I was in the conference call and was the last but not least...

I was in the conference call and was the last but not least (hopefully) participant in asking questions.

Well timed acquisition at a relatively low EV/AISC-Adjusted production of $2650/oz, suitable for a junior to mid tier mining company. The mine looks to be in good order though have to see what teething problems arise through management and ownership transfer.

The structure of the acquisition was satisfactory though it does mean Syama has to run much better to not jeopardise company financial stability. John Welborn insists they have been using low cost debt and managing successfully. That can be disputed given the company cash burn over the last three years with the green shoots starting to show.

Assuming company produces 400koz at US$920 or A$1 350 AISC, the valuation metric is around $6300/oz, which I consider at the upper end of valuation for a large mining company (production approaching 0.5Moz). Taking annualised production for the next 12 months at 490koz, the valuation metric is $5000/oz.

I like the longer term implications of this but there is a journey ahead that has quite a number of bumps along the way. Game changer acquisition though the balance is delicate!