Good to get some idea of the way ahead. I've been too optimistic...

Good to get some idea of the way ahead. I've been too optimistic in thinking the company will get to 150k ounces p.a though.  Still 130k ounces for four years is not bad value for $120 million EV. The remaining $90 million should put a floor on the price around these levels.

It's a pity they can't mine MS before Milky Way given it's grade is 1.7g/t compared to 1.3g/t for MW and the stripping costs are $3 million less.

The total MS resource was probably larger than I expected at 506k ounces. It's disappointing they couldn't prove up the reserves - it will come but not fast enough for me so I'll guess. If you assume MS has the same conversion rate of resources to reserves as Milky Way then I would assume a reserve of around 240k or about 3 times larger than MW. (506k resource for MS v 164k for MW). The sooner the reserve comes out the better, though. If I'm in the ball park then mine life should nearly be all reserves after the conversion.

It does seem a bit like groundhog day though as we're still on 4 years of mine life. The company will need to perform consistently each quarter by growing cash to counter the short mine life perception. Ultimately at the end of the day I'd prefer a short mine that keeps growing cash then a large mine life that is unprofitable.

The upside in the short term will have to come from Vivien and Water Tank drilling which if successful will not only be high grade but low capex since the mines are already in operation. Vivien results are due late June so here's hoping.

It would be good to see if anything comes from Zeus as it would appear they need low grade ore to fill the mill beyond 2021 more so than high grade ore given MS deeps and Galaxy deeps aren't included in the mine plan.

While they're at it they can prove a resource on the Mars/Mercury drilling from around 2011/12 - I don't know why they did all that drilling back then if they're not going to prove up some sort of resource with it. The cross section shot would seem to indicate significant potential. They do mention at the bottom of page 1 that access is available for drilling at Galaxy so I'm keen to see how that goes.



Also the other thing that isn't clear is whether or not the Milky Way reserve can be increased. There was a diagram showing the cross section with a largish amount of ore (100gxm) in the north east end in the inferred category between 150m and 200m.  Inferred resources can't be categorised as reserves so is it just a case of more drilling once the pit has been dewatered and has better access to prove up more deeper reserves. i.e. does Milky Way have more potential?

Hopefully they make an announcement when mining starts at Water Tank soon as well.


GLTA/IMHO