AAU (ASX) Ann: Continuing High Grade Results From El Pilar Cuba

Originally posted by Hateful8: ↑

Hola Amigo, @amdrf

Just been researching Carribean destinations to live in for less than $1500usd a month.. Colombia, WI, Venezeula & Cuba all in the mix and all very attractive I might add senor.

As for your question;

Safe answer is to say whatever someone is willing to pay for it!

Anywhere else and during different times the NPV that the (still pending) DFS underlines would be a starting point, less X amount for the constraint applied to operating in Cuba, less Y applied for the high arsenic content now working against you due to typical markets being closed perhaps, less any transport cost and other penalties applied to shipping concentrate with a level of arsenic in it.

China has the WHO currently crawling all over it in relation to high arsenic samples returned in Rice and Water samples to the point where the Gov imposed their own limit which was in fact lower than the WHO's. This has had the effect of lessening the max allowable content limit that foundries used to be able to get passed the old max cutoff without realizing a penalty weighting.

Remembering you are already at a % gold price offset and this only adds to that which means things start to look borderline.

Add the fact the Russians are null & void whilst they endure the long game of Putin's war that nobody wanted at the start and you start to feel the pinch.. How they (the Russians) get out of the situation is anyone's guess now but they've effectively created another Afghanistan conflict right on their doorstep.

So even assuming the Omani's or someone will take the Antimony, which does penalize the gold in order to reach % targets you are left with selling the gold to the Chinese with no competing party so good luck negotiating top dollar on that lot.

It's a good project and earner La Dem in the right environment and with the right offtake partner, however now things are a little tricky and ergo your ability to offload it for a high $ value based around NPV/Cashflow projections is going to follow suit perhaps?

The other way is to go the "In Ground Value" route and assign the std $45usd per ounce to the 905'000 au/eq ounces claimed and arrive at a figure $40'725'000 usd..

Half of which is circa $20m usd, Which is what the company will have expended to get the project off the ground according to the ann below.

Others may disagree but personally if it's going to be that hard to get up then I'd, save the headache of construction and ramp up, take the $20m cash & add it to any arbitration funds receivable.. Then I'd change to a single focus and go develop El Pilar oxide mine whilst drilling and hopefully defining an MRE for that Copper porphyry below. Can get a fair bit done with $50-60m usd, no further CR's req..

Still quite a few mouthfulls to go on La Dem before you could swallow it without choking, so to speak & why chew down on that bone if you don't have to, instead leave the hard stuff to someone else..

That's my 2 cents & it's all IMO only

Just took another chunk in the SPP so let's see if we read it right and the bottom is finally in?.

If not then it looks like I've just stuffed a fair sized gob stopper in my own cake hole for a laugh... ! gltah H8tey

Following receipt of the revised MRE, the final mine plan can now be established, and incorporated in the Definitive Feasibility Study (“DFS”) for the first stage of the La Demajagua project.
 The DFS for the open pit mine has been delayed while waiting on additional antimony assays and should now be completed within three months.  Metallurgical test work aimed at optimising recoveries and metal grades is nearing completion for the two products to be produced, a gold arsenopyrite concentrate, and a gold, silver, antimony concentrate.
 Recoveries and grades to date indicate that at metal prices offered by buyers interested in concentrate off-take, revenue will be in excess of the US$100 million per year forecast in the Revised Scoping Study results advised to ASX on 30 March 2023.
 The Revised Scoping Study indicated that Antilles Gold's estimated share of surplus cash generated by the proposed mine would average approximately A$45 million per year at a gold price of US$1,800 per oz, and current exchange rates, and the Life of Mine could now be extended from 9 to 11 years based on the increased MRE.

This would be an excellent return for the Company which is only committed to investing A$20 million (US$13.5 million) of equity for its 50% share of the joint venture company developing the La Demajagua open pit mine. 3
 The Company will have invested A$15 million for shares in the joint venture for expenditure on pre-development activities by the time the DFS is completed.
 The A$5 million balance will be expended on mine infrastructure in Q1 and Q2 2024, subject to project financing being finalised.
 Negotiations have commenced on two potential sources of project funding; - advance payments for concentrate - deferred payments to Chinese suppliers of plant and equipment, backed by guarantees from the China Ex-Im Bank

Expand

"...less X amount for the constraint applied to operating in Cuba, less Y applied for the high arsenic content now working against you due to typical markets being closed perhaps, less any transport cost and other penalties applied to shipping concentrate with a level of arsenic in it."

If the DFS is done correctly, shouldn't these things should already be factored into it? Also, certain markets that may be closed to some Western countries may still be open to Cuba.

I'd say its worth waiting to see how the numbers in the DFS pan out before contemplating selling LD, though AAU should have a good idea by now what those numbers will be. Eventually the war in Ukraine will come to an end (or stalemate) and markets will reopen, so taking a longer term view might also be worthwhile.

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(20min delay)
Last 0.4¢		Change 0.001(14.3%)		Mkt cap ! $5.845M

Ann: Continuing High Grade Results From El Pilar Cuba, page-31

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Ann: Continuing High Grade Results From El Pilar Cuba, page-31

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