They should rename the project CMA rather than Yaoure- there is...

They should rename the project CMA rather than Yaoure- there is next to no profitable gold in the Yaouri pit and its mostly coming from the higher grade CMA pit.

They are going to high grade the mine for about 5-6 years (note how the milling grade falls under 1 g/t after year 6) and hope their exploration team can extend the mine life. Unfortunately their geo team has not been successful at Edikan or Siss in lifting mine life (lost some ounces but gained some so about even at Siss) and I have no confidence of them improving their LOM significantly at Yaoure - that is the way I think the market will play this.

Looks as if they got duded by Amara, despite what the CEO claims, unless their exploration effort finds another 1m+ ounces of reserves at say 1.6 g/t. In essence most of the post tax/post debt cashflow from Edkian/Siss projects will go towards funding Yaoure mine, exploration costs, interest payment and head office admin so eventually the $US380m NPV means that the pre-takeover shareholder are only sharing in about $USD190m, which is hardly a major gain and is probably about what they lost by having their revenue from Edikan and Siss being shared with formers Amara shareholders.

At least PRU did not do as poor a deal as TGZ when they got fooled into taking over their neighbours in Senegal expecting to access a pit with 1 million ounces at 2 g/t, when it was actually grading at 1 g/t. This pit was supposed to save their high cost operations and they ultimately were forced to mine their existing high grade tenement (Gora) some distance from their plant.

I think PRU will get the project off the ground, like they did for the low mine life Siss project but I suspect they will wait to commence construction into late 2019. There is just enough in it for this to go ahead, IMO. Banks will lend on the basis of the net casflow from Edikan and Siss.

PRU's share is not going to run on the basis of this project and some who bought ahead in anticipation of a more robust DFS will sell out in disappointment. I sold half my holding at a small profit this morning, to reduce risk, and may sell out totally for now. Specs may consider buying later this year on a possible run in the gold price expected early next year.

PRU will remain a good play on expectations of a raising gold price. One needs to note that from about the middle of next year PRU's Edikan mine should be operating at much lower cost (higher margin) and their Siss mine will also be delivering some useful cashflow so that on a cashflow basis PRU will be much more attractive, albeit only for about 4 years (and then Yaoure should be in operation to replace Edikan).

At least the management team should be able to continue feeding themselves from these projects until about 20017, that after all is the main thing.

Oh, and us shareholders had better forget ever getting a dividend unless the gold price heads over USD1450+.

loki (always look on the bright side of life)