They are looking at a mining operation or essentially a mechanical part(s) in isolation though.
Yes machinery has a hockey stick effect on time/hours used vs cost regardless of how structured the preventative and critical maintenance programs over the operational life are; it is similar to a car; however, there must be much wider considerations here than just risk around opex / capex mechanical spend.
For 1. MLL have tenements and inferred resources already. The single biggest issue with explorers even if they have a multi-billion dollar JORC in-situ resource is what? INFRASTRUCTURE. It costs literally hundreds of millions of dollars to start up a significant mine. You need a resource, approvals, government and PR relationships, funders, off-takes, operations, supply chain, executive function etc.. That is why you see so many JORC compliant "in theory" multi-billion dollar resources that never get out of the ground and SH pay for CR after CR until one day it finally happens.
Now owning shares in an explorer you want them to do what? EXPLORE AND HIT THE BONANZA GRADE, THICKNESS, VOLUME, OPEN ENDED VEINS etc. MLL have stated they will aggressively target resources and acquisition of sites to do what? Feed the beast that is the plant they just acquired becoming a producer.
So for me at a high level I want to know what the opex costs per annum, what is the break even point from a volume vs gold price? what is the pathway to profitability? What is exciting is there is a baseline revenue amount coming in for MLL shareholders which is just insanely good.
What is fantastic reading over some of the sites they have explored it seems like there may be some major deposits that they can keep churning out.
On the production side and for consideration; 1. Will there be a make good clause or refurbishment allowance in the contract prior to purchase? 2. What has been spent recently on maintenance? What are the big ticket items outside of capex for potential failure? 3. Can they close down and ramp up sections of the mine effectively (I assume sure) and put in care and maintenance?
I am assuming a lot has been considered over the last few months and the deal is sorted with Barrack and Anglo which is mutual. They have clearly stated they want to focus on unlocking future Tier 1 sites. They have a VERY HEAVY COST STRUCTURE TO FEED.
Now the DFS LITHIUM play is just another company maker and beast as well. But again it is just an in-situ value with theoretical numbers regardless of how much "potential" it has. potential doesn't may the bills. But the negotiating power only increases with MLL bringing in revenue or hitting strike whilst drilling as that gold will be turned into $$$ and go straight into the bank.... That is what counts here.
IMO this is now a $300M+ play all day long especially what looks like a positive DFS so at least 5 bags from here.
Think about the string of announcements coming re: Acquisitions, drilling, DFS etc.
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