will generate more than this current valuation figure. Excluding any future revenue/recoveries.
Think on that.

Sleep well, the only thing I'm losing sleep over is how can I get more cash to invest at this price, because it wont last for long IMO.

Cheers
Capt Amazing