I actually don't really have the time to post here, but have tried to because there's been a lot of fear following the announcement.
I couldn't agree more with
@robbo24 and
@lemonwasher regarding the MRE / announcement, and
@llllllllll re the Eastern tenements. I've (stupidly?) read all of today's posts.
I thought that NXM had done enough drilling (and would use a cut off grade of 0.5g / tonne). I anticipated an MRE of 600k-750k, which oddly enough happens to line up in the middle of NXM's Exploration Target (
ET) (480k - 790k). Go figure.
Previous pertinent posts that I still stand by:
9 March 2023 -
https://hotcopper.com.au/threads/ann-bethanga-porphyry-cu-au-fertility-study-positive-results.7273009/page-18?post_id=6668193911 April 2023 -
https://hotcopper.com.au/threads/missed-deadline.7325136/page-2?post_id=67213390I was slightly concerned this morning when the announcment came out. Far less concerned after watching Andy's Proactive interview. I made a few calls and discussed my concerns with far better placed, knowledgeable and more experienced people than me;
I bought more at 10 cents. That's my investment decision - only time will tell how it plays out.
One of the most interesting things I now understand, is that it is likley a large entity (such as NST) will care less about this announcement, and far more about their own model of NXM's tenement(s). NST previously stumped up funds and invested. Maybe they sold down today. Then again, I think (if anything) NST would have bought the 'dip'. Again, time will tell whether NST bought more, and if this is a 'dip'.
Given that NST has experience and knowledge of the project, probably just as good as an understanding as the geologists who prepared the independent report, or better. NST have been in the area for a long time, probably have
all of the drilling data and have prepared their own assessment. I would suggest that NST wouldn't be making its investment decision based solely (or even largely) due to this MRE. I'll admit, I did not appreciate until calls this morning just how much work NST would do for its own DD on a prospective project.
I still back the Wallbrook project(s). There are 5 MCs, one small part of which relates to this ET and MRE.
Back of the envelopeInfill drilling? (ET to MRE)If there is a need for more drilling, to take it from an ET to an MRE (40m40m drill spacing for inferred and 20mx20m drill spacing for indicated)
1600m long x 200m x 200m deep. For an inferred MRE of the entire Crusader-Templar deposit, we would need approximately 40 x 6 x 200m (40m drill spacing across a 1600m length x 200m width , 200m deep). This equates to 48,000m of RC drilling. Lets halve that (a lot of drilling has already been undertaken). 24,000m RC drilling. RC cost per m? Lets take a per m cost of $240 (I don't know exact current cost, but easier to provide ref of $120 per m in 2011 and just double it
https://www.rcdrilling.com/rc-drilling-guide/rc-drilling-the-benefits/#tab-1-2). The rest of Crusader-Templar should be able to be drilled out, comfortably, for circa $6m. Is that the best use of the money? Probably not. NXM have a model that they are comfrotable with which shows an ET of 480k to 790k. If a potential purchaser is comfortable with the work that has been undertaken, and is happy to negotiate as is, why drill it out more? If we go it alone, yes, maybe we need to drill it out more, we will also need to carry out pre-feasability studies etc. However, if NXM doesn't need to spend the money or time (good sources have indicated to take the entire NXM ET to the MRE stage, it will take 6-12 months of work), why do it?
Best use of fundsFor me, if NXM was going to do $6m worth of drilling on MC1, I would like to see it carried out across the rest of the 5km strike lenght, focusing at Branches and Solomon and building it out from there. To me, that would be far better bang for buck than in-fill drilling in Crusader-Templar. That said, Andy is way better at this than I ever will be, and I back him to have a good path in mind.
Value of Current MREFurther, while we are doing back of the envelope calculations, my understanding is that the NST Carosue mill is running low on feed. It can churn through NXM's entire MRE (2.5m tonnes for 175k ounces) in little more than 6 months. (Bottom of page Carosue mill does 4m tonnes per year
https://www.nsrltd.com/our-assets/kalgoorlie-production-centre/carosue-dam-operations).
At the current gold price (AUD $3,000) (
https://www.**promotion blocked**.com/gold-price-today-australia/), NST's current AISC (AUD $1,766) (page 4
https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02632984-6A1137002?access_token=83ff96335c2d45a094df02a206a39ff4), NXM's open pit MRE represents 175,000 ounces x $1,000 profit for NST. That is $175m. Profit.
I am not in
any way saying that Crusader-Templar is worth $175m. I am simply highlighting that there is a hell of a lot of value in NXM's tenements.
I am also very much interested in discussions going on between NXM and NST, and in how this story unfolds. This has been slower than expected, but in my eyes, this story is far from over.
