Just a few observations,
One of the 2 triggers required for Doc & co to get their performance shares is a jorc resouce > 2m oz. Another trigger is the extension of mining beyond May. With the anticipated extension of the tailings to June/July, the tailings left behind at the base of the pit (which are higher grade), and the stock piles, this trigger looks to be a certainty. They would be looking for a very solidjorc resource above 2m oz if this is a trigger to the granting of these shares,in the Docs case 2m shares - he does like accumulating. By solid I mean - not just scraping in, conservative in the estimates. This along with all that extra data is possibly a contributing factor to the longer time frame being taken before it's release.
As others have posted, the sale by Resolute of Bibiani for US$105m does make our purchase price of Morila a steal.This has a smaller plant than ours (3mtpa) and they need to spend US$115m to get it operational. We paid $22m ($5m was tax credits) and get back US$17m in after tax tailings profits. It's hard to compare apples with apples, Bibiani has a larger resource 2.5m oz at a higher grade. But it is underground (higher mining costs offset by higher grades). We effectively paid $5m for Morila ($27m less $17m less $5m tax cr) and maybe need to spend $10m to dewater etc. They paid $105m and need to spend $115m. No wonder RSG went up 10% yesterday. Barrick & Ashanti are a too big for our cheap sale to have an effect.
I'm not a chartist, however a chartist will tell you consolidation is a good thing in order for a breakout to have any merit. If you look at the volume that has churned away between 14-16c in the last 2 months, I think we've met that criteria.
Gold is holding up presently US$1865 oz and with the combination of Yellen & Biden should do very well.
Interesting article on gold - basically says the $ is depreciating, you need to be in gold or bitcoin to avoid that.
https://www.*****.com/news/2020-12-16/Dollar-to-lose-another-99-of-value-over-time-says-Alex-Mashinsky.html
Re reading the initial Euroz report had a few snippets I'd forgotten about.
"We also note that there are some companies operating in West Africa with significantly higher market capitalisation than MLL with no current defined resource – ie OKU, CHZ, PDI"
I'm still trying to find a gold producer with our prospects that is cheaper. With about $30m in cash our EV is only $80m - and that's based on gold alone ignoring the Lithium.
"The ultimate prize is for MLL to become a mid cap gold producer with annual production of 130-150koz pa"
"All going well, we believe that in Q1 CY’21, some of the satellite pits could be back in operation. Mining at Morila main pit will take longer with de watering, pit wall cut backs etc. This is probably more like a 9-12 month time post acquisition"All going to plan so far
"If sufficient reserves are defined then from the satellites deposits on the Morila ground, at a historical grade of 1.2-1.4 g/t this material would displace the tailings and could see production increase to ~ 70-80koz pa"
That is almost double our present production just from the satellites.
"The processing plant is a conventional Carbon in Leach (‘CIL’) facility and commenced operating in 2000 with a t’put of up to 4.5mtpa treating fresh rock. The plant was upgraded in 2004 when a secondary crusher was added to increase the t’put to the SAG mill and again
in 2014 when the SAG mill was made redundant with the addition of tertiary crushing and screening.
The plant is the only processing plant for 200km and to replace this would be in the order of >US$300m"
"Upon acquisition, the workforce is expected to number around 135 staff and up to 300 contractors, comprising operational, administrative, maintenance, security and support staff"
This is a big operation!
"Morila has been closure mode for many years and the last completed resource estimate was completed a much lower gold prices (US$400- $700/oz) and constrained by economic pit designs at that time. MLL has undertaken a review and validation of that Resource Estimate and build its own JORC 2012. resource model and estimation. For conservatism, MLL constrained the resource to within a conservative pit optimisation shell @ US$1,250/oz" (ie any mineralisation outside the economic pit not reported as resource)
There has been a lot of drilling outside the pit as shown in the various presentations graphics, the coming resource update will include this plus the drilling they didn't know about when those presentations were made.
