Ann: Mt Boppy gold production milestone met, page-2

Read the annual report at 2am, increased my holding by 50%.

We have mt boppy, manuka, sale of tenenments. These cashflows plus the $25m debt facility will get us to mining marda.
Current market cap is $9m.

marda 167000oz over 4 years

gold price $1600

aisc 1007

http://www.abnnewswire.net/press/en...y_Study_Review_Confirms_Robust_Economics.html

167000 * (1600-1007) = $99m.

assuming we use up all the debt facility of $25m, and we start minig marda within 2 years, the net added cash flows over next 6 years will be $74m.

If USD gold price goes up to $1400's, which is not unreasonable given past volatility, this brings the AUD gold price to $2000.

167000 * (2000-1007) = $165m, the net added cash flows over next 6 years will be $140m.

If the AUD also drops to 0.60, and USD gold price goes up to $1400, this brings the AUD gold price to $2333.

167000 * (2333-1007) = $221m, the net added cash flows over next 6 years will be $196m.

And by the time AUDPOG goes up into the $2000's, we'll be receiving significant profits from Mt.boppy too.

Mt.Boppy has 65000 ounce, 33000 to be repaid into the gold loan. An additional $400 revenue per ounce would amount to $26m.

Additionally, we have 8m of silver ounces in the ground that's uneconomical at A$21, but becomes economical at A$30.

$9m * $5 profit per ounce = $45m.

In a rising bull market for gold and gold mining equities, i think a twenty bagger isn't out of the question.

5-10x over the next 6 years is more realistic, however, if we can make it to marda with the current POG.

And I think we can, because in the annual report were the following changed terms for the deal with trailstone

* TrailStone has waived future commitment fees on the undrawn component ($25M) of the Credit Facility;

* TrailStone to control BOK use of commodity sale proceeds to fund operational expenditure. Proceeds from capital raising for exploration
(including from sale of Battler and British Hill tenements) to be excluded from this regime;

* BOK to enter into agreement to toll mill Marda ore within 18 weeks; and

* Credit Facility repayment profile amended to include minimum repayments of $5M by 31

December 2016 and $9.5M (cumulative) by 30 June 2017

Conjectures:

1. BOK negotiated waiving future commitment fees on undrawn $25m, because they think we might not need it.

2. TrailStone's keeping BOK on a tight leash - we'll have a plan to toll mill marda ore in 6 months.

In conclusion, I think BOK is great value, and that's why *this morning* I've increased my exposure to it from 9% to 13% in my portfolio.

I know full well it is a very risky stock - if it does go bankrupt one day my portfolio will lose 13% of its current value, and that's a risk I'm willing
to take.