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Ann: RMS: Response to EXU Target's Statement, page-26

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Saltybloke

119 Posts.

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19/10/18

12:35

Post #: 36186785
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Originally posted by eshmun ↑

Read pint’s excellent post.

The Mace deposit has the potential of providing optionality when it comes to developing the project and reducing capital requirements.

EXU have intimated in public announcements that a cheap heap leach approach for mining and processing the Mace ore might allow for a staged, lower CapEx, early cashflow option. Being so shallow, <10m deep, Mace should be very easy to strip and mine. A heap leach would probably just require a little crushing of the ore before it’s stacked on a leach pad, pregnant solution collected and gold absorbed in activated carbon. The capital cost of this method would be low IMO and parts of the circuit would also be components of the larger mine. The cashflow from this operation could be used to build the larger operation, depending on how big the reserves at Mace actually get. It could either fund the whole of the larger project or a good proporion of the larger project depending on the size and grade of the final reserve/resource. All unknowns for the moment but I’m sure this information will be revealed in EXU’s own time frame. Why would they show their trump card to RMS now. You only play your trump at the most opportune time. Also they aren’t currently in a position to fully announce all the elements of a potential plan like this. These plans take time and are much harder to execute when you have an annoying takeover monkey sitting on your back. I’d say the company is curently concentrating on circling its wagons and seeing the hostile attack off. Once RMS are gone they can continue with their prudent and methodical approach.

You also have a scenario where the influence of Mace is factored into an expanded BFS with the potential for decreaseing the pay back, increasing the IRR, LOM and NPV. As project metics improve the financing hurdle is lowered. It’s just the way this business works. You would think listening to some people around here that gold mines never get funded!! News flash, some actually do and go on to become the next junior and mid-Tier miners of the future.

RMS’s underlying assumption is that EXU is duck and it’s hunting season. Well the only dead duck I see is Edna May if they don’t find economic feed.

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Environmental approval for heap leach treatment in the wheat belt is far from a done deal.
Sufficient long-term mill feed for EM is far from a done deal.
These are the synergies that that are created by the takeover.
Both companies can address these issues alone, but can address them better together.

EXU Price at posting: 11.0¢ Sentiment: Hold Disclosure: Held
8 Upvote

1 Great analysis

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Ann: RMS: Response to EXU Target's Statement, page-26

Top Stories

Red Hawk upgrades Blacksmith with DSO mineral resource at the Eagle Deposit

Nine's staff strike as Paris Olympic coverage begins

Nova locks in NASDAQ US market listing at a value of only US$3.3M as ASX gets quieter and quieter

Monadelphous inks $200M contract with Woodside to help build Pluto LNG – but will it make Scarborough cheaper?

MinRes jumps 5% as the company meets production guidance – depressed iron ore prices be damned

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