After a few weeks of "not much happening" post Cannon results, SAU's had a pretty good week. I'm hoping for some good news, as soon as, tomorrow morning in the Annual Report. Also fingers crossed, Weolyu results.
It's just terrific there's so much going on with SAU at the moment. There's actually so much going on, on so many fronts, I'm going to attempt to make some sense of what's going to happen in the next 3 critical quarters and beyond. Why so critical? - that's when the current banked cash probably runs out!
Medium term cash generation is now the priority. Obviously Cannon UG ore is the key here. Simon said it's not "the world's biggest deposit", but expects ore grades to average ~10 g/t. There's a chance SAU could "go it alone" with contractors or do a similar deal (Cannon OP), with WGX or others.
Complimenting Cannon UG, open pits could be staggered into ore production, firstly in ~~March, Jimmy Doughnut, secondly Transfind (late 2018) and thirdly Laveoulus (early 2019). Their medium to high grade (~3-5g/t), oxidised ore can be effectively blended in with the lower tonnage 10 g/t Cannon dirt to get at least 12 months of very solid production. I think that this could happen as early as March next year and cash flow by May. Even a little later than this, means that the piggy bank shouldn't completely dry up and then be topped up nicely until at least mid 2019.
Over to South Korea. I could see a situation where ore from ***ong and maybe even Taechang is "cleaned up" and stockpiled, way before the small processing plant is constructed. In fact, I don't anticipate the "pilot plant" to be constructed until early 2019. However, cherry picking easily mined orebodies, especially at ***ong, but other sites too, will result in immediate and sustained gold production when the plant is completed. The cash flow from Cannon and Glandore can easily finance SAU's portion of the Korean pilot plant expense and general mining costs.
Late 2019 is probably when South Korea can take the mantle of generating cash for all exploration and production expenditure in both Oz and SK. SAU can then look at bigger open pit operations at Cowarna, Glandore and Bulong.
Finding and developing some big, Tier 1 type deposits in South Korea is perhaps the most exciting possibility of all. That'll be SAU's main story next decade, all IMO. Good luck all.
SAU Price at posting:
31.0¢ Sentiment: Buy Disclosure: Held
