Spec
I made the following post on the MGV thread in reply to another of your posts. I am not stirring the pot, just have real concerns about the deal.
I wonder if others posters here are also worried about MGV's resource estimates and this deal.
loki
"Spec
Thanks for tagging me into your posts here and on WGX, and sorry for being slow to respond to them - I am getting a bit doddery in my old age.
In particular a big thank you for posting this table of what MGV has - I have since found it in their PFS, and it it has set alarm bells ringing for me.
Firstly while I am not a geo (and WB is also not a geo, but should have a better understanding of the PFS) I am now very concerned that the very high strip ratio for the pits, lack of definition of a reserve despite the many years this orebody has been defined, the lowish grade for the underground resource in the event of this being a narrow vein system, the past history of unprofitable mining by SLR which nearly went broke as a consequence when it owned most if not all of these tenements, strongely suggest to me that WB has either fooled himself or been fooled by MGV into making a hasty offer.
The cost of mining the pits will be heavily influenced by the AUD price of oil, which is likely to rise significantly in the future as world economic activity picks up, oil reserves get depleted or hard to access, and the AUD drops lower.
I now believe that there is a possibility that MGV got the share price running by some back channels on last Monday to induce WB to make this hasty offer, and that while there will cerntainly not be any competing offer, its possible that somehow they could induce him to even up the offer bid.
MGV reminds me a lot of CRK with claimed significant gold resource. In actual fact it was a lifestyle company where the CEO was looking for takeover - ultimately they fooled some Chinese company and another rich Sydney investor to pour money in - the orebody was mined but the grade was insufficient to make it profitable. From time to time CRK would release new drill results which looked good but I was told that these were done in areas that were aready known to be mineralised and that there were wide gaps between the holes drilled where no results were provided because those areas had little to no gold - I got out and watched the company over a number of years as its went downhill with a new name.
To me much of what BLK/WMC and DCN have provided in terms of resource/reserve estimation was also spurious - I got out from both of them, made a useful net gain on BLK but made my largest loss of around $200k on DCN in 2021. For me the penny finally dropped when a geo posted to his mate Eshmun (you may remember him) that the deposit was a dud because the underground orebody was narrow vein and hence the grade of around 4g/t was too low. I continued to post my views on DCN about this issue but the true believers would have none of my naysaying.
If MGV was a goer then by now:
1. MGV would have mined some of it for toll treatment: or
2. RMS would have make a takeover offer - Finlayson will not do such a thing without proper due diligence and I am sure he fully understands the tricks played by companies after the over=estimation of the Tampia deposit which RMS t/o; or
3. GCY would have done some sort of deal with MGV, their current CEO is a very competent geo and I am sure he undertands what MGV really has and no offer will be forthcoming from them.
It seems to me that the bid for at least 50.1% of MGV will prove successful, hopefully WB will not be induced to offer more by MGV BS (but who really knows) and that WGX shareholders will lose up to 19% of their interest in WGX plus the expenditure of $15-40m in proving that MGV are good at putting lipstick on a pig.
MGV shareholders should be grateful that there is a desparate WB willing to make such a foolish offer. At least an offer for GCY would make some economic sense by solving WGX's milling constraints.
I have no idea what role Anthony Buckingham (former WGX COO, he is not a geo) has played in this matter, and as a current employee of MGV his interests are alinged with them.
I suppose its too late for WGX to withdraw the offer now that it is in the public domain, but I hope they do and that there are shareholders that ask WB to do so.
The only upside for WGX is from a higher AUD POG, some improvement in operations, and the extra imcome from becoming fully unhedged by the end of this month. So I still see some possible value in holding WGX.
GL
loki (ouch)"
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