They have mentioned kicking off the mining with a small scale plant and crusher. I would assume that they would excavate and crush 200 tonnes a day minimum. The overall resource definition is .7 grams per tonne of gold not allowing for the 60 grams silver or the .29% copper.
Lets use gold only 200 tonnes= 140 grams 140 grams = $154 000.00 per day gold value at $1100.00 AUS
This is close to the surface and they would target the sweet spot initially so these figures are conservative. (Remember copper and silver not allowed for)
Allow $20 million for plant and equipment (This will be sourced by JT from other mines closing which saves money and bought from cash)
Then allow for all the costs of extraction, overheads, plant shipping etc etc we can assume 40% of this ore will be profit.
40% of $154 000 gives us $62 000.00 daily profit. If the plant is working 250 days per year its $15.5 million profit per year with no debt this works out approx 6 cents earnings per share per year.
I am happy to be corrected if anyone thinks current potential is greater or less with a small plant?
I think JT is taking the right action, lets get the mine under way and as the money flows increase production.
Second year should see 400 tonnes a day (12 cents earnings)
If you bought shares now at 18 cents its likely that in 2 years the share price will be triple current share price allowing for 18 cents of earnings and 18 cents in share price growth.(54 cents) Thats in a gloomy economy of course if the market picks up in 2 years which is possible we would be over $2.00.
This is not a ramp i am just trying to do a conservative estimation of current potential. Would be interested in other views on this?
CQT Price at posting:
16.0¢ Sentiment: Buy Disclosure: Held
