Talk about saturation posting.
Many of the posters saturating these threads today are the same one's that went quite as the share price was retreating (and they accuse me of having an agenda). There are Hot Copper SP premiums built into the share prices of OGX and BLK at the moment. Simple dumb momentum traders with no real idea about long term FA. Just buying the stories based on the potential for more share price lift off the back of more ST "good news flow".
Just remember from the fire-side chat with JG, the targets couched are based on oz/month not grade.
"Yes – for the new team it’s all about production and delivering on our targets. If we don't produce our respective targets whether they be 1,000, 1,500, 2,000 and 5,000 ounces per month"
Whatever the grade the management has set a target of between 12,000oz - 60,000oz per annum (by this statement) so don't expect anymore from the existing facilities. If it's mid range that's only 36,000oz production per year and then you have to pay 20% per year to Cartesian (total 26,400oz for repayment of full loan) which would reduce the mid-range target to 28,800oz.
Assume (and this is a big assumption, as so far the costs are unknown) a generous AISC of A$900/oz so a similar margin on production (of ~A$800oz) and this company could make ~$23 million per year (based on mid-range production after the Cartesian % royalty), and before, tax, sustaining capital, A&D, exploration expenses (depends if they are going it alone or not???
) and non-mining admin expenses in two countries.
There are also two tax litigations in train with the potential of A$5.0 million (maximum) becoming due if they are unsuccessful (and the amounts can't be recovered from a third party, TRY) plus another litigation for lesser amounts.
The chance of this stock multi bagging from here in the short to medium term based on current valuation and the production targets set by management are minimal IMO. If they can get 5,000oz per month (sustainable) there is more upside but this seems like an unrealistic expectation in the short term IMO. The mid-range case is more realistically IMO.
If by any chance I'm lucky enough to get 16cents on some short term euphoria and HC hype I'll take it. Keep the "real" saturation posting going guys, I want my money. Esh
