Hi Speculator,
This is one of the best posts on this board in quite some time . Reasoned and thoughtful words. I am a long term holder from the 5-10 cent days. I am getting a little tired of coming to this board of late and always encountering idiots throwing out *** arguments , like the clown upthread who said "the market was expecting 10moz or 20moz or 10moz @ 3-4gt". No sensible holder except a few over eager posters on this thread ( one of which I note indicated he sold out yesterday, which I am glad about as I found his constant whining annoying too) have ever suggested that and to say the "market" was expecting this is just total bullshit. If that was the case we would have got sold down to well under $1 with this announcement yesterday but that didn't happen. Then there was the other clown yesterday with geo in his name suggesting we won't get funding for this mine and it will be a non starter. Yer dickhead , how many 6.8 M Oz resources ( not even counting the other 2.2 M nearby) are out there in the world undeveloped and moreover are likely to be generating $1,000 plus margins as well , and with debt funding probably near the cheapest its been in the last 30 years ? Not get funding my ass. I don't mind negative posts but back it up with facts not just throw away opinions that don't have much substance to them. Posts like this are just embarrassing to those that write them. Anyway enough of the idiots on this board.
On the whole I thought the MRE was a good result but l was hoping for a bit more in the M&I category. However that should come with more infill drilling and this is testament to the strictness of our JORC standard ( which is actually a good thing) . I think there is a clear argument that the market rewards Ozs discovered at a diminishing rate beyond some threshold. We are now at a point where I think even if we found another 3-4 M Ozs , which one could argue is probably a fait accompli just through more along strike drilling in the greater hemi area and more infill drilling , the market would say, ok ........, but what are you actually doing with all these Ozs ? It's a fair question from a valuation perspective and it goes to the heart of the question, are you an explorer or a miner ? Hence until there is some real certainty around this, it won't value newly found Ozs as highly as the ones we have now got in the bag. For mine this is why the re-focus to developing a sensible mining pathway (ie a bankable feasibility study) is now vital. What will be the likely Asic from this open pit operation ? It's a key question that needs answering. I am guessing well under $ 1,000 AUD per Oz. We are a tier 1 jurisdiction , not far from port headland, plus we have a shallow resource, and with a gold price north of $1,800 USD per Oz, there is a credible pathway here to an operational mine that could be throwing out $ 1,000 plus cash margins, but we need to demonstrate that just as much as we have demonstrated now the Ozs are there. Once you demonstrate that in a Tier 1 jurisdiction , debt funders will be lining up to help fund you, not get funding my ass......
The other issue is that a proper feasibility study will put to bed this annoying argument that keeps coming up that we will need a POX circuit of circa $ 800 M capex cost , which in my mind doesn't add up either particuarly when you look at some of the mass pull information. So it would be good to get clarity on this issue once and for all too.
Few on here arguing that there will be further dilution from here to the share base to fund the mine capex cost . That goes without saying for any explorer transitioning to a developer status and the Lassonde curve is a well known price pattern as we now move into this next phase, which actually started yesterday . However the sooner there is a credible pathway to mine development the uncertainty that can creep in with this phase of the curve due to uncertainty around mining Opex cost, capex cost, timelines, offtakes etc, can be overcome and one can move beyond this phase in that curve. It is noteable too that while there maybe a dip in this phase there is usually good gains to be made once you get through it to production status.
Deg board and management have been signaling for well over a year now that they want to actually mine this thing ( not sell it off) and a number of hires including Jardine himself were done ostensibly for this reason. So for mine( no pun intended) its now time that guys like him need to step up and lead us to production. He wasn't hired to be another well paid guying running around the country telling investors about Ozs we have already found (most before he turned up) but rather how we develop a credible pathway to mining and not only that , actually executing that plan and that includes funding the capex as well in a way that minimizes further share dilution. Us long term holders have already been diluted through past silly capital management decisions , so we don't want waste again here. Again too I note a new cfo with actual mining experience was bought on as well , so same comments apply for him. Time for him to step up too.
So while I think its important we keep plugging away firming up the existing resource to M&I status and exploring along the Hemi trend line for potential further analogs , the priority for mine now is a proper mining feasibility plan and getting that fully developed and announced to the market as soon as possible. Otherwise why have we made all these mining hires now on our books ? We could have just stayed an explorer and kept possibly finding more Ozs but you really do arrive at a point where the market valuation gains from more Ozs diminish more and more once you get past some threshold which in my view is somewhere above 5 M Ozs.
One other side opportunity I would like to see Deg management investigate more (particularly with $80 M bucks of exploration money in the bank) is the potential of our holdings to contain economic Lithium (spodumene) deposits. Lithium will be an in demand mineral in the next 20-30 years, and we already have a possible known resource on our tenements with the King Col deposit which hasn't been further explored. Pilbara minerals who I am also a shareholder in, and who arent that far from us have also recently found further good extensions to their deposit. Geoscience Australia is now on record saying what a few astute investors have noticed too in that there is high correlation between discovery of gold and lithium within the same area/zones , often being the result of the same volcanic processes from ancient times.
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