AGM Review
Lithium questions
Q: In reading about the macro lithium environment, I’ve come to the understanding that the first producers to hit the market will be the true winners in this race.
As management, are there any further steps to fast track any of these steps we have yet to go through to get us mining quicker?
Then I gave the example of going with 4 drill rigs instead of 2.
A (KJ): Basically he said the current 2 rigs are running full pace and that any quicker could increase the risk of operations being run unsafely. He also stated that we would beat most to market due to the speed in which Mali is able to push through the appropriate permits. They threw up a most recent example of a Malian gold company who went from discovery to production in the space of 1 year.
Q: A distinguished gentleman from down the back of the room then re-tested this question asking them if they had thought of getting multiple drill rigs on site to speed up the process?
A (KJ): This time around they said that additional drill rigs weren’t considered but they could be. It was left there and this will probably go nowhere.
Q: Someone asked about the challenges we will have going forward (logistics, mining, etc).
A (KJ): KJ was brief on this note and said that transportation/logistics and all this kinda stuff would be answered in the SS and Pre-feasibility report.
Q: Will we be taken over, will this be a JV, will we sell out???
A (WW&KJ): The language was critical here… “This lithium will be mined”. Very different from “We will mine this lithium”.
So in the end, the deposit is a no brainer, but whomever mines it is not set in stone as yet.
I did get the feeling that they would love to be involved with this project going forward (at the very least).
Q: I raised the question of their approach on bringing on new talent to help get this project going.
A (WW): He basically said that they currently have 2 full time staff and several part timers which he named.
He basically told me; no sheet buddy, you think we’re stupid. Lol
I was hoping to get a little more on this like ohhh yeah, we’re speaking to some former Malian miners at the moment OR we have a guy who used to work for Greenbushes who has defected; but I got nothing.
I’d expect newcomers to be introduced from as early as Monday, onwards.
Q: Someone asked what the deal with the stagnant share price was?
A: This question was put back to the shareholder who asked… “Why do you think its stagnating?”
After some bickering, I stuck my nose into this one and suggested it might be a lack of market awareness. I then threw out the example of hiding the “early stage negotiations with a third party relating to a potential acquisition or interest” in the 3B announcement.
They sort of brush this off as a non-event suggesting they are required to tell us under listing rules.
Either way, something is going on here and I’m not sure what it is truly about; takeover, buyout, JV or a non-event.
Q: What would be the Malian Gov’s impact on Goulamina?
A (KJ): Basically they take at least 10%. Then they have an option to buy in another 10%. Total being 20%.
However, we can negotiate tax concessions and other stuff which might bring this number to below 20%.
KJ expressed his interest in having the Malian Govt involved in the project as they have your back… so to speak.
I definitely think this is a good thing.
Further info on our most recent drill campaign
-We operating our current 2 drill rigs on a 24 hour basis.
-75% of the drilling is RC, 25% is DD.
-Every 50 m north of the West Zone which returns positive hits will equate to about 1mt of extra resource.
So when we get the drill plan (eventually) and you see maybe 3 rows up of extra holes from what we have now, then that’s an extra 3mt. I’m not sure if this is sqr meters though but if it is and we go 3 high and 2 wide it could be 6mt more.
-The environmental work has already started.
-5 or 6 holes will be punched into the new Target Zone and the rest of the drilling will work on converting our inferred resource into being an indicated resource.
-I’ve noted in the past that when we first started this campaign that the Western Zone was barely mentioned and written off as small fries to our Big Mac meal… Clearly the small fries have out-performed.
I’ve also noted that the Target Zone has also been an even smaller packet of fries and that the Target itself could definitely have potential to out-perform like the Western did to the Main.
KJ basically said the same thing which got me excited.
I’ll revisit this Target Zone a bit later as well!
-First assays due in 6 weeks.
-Whilst no new target has been given, the chart on pg 15 has an arrow which points to us being at about 40mt’s
Gold questions
Q: How/when would you expect RG to confirm to us weather they wish to exercise the gold deal?
A: Nothing set in stone. We have an open and solid relationship with RG.
They have also already began to drill these sites out now.
Also, upon acceptance of this deal it would take RG less than 1 year to work through the dirt we’ve given them.
Q: What is our Plan B should RG not wish to proceed with this deal?
A: I can’t remember the immediate answer to but I know the conversation drifted and we got to a point where I heard the words “we would buy Morila”, and then I woke up.
Feel free to fill in the gaps to this if anyone can remember (Michael).
I’ll revisit this point later as well.
Conclusion
Being my first AGM I thought it was a good one. I didn’t ask as many questions as I should have, but it definitely added value for me.
Thanks to the BGS crew, not only for the AGM but for hanging around and engaging shareholders immediately after the meeting AND at the pub later on.
Those discussions will remain on the field as far as I’m concerned. Not that any inappropriate information was given, but I just think if people want to engage management on that kind of level they should put the effort into being there themselves.
Also, can’t wait for next year’s AGM. Clearly we know who is in charge of organising the after party!
AGM Dreams
Three parallel pigment zones, then joining at the bottom
Earlier I touched on the Target Zone and how its potential to significantly surprise is definitely there. Basically I think a picture of what I’m dreaming about would explain it much better than words:
View attachment 354062
Also this might happen as well:
View attachment 354065
Nuff said…
Thoughts on the gold
Whilst I was not very happy with this gold deal at face value, the genius of it has just hit home with my feeble mind.
I think the math behind it doesn’t scrub up however the long term strategic play was genius! I do the “back of the envelope” calcs and it looks like we are receiving about half of what we could be getting if we took the 35% deal. Some agree with me on this, some don’t… either way.
We simply threw them 11 klms of our 700 klm area that they can process for a year. If we threw then another 11 this could see us receive cash flows until mid-2018. By this time we are hopefully flowing income from the Lithium.
Basically from here we do to RG what they were trying to do to us for the last 3 years… starve them out.
We stop selling them the Ore from our Massigui area and let the mine run dry. When they are done with it and are about to convert it into a chicken farm, we purchase it off them for chicken feed using our lithium funds and start pumping the rest of the gold through there ourselves.
I’ll finish here with a quote, “we would by Morila”.
Nuff said…
What to do with Goulamina
Basically I think a selloff of about 49%, 51% or 80% stake could be on the cards.
Seeing as we are an exploration company, we wouldn’t want to do the mining of this deposit as it would best be left with those with actual mining experience. If we were to sell off 80% of the deposit we could push through an 80% dividend to shareholders and retain 20% as an ongoing stake in the project (revenue stream).
This stream would flow for the next 15 years seeing KJ with enough funds to go searching for more dirt with goodies in it; either in the rest of the Bougouni Project or back to our Massigui Project.
Let’s say we prove Goulamin to be worth $300m and we net a once off amount of $240m (80%), if this was distributed to shareholders it would be about a $1.30 per share once off dividend and we still have the rest of our Projects intact.
Nuff said…
