Quite ironic that you accuse my other mate of taking “a very simplistic view”. *Note, I think of you all as my “mates” but some of you aren’t quite as fond of me as I am of you
There are some wins here but not for everybody.
Novo - slight win as it puts approximately $150m of losses attached to the combined Beatons Creek/Nullagine catastrophe behind them as well as taking a further $45m liability off their books.
They have given this away and probably have no reasonable expectation of getting the $5m at anytime.
Atlas - big win. Basically renting 200 rooms and associated infrastructure for $1.4m per year with zero liability attached. Very clever and a great deal for them.
This equates to $130 per week per room for accommodation very near their operation at the height of one of the biggest mining booms we have seen.
If CAI had simply just reopened the camp and provided accommodation services to Atlas, they could charge a minimum $200 per room per night.
Again, great win for Atlas.
Calidus - short term win. They don’t need to do a capital raise and their bacon is saved short term. Just wait for the discussion in January re their gold operations for the December Quarter - it will become abundantly clear why they did this deal with NVO and Atlas
Calidus - Oxide ore: short, medium and long term a big loss. Beatons Creek is a yapping dog and only a close second behind Bre-X as the biggest scam in mining history in the last 100 years. Here is another timely reminder of so called experts mining deposits that barely sit in a Resource Catagory without establishing a credible Mining Reserve (sort of reminds us of the Blue Bar statements doesnt it?).
Any so called high grade oxide ore from Nullagine to be transported to Warrawoona is years away and only once new Resources are discovered. Existing Resources have been drilled out like Swiss cheese (and yes at depth before people jump on that bandwagon).
This is a much longer point and if you want to ask any questions, I can answer with reasonable knowledge of the entire Mosquito Belt projects.
Calidus Sulphide - big loss and some huge naïvity from both CAI and believers regarding the viability of building a “Sulphide Treatment Hub” using the Nullagine CIL plant.
Ive touched on this before however it is worth pointing out again. Neither of the two oxide plants can deal with sulphides effectively and profitably with major upgrades- if you believe they can do this for the claimed $14m then I have some magic beans for sale.
Start thinking $100-$200m and that’s only if they have enough high grade sulphide ounces to underpin a DFS and financing. Not impossible but several large high grade discoveries needed in the coming years to get anywhere close.
All in all, a good short term deal to save the balance sheet but a monster anchor after the March/June quarters. They will need to raise $50m in the next 3-6 months to get a start.
CAI Price at posting:
20.5¢ Sentiment: Sell Disclosure: Held
(20min delay)