snowboundYou are asking some good questions,and questions which...

snowbound

You are asking some good questions,and questions which supply answers to why some of us are still around in AMX.....

some notes,briefly

1 At 1.0gpt au cut off you get 20,765,638 tonnes @ 1.9 gpt Indicated for 1,272,594 ounces and 21,870,064 tonnes @ 1.9 gpt Au for 1,326,235 ounces inferred for a total of 42,635,702 tonnes @ 1.9 gpt au for 2,598,983 ozs of gold.

2. What value you assign to these ounces, is in realistic terms a function of many factors which effectively convert the above ounces in ground to ounces in bars (real cash). Some simple numbers you suggest are really very simple, and the devil is in the detail, as usual. Significant detail comes from POG, strip ratios, hardness of ore, met of ore, grade, coherency of ore system, predictably and mappability of ore (grade control) and a lot more.

3. Despite the above, $850/oz is not a bad starting point, and servicing a debt depending on int rates and cap costs might be of the order of $65/ozs ($200m capital at 5%) assuming a 100% debt load...etc
So hence you get to about $925 per ounce...total cost (approx)

4. So you get a total cost $925 per ounce, and if you say POG at 2 years down track is $1800 per ounce (forget today's price LOL, could equally be $2000 per ounce and more depending on who you listen to, but lets do $1800). So you get a free cash flow of the order of $875 per ounce...hence at 150 k ounces pa you get a free cash flow of $130m pa.

5. So if you get a reserve of say 1.2 m ozs....short term, for an 8 year mine life, and use a 5% discount rate, then you end up with a payback of less than 2 years and a NPV of more than $800m. This does not take into effect exploration upside, and costs, and remember AMX has explored 5/150 (3.5%) of the mineralised crustal scale structure.

If you take an average of discount factors used in africa gold..lets say again around to be 8%, (see ni 43-101 on TSX-v), npv will drop to be about $750m....


So at $90m mkt cap, $30m in the bank, AMX does not seem a bad bet...and we assume gold is going to just hang in.

If you watch the movie West Memphis 3, you will understand how thoroughly "worked over" the US is, and how one would not believe the value of the governments IUO's....they are incredible, in all dimensions.

I'm on gold for sure...happy and relaxed in AMX.

Welcome!