While we're consolidating, good time to review where we're at TA-wise. I'll tell what I think, and would love to get other ideas or feedback on the merits of my ideas. Also want to share some back of the envelope numbers I've crunched regarding what to expect with the June PFS.
I've used updated market conditions, commodity pricing, any data they have formally released since the scoping study, and a sprinkle of creative licence with regards to loose statements made in live presentations by the company over the past 6 months. Some things are black and white verifiable data points, other things you have to run with and make your own interpretation; these are mine.
I think it's fair to say the project numbers are expected to be significantly boosted. But by how much? I personally am expecting the PFS to BLOW the SS out of the water! Here's why:
(Scoping Study - Sept 2023) Recap:
Gold Price Assumption: AUD$2,750/oz
Pre-tax NPV8: A$442 million
Pre-tax Free Cash Flow: A$740 million
Annual Production: ~100,000 oz for the first 7.4 years
All-in Sustaining Costs (AISC): A$1,648/oz
Payback Period: ~9 months
Capital Expenditure (CapEx): A$123 million
Gold Price: AUD$5,000/oz (current spot price = $5,200/oz) *AAR will likely go more conservative.
Indicated Resource Increase: 49%
Total Resource Base: 1.62 million ounces
AISC: Assumed to remain at A$2,142/oz (info from the company is that cost increases have been able to be kept fairly minimal.
CapEx: Assumed to remain at A$123 million
Updated PFS Economics (Potential):
Free Cash Flow: A$3.93 Billion
NPV8: A$2.35 Billion
IRR: 200% – 240%
Payback Period: ~5-6 months
That’s a 400%+ increase in cash flow.
NPV more than 5x higher than original.
At current gold prices, this thing would print cash if they can get it all the way to FID/Production.
With over 1.3Moz gold already in the mine plan and more exploration upside ahead, Mandilla is no longer a minnow story — it's a sleeping beast. Critical to the evolution of this story is that in the prior years I heard it was all about being a takeover target. They have changed the narrative on this now and whether realistically or not, they now believe they will go all the way without being taken out.
Technical Setup?
- Strong accumulation underway - 15 years
- Massive relative value vs peers
- OBV soaring, volume supporting.
- Clear uptrend, market structure bullish.
- Trend lines acting as support.
- Bouncing off fibs when it should.
- Bearish divergence turned into hidden bullish.
EW perspective matches the theory too: From 2015 lows, I see a 5-wave move that reached 23c in 2020 (Larger scale accumulation wave 1).
ABC correction to 786 (deep retracement commensurate with accumulation - this is the larger scale wave 2).
I believe now in larger scale wave 3 (smaller wave 1 and 2 done - setting up for smaller wave 3).
AAR could literally be the best value pre-production goldie/PFS-reveal play on the ASX right now and when it lands, it might just be the trigger to get the public participation really cranking.
Bigger the base, the bigger the explosion! This is setting up beautifully, TA into expected FA developments.
(20min delay)