Looks like this was the reason for some activity this morning....

Looks like this was the reason for some activity this morning. Interesting announcement. GUN have several proven reserves at Mt Gunson which are smallish but shallow. As such they are likely to be easy to access and economically attractive at prevailing Cu prices and those expected going forward for the next few years.

This announcement concerns MG14 which has JORC compliant resource of 1.1 million tonnes at 1.7% about 25m below surface. In 1992 it was considered to have been potentially feasible at Cu US$1 per lb. (Note this is not the only deposit being evaluated as Xstrate are conducting feasiblity into one of the larger ones but memory just gone blank on which it was).


It's not a big announcement or a company maker but what I like about it are:
i. It's relatively low cost venture for the company. (GUN do seem to keep pretty good control of expenditure).
ii. It allows the possibility of producing copper over the next few years generating cash flow whilst continuing to explore out the deeper targets at Mt Gunson.
iii. If Xstrata end up pulling out of their earnin, which is not suggested at the moment, then it will increase GUN's share of the small mine pie (Xstrata potentially have the right to be major partner in these small mines). This would help gird up our ability to control more of Mt Gunson going forward.

All speculative at this stage but contributes to the picture of a company that is moving forward with a clear strategy.