There's a time and place. I agree that your sentiment towards...

There's a time and place. I agree that your sentiment towards Torque is quite apt for the reality of the last couple of years. But maybe not so apt moving forward.

During the recent run of mining investment conferences both in Oz and in north America a line that was repeated over and over was that even seasoned veterans had not seen such a disconnect between miners, especially junior developers and explorers, and the gold price. A number of mining executives and mining analysts commented that the last couple of years had been as tough as they've seen for goldies. And a common conclusion reached was that while mining companies with proven up gold in the ground are being underpriced there are signs that the tide is turning.

Brightstar recently used the chart below to highlight how cheap they were acquiring ounces in the Sandstone region. Of course what they didn't build into their argument is that Ramelius were willing to pay big bucks for Penny because they had a mill ready to process Penny ore and Penny grades are drop-dead spectacular, whereas Brightstar does not have an existing mill for the Sandstone ore and the grades they are acquiring are relatively ordinary.


But for the sake of the discussion let's use the comparable average purchase price per ounce of $106/0z. At that rate Torque's gold ounces would scrub up to about $26m. But that calculation does not take into account that Torque's ounces are above 3 grams per tonne and are in close proximity to several operating mills. If grade and proximity are factored in then I think it plausible to use a figure up closer to the $176/oz that Northern Star paid for Strickland (Musgrave's Cue project is 2.3g/t grade), giving a number up around $44m. The guesstimates I've given here also do not take into account the mineable spodumene Torque has just across the boundary from Bald Hill's concentrator.

So, my view is that even if we assume that the market will continue to have no truck with junior gold companies then Torque with a market cap of around $20m is still way underdone (as most juniors have been in the last couple of years). But if the market does begin chasing high bullion prices as far as junior companies with proven gold in the ground then Torque definitely comes more into play.