being wallked down as target for takeover???, page-6

oracle

if you look into the forward production profile the head grade increases to 7.5 to 8gpt, this will reduce total cost back down to the 800 mark and cash cost to below 600. That is similar to average SLR costs.

This is a very high grade epithermal system and historically head grades where over 10gpt. The previous owner let the mine run down and NQM have spent the last 18 months reinvesting cash flow to get to a lower cost steady state operation

As for the reserve size, all high grade narrow vein miners are limited in the reserve size to usually three years. Norseman rarely has more than 3 years reserves yet has been mining for 50 years. This is simply a function of the JORC code .An investor has to decide for themselves the prospectivity of the mine.

In any case, a JORC resource doesnt mean its payable ore and as far as I am concerned 50% of AAM JORC is unpayable. I would say 80%plus of current resource for NQM is payable.


In terms of EV, with $15million cash, a base metals project worth $8million, then the EV for the gold assets is around $23million. The brokers NPV on the project at AUS$1000, excluding the Twin Hills resource is over $75million, thats a huge discount to the current EV

Throw in Twin Hills and $1250 gold the NPV is over $100million

This is the next SLR. It has all the same characteristics:

quality very high grade underground mine

top class management with well connected directors with vast experience in the gold industry

strong balance sheet

trading at a big discount to NPV

excellent high grade exploration potential

These guys are ambitious, they want to creat a mid tier mining company. That ambition is combined with patient, quality management of its gold resource

its as good as it gets on risk /return