Hey Baro, fair point
Though I guess the main focus of my question, is that WGX have 7.5m ounces in resources.... (5.5m potentially convertible to reserves)
That is a lot! Yet, AME have 330k without any real high grade deposits (which is what I would have thought WGX might be hunting for, to supplement their low grade feed). WGX also have a lot of dirt, yet... your logic is sound.
@bond00what - I cannot think of any company that is trucking open pit ore over 150km (happy to be proven wrong) with grades around 1.5g/t.
I would be profitable (though my guess is no more than a margin of $400) at the current AUD with a big plant, but... none of AMEs current deposits are low cost start ups, they will require substantial pre-stripping.
WGX does indeed have a much bigger market cap than AME, yet, that does not mean they should undertake a T/O which would likely dilute current holders by perhaps 6-8%, for... well, not much yet. They are well funded currently, yep, but then, I have been following AME for a while now, and they have yet to have real success with the drill bit (sure, some progress, but...), I just would have thought that, bang for your buck, WGX would be better focusing on their current brown field assets.
@binwood - perhaps I am being too conservative with the numbers, but... WGX plants are not massive, so, the opportunity cost would have to really stack up. I do like your viewpoint (measured etc). WGX Geos have proven themselves over recent years, so, there must be something they see and the WGX board are listening.
As for MDI's plant. I am a little on the fence, as, if it was a goer, would it be more logical for WGX to have T/Oed MDI, and get 8% of AME included... The main issue surely, is the size and age of the plant (600ktpa is small, but... I acknowledge, capable of being profitable with high grade U/G ore, or perhaps, 2g/t open pit. The main reason I think the plant/land has value, is that it would greatly reduce any development timeline, with a mining license already granted and some infrastructure easily replaceable. MDI do have a lot of gold, but..... its mostly U/G, and at grades of 1g/t. I guess if gold goes to $10k, it will be worth something
But then, perhaps WGX prefer to find the gold first, then worry about a plant (though they have 3 already).
I guess all I can do is watch on in puzzlement, as a WGX holder, that is where my interest lies.
Good luck to holders. Perhaps AME is just 1 drill hole away from validating the MDs stubborn belief in the dirt.
