NXM is not distracted, the company has two very distinct and fantstic focuses. You can see from my posts on NXM that I am a holder and big believer in AT. Love what he is doing, and I think the next 6-12 months will be very, very exciting for NXM.
I am unsure exactly how OZM's MRE will be designed, but NXM's was focused on "pits", they've built three distinct pits (crica 50k-60k) each. There is plenty of other gold around, and they can expand that resource pretty comfortably (even just in the Crusader-Templar section). They're now drilling at Branches and MC 4.1. NXM is (currently) capital restrained, and have adjusted their drill program accordingly. I am very comfortable with my holding and AT's approach over there. My last two posts share more of my thoughts on it.
The cut off grade for NXM was 1g, and it was only to a depth of 200m, in some very defined spaces. It appears that they did this so that they had 175k ounces ready to be mined (in three separate pits).
I do not know exactly how AP will do his MRE, but am certainly looking forward to it. The heap leach process has a significnatly lower CAPEX and a lower OPEX. The heap leach process should also allow OZM to produce at a smaller scale with flexibility. It may also mean that OZM's cut off grade is lower (say 0.5g / tonne) this would instantly boost the potential MRE compared to something like NXM's MRE.
That is not to say that OZM will not engage with NST, but it means that they are not reliant on NST or another mill. OZM can quickly, cheaply and efficiently go it alone into production, if they desire. Remeber that NST recently shared a whole lot of data with OZM. They clearly have a very cosy relationship.
My understanding is also that the minerology at Wallbrook is very different to Mulgabbie, and harder to predict. As such, geologists will want tighter drill spacing to estimate an MRE with the same confidence that they might otherwise. Again, this might impact on the MRE size for OZM compared to NXM.
Which if you listen / watch his RIU prensetation again (from the 48 minute mark in the youtube video is OZM), I think you will see his understated excitment about these fualt lines. The work on these has been a long time coming, and my understanding is that it has taken up a lot of OZM's time this year. It is these fault lines that AP considers might really produce 'a significnat discovery'. AP also appears to consider that they are yet to hit the gold at depth. "Very aggressive drilling camapign since IPO...over 90,00m driled...my background is a geologist and I believe the only way you're going to find gold is by drilling". He is definitely not shy about drilling!
I am not expecting a huge opening MRE, but anything north of 60k ounces (which sounds dread fully low) would make me happy. Assuming an AISC of $2,000 (which would be expesnive), the current gold price of AUD $3,000, leaves at least $1,000 profit per ounce (currently). I see the gold price going higher, as does Nicholas Frappell - Global Head Institutional Markets, ABC Refinery (see below video, from 2023 RIU Conference Sydney, from circa 2.15min mark).
Even a small MRE of 60k gives OZM three years of 20k ounces production, or 20,000 x $1,000. Which is $20m per annum, or 3 times the current market cap a year in revenue. This would also just the start, and would well and truly fund all of OZM's driling needs at Mulgabbie.
Given AP is so keen on drilling, and considers that Mulgabbie has the potential to contain a "significnat gold discoevry" I do not consider that the MRE he puts out now would be for sale. I consider that he will use this MRE to start stepping through the process to show that OZM can be a small producer very soon. This will asssist in financing (loan, third parties, cap raise etc) so that he can start heap leaching as soon as possible.
You would also consider that almost any MRE put out by OZM will lift the share prices from where it is. I am also quite relaxed if AP wanted to wait until Holland has stopped selling, otherwise any SP increse wil immediately be sold into. Other than this recent selling, the OZM register has been very, very tight.
Finally, also have to remember that AT sits on OZM's board, andAT and AP are close friends. NXM and OZM will both have conisdered what each other is doing and how they are going about it.
OZM Price at posting:
5.4¢ Sentiment: Buy Disclosure: Held
