I agree with you that the risk is now much lower as they have Lady Ida as a base case ore feed for an extended period. Treating Lady Ida ore will be quite profitable (refer Iguana Pre-feasibilty and ore reserve announcement dated 24 Feb 2025), with projected free cash flow of $177 million (pre tax and using a gold price of $3,600) - presumably this is gross cashflow, which in the early stages needs to be shared with the vendors of Lady Ida as per the JV/purchase agreement.
However, what stuck me with this pre-feasibility is that whilst mining the ore will only take 23 months, processing the ore is projected to take 53 months (well over 4 years!!), to produce 132k oz i.e. 30k oz Au per annum. To me this demonstrates the issue they have and that is that the processing capacity is small. For this reason, especially now when the Au price is sky high, it would be much better if they could find a high grade gold resource - then they could literally print money, just as you have highlighted. The resource does not have to be big. IMO this is what they are trying to do (find a high-grade ore source), with Lady Ida as the fall back position to fill the mill when there is insufficient high grade ore available. I thought I saw somewhere that they are also considering increasing the mill capacity, which will also help.
As you highlight, all the key pieces are in place - milling capacity (albeit constrained), astute management, base ore resource (Lady Ida) - all we need now is a viable high-grade ore resource and we'll all be drinking a better class of Red
GLTA & DYOR
BCN Price at posting:
2.8¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)