Just think about this. We've only been at it a year.
And the ground and gravity surveys, their first targeted drill at Adina hit an elephant called Jamar.
They suggest that it could extend another 1km if what drew them to the target is an indication of more of the same.
Now apply that technique to the rest of our land.
How many more Jamars at Adina, and Cancets 20 pegs etc.
If we measure value on the rule of thumb by 150m per 10mt.
How do we measure the early cash flows of a DSO operation of even 3mt at Cancet starter pit ?
A detail look at CXO is necessary. And reason why Stephen Biggins came on board to replicate.
CXO 18.9mt x 1.32%. And it is using a DSO starter pit.
2.2b MC. (and would rise as it transitions to 6% spod development) Its all about the cash cow.
So there is a rough rule of thumb, valuation for resources in ground at 150m per 10mt
And another applied to when a company has the white of its eyes on production.
Cancet is the doorway, to a high grade starter pit DSO operation.
Except that we could have significantly higher resources than CXO, with the combination of Cancet and Adina.
Multiple Jamars ?, and Cancet extensions 20 pegs?. And other projects.
So we will continue with a low dilution acceleration of drilling, to add resources, and move towards our own DSO starter pit. Hence there are two pricing mechanisms that the market will be looking forward with.
Resource growth and the hyper drive that comes with entering the hyperspace of a developer come producer, even DSO. As CXO has made that leap to hyperspace leaving the resource tonnage valuation in its wake.
WR1 then => 2 x CXO (with a lot more resources to come) = 4 bn. +
And how much more then, when we move from DSO to 6% spod concentrate ? the earnings go up multiple times.
For mine, the path to 300m->600m -> 1200m -> 2b -> 4b+.
And the path of least resistance to get both of these shallow assets to development.
Why would you get off that train ? As the market is lead down the same path that CXO is navigating. And even for CXO there is upside as cash flows multiply into its next stage of development. We then would follow that uplift trajectory.
Must only be cautioned with black swan global events. But all things being equal, while the sun is shining, put your prize stallion on the race track where he belongs.
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