Hi all,
I was happy to see the gold work at Mangaroon take shape transforming this company into a self-funded explorer. Companies that generate discovery and then JV or on-sell
can generate strong returns for shareholders. Adding "self-funded" to this equation is high beneficial and not built into the share price
yet.
The REE developments are very important for DRE at this time because they add another "barrel" to the gold play now in motion. The value of the REE's and Carbonatites far exceeds the current market capitalization of DRE ($54M @ 1.3cps). The HAS Yangibana JV with Wyloo has just accelerated the upside re-valuation of this project. DRE have signaled that they seek downstream partners for the Carbonatites so as not to end up stranded like they did on the REE's two years ago. It is great to see them learn from that exercise and seek to avoid a repeat.
In summary DRE have a promising situation with two minerals, one of which is HOT and the other potentially running a cycle low that is moving to strategic moves directly over their northern tenement border. The economics for HAS and Wyloo would be drastically improved with the incorporation of the DRE assets here. Thank you to all for posting informative snippets that point to all this.
This is NOT built into the current share price either.The gold estimate from the SoM was $50M @ $4600 based on forward futures prices when the spot price was several $100's lower than the current level. The COMEX futures price (low ball paper contract price) can be seen in the chart below (GC1!/AUDUSD). This is a beautiful and bullish uptrend shown in log scale. A futures offer would already be higher than A$4600 on further out contract expiry dates. The sensitivity is $2M added value to the SoM per A$100 rise in the AUD POG.
Remember that a partner will input the $10M max draw-down to mine this small but super high grade pit and that BC8 (assumed to be the partner after securing the option) will take half of the net profit. This is the main barrel to be fired and already in progress awaiting a nice revaluation of the DRE share price by shoving $25M+ into the coffers that just got topped up. They are fully funded to income and that income has a high probability of increases as outlines in some excellent posts in other threads.
I just wanted to clarify the DRE share that will grow in value and be repeated enabling this crack team (defined by exploration successes already in the pipeline of monetization for all of us) to uncover the discoveries lying with this large very lightly explored gold field. Billion dollar discoveries may lie within this area given the deep crustal fault systems. DRE are de-risking investor positions so I have been adding to my position in this range. It is all about risk reward. Downside risk is low, lessons learned, deal done and upside to follow. The gold in streams and already defined in pockets will lead them to something meaningful IMO. Then there is the other upside opportunities present will all those other deals in the pipeline that will add some cash to the coffers too.
My time horizon for success of this investment is into 2026. The gold sector is a long time study of mine. This is quite unique.
I hope the emphasis is not offensive.
GLTAH CW
(20min delay)