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true MGV had a lot of trash ounces. I usually sit with the bulls...

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CashedUpBogun

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27/10/23

12:41

Post #: 70575583
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Originally posted by speculator101: ↑

Hey Cashed, if you get a chance, it would be worth taking a closer look at what RMS paid up big for (MGV).
The price you mention is correct if you look at all the ounces owned by MGV, but.... not when you look at the ounces that RMS are going to realistically able to mine, in the sense that RMS paid approx $240m for 330k ounces of somewhat high grade ore (the strip ratio's on the small pits are crazy high), which gives the price paid of approx $730 AUD per ounce. Which is still less than what RMS paid for it's Penny Project ounces, which worked out to be around $1000 AUD (and that was quite a few years ago now). The rest of MGVs ounces are low grade and barely viable to be trucked to Mt Magnet.

Because SPR is so unique, in the sense that unlike say, NST which recent bought a stranded asset of STK, for $61m or.. at approx $176 per ounce to I assume enable them to extend/fill their large plant. Yet the grades in that deposit are less at 1/4 of what NN underground is currently.

Basically... due to having the plant, I would argue the price paid for ounces could be anywhere from $300-1000 AUD minimum, though to clarify, that is for ounces in a mine plan, not just sitting at the bottom on an old pit.

So if the plant is worth $300m, and... we conservatively achieve a 500k reserve for Never Never, I get a low valuation of $450m to.... $800m.

I guess that is why the SPR team are "frantically drilling" around the plant.

As @Prisoner24601 points out, it's not just the grade, it's not just the amount of ounces, it's the ore body itself and how well it's going to be mined (efficiently and effectively with minimal dilution).

In the end, I am sort of leaning towards SL still being conservative about almost everything he discusses.... I mean, the topcut on the NN ounces alone could provide some incredible upside...

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true MGV had a lot of trash ounces. I usually sit with the bulls not the bears! thanks spec
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true MGV had a lot of trash ounces. I usually sit with the bulls...

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