True, but just because some are stranded doesn't mean that a profitable deal can be done to benefit both parties. Because the deposit owner will need to take the risk on the mining and haulage cost. We will be taking the risk on the processing cost. Then whatever the agreed profit split is.
So in order for it be viable for both parties the grades needs to be high because the cost to mine per tonne is relatively fixed within a range. The cost to process also is relatively fixed within a range per tonne. Need to maximise output for effort.
Also need to factor the other deposits metallurgy to see whether or not their ore can effectively be processed and recovered in our processing circuit.
For example RXL has a nice little very high grade open pittable resource at their Grace Prospect. 109koz @ 7g/t. Their met test also indicate that the the ore can be processed via conventional gravity and leaching circuit. I believe they want to go at developing their asset alone, however, a deal could be done where we they would toll mill the first 30koz at our plant to generate some cashflow.
There are options out there but it is more circumstantial at the moment. For example, AME want to go at developing their asset alone, i believe with the aim of defining a larger resource to sell for a higher price because they were ready to let it go on the first goldsea offer last year. But assuming they want to take their asset into production, and assuming they are going to need at least a 500koz reserve to make the development work. They are going to need a global unconstrained resource well about 1.2moz and at least 800koz of it constrained within pit with at least 70% of it in Measured & Indicated. If you assume a discovery & resource definition cost of $25/oz, they still need to find another 870Koz with an estimated capital required of $22Mil. They are constrained by their placements limits so if their SP doesn't increase, they'll need 2 years to be able to raise that much money to hit their target assuming the scale is actually there. So they are a very long way away from actually monetizing their asset if they were to go at it alone.
For now it's all a suck and see what eventuates from the CA with have with the other companies. The longer the micro cap mining stocks remain liquid the better it is for us because it'll force the hand of some of the smaller players down this path. It'd be really beneficial also if POG trades above $2600/AUD.
Not much to discuss otherwise. Really only down to 3 Options now. 1. Tolling Milling 2. POG surges beyond $3000/AUD 3. MDI Merger with ???. The value add would be a re-rate of the new company when they are able to get into production.
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