Danny, am an ex owner/operator of a small business, and appreciate the 'two feet on the ground' approach reqd to survive and make a profit. No room for fantasy, no way to avoid the feed back from the decisions we make.
Vango, for reasons I can't know, failed or refused to make a deal with SGI. Van's CEO, McInnes, talked for years about buying their own mill, about SGI's mill being not 'fit for purpose', etc. So no deal was ever done, and vango never produced an oz.
The very first thing CYL did, long before the t/o offer for vango, was enter discussions with SGI.
That is to say, CYL understood that the key to optimizing profits from Marymia is, very obviously, through SGI, through having use of the mill and all the other SGI assets.
A key aspect of the worth of an asset, regardless of it's replacement value, or book value, or estimated auction value etc, is does anyone need it ? The answer is yes, in a major way.
What I've just discussed, above, is not the main value of SGI assets, it's the 'extra' value that Marymia brings.
The main value is based on over 10 years of profitable production ahead, at 100kozs/yr from P&I underground ore, through just one of SGI's two mills. On top of that, how much value to put on 5 million inferred open pit ozs from main pit extension....maybe zero until more infill drilling, and inferred underground continuation of P&I, again await further drilling.
I say SGI makes money from it's underground ore at 60oz/yr, very good money at 100oz/yr., and suggest that's proved from past years, but recently obscured from view by appalling losses from the main pit deeps project.
In my eyes then, a profitable operation with added potential for profit from a new source of ore, Marymia.
I think 200 million is a bargain frankly......
But, not expecting CYL to bid, or anyone else; am expecting a win/win deal with CYL, am thinking a Newco that then partially self finances based on proven assets, strong backing, short period to production, very low capex, possibly actual ownership of second mill etc.
But hey, could be wrong, with sgi shares at current price, hard to claim otherwise.
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