I think the market is concerned about Gwalia still and meeting the FY21 production guidance. I am doubtful they will meet guidance so watching the quarterly with interest. In fact the Gwalia province stuff needs to be sorted too.
This feasibility study seems decent though. Project more technically derisked, capex hasn't blown out too much, AISC in line with previous study. Just need to work out the mining lease extension with the Government.
8% discount rate is conservative given they should have access to lower cost capital than that, and their existing presence in PNG lowers operational risks.
If they boosted the gold price to say $1700 and used a 5% discount rate (like most juniors do) the NPV probably looks like US$350M+.
SBM Price at posting:
$2.03 Sentiment: Hold Disclosure: Held
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