Stelios, the theory in the video is great if you have a cylinder of 1000mtrs with a well defined ore body.
My understanding, is the nature of the geology of TC ore bodies are generally not well defined, are broken up, (and in some cases) difficult to obtain JORC compliant resources, (Some are, some aren't). The size, and variety of the 'small mines' at TC, range from mines like Edna Beryl where there are pockets of (bonanza?)100 + g/t, to Mauretania where excellent grades seem to be distributed over larger areas.
The JORC compliant issue is IMO the main reason for the struggles Emmerson has experienced in getting the profile required, and support from more resourceful partners. They continued however to do what they do well,, build their assets. Essentially they see themselves as Explorers and not miners.. Makes sense when you consider the time and capital to convert, when you can leverage royalties from someone else that has (or can raise) the capital to takes these risks. Over the past 5 years they've continued to refine their exploration methodology and IP, and appear to be able to generally define these ore bodies and mine prospects pretty well in TC. To the extent they seem to add a new one or two every year , lately. It's taken until recently, when the price of gold and general interest in the sector and number of small mines has increased to such an extent, that private financiers are in a position to see less risk in developing these types of mines. The fact that the numbers are growing would add to that confidence I would think. As a result, TCMG the new partner seem pretty keen to develop a hub with mining and mill facilities to take advantage of the growing number of prospects that Emmerson is developing. In The Australian the other day they had an article relating to the huge number of tenements being pegged in and around Tennant Creek by some of the large Blue Chips in and around Tennant Creek as miners now see that the numbers are stacking up , even for copper in the area. (ERM have a few small deposits of gold/copper as well, and the article mentioned Emmerson and quoted Rob Bills - well done Rob!) .
The TC profile is certainly growing... Despite all this ,, I think some of these mines will have JORC compliant resources to be defined in the short to medium term, along with a promised mill.
My only concern is the possibility of a takeover at too cheap a price.. I have a pinot some Friday nights with a mate, and we take out a napkin and scribble some numbers.. I can't work out from your video how to value some of Emmersons assets,, but our conversation scribble goes along the following lines.
They must have at least 500,000 to a million ounces in TC.. No I can't back that with JORC data,, but I've read a lot of ERM drill results over the past 7 years, and now Mauretania seems to be shaping up well.. and that's the numbers rattling around in my head. Minimum. One would think a lot more once they hit their straps and there's a mill there to process.
OK, so even at 500,000oz scenario at a royalty of 6% = Approx $1.2B x 6% = $72m to Emmerson
Add Emmersons Market Cap is presently $35m
This is ludicrous. To me it would make sense, for someone to come along and to simply say to SH's ,,, here! take this ($$) , and we get the whole box and dice in TC?
At this rate, for me it would want to be in the 20's.. just sayin'.
But I'm not a geo, accountant , lawyer, or MBA.. DYOR,,, I'm just working on the KISS principle.
ERM Price at posting:
6.7¢ Sentiment: Buy Disclosure: Held
