Well, I have some bad and good points to add, first the bad. Out of the 18,500 oz , we will be giving away 20% to as per the gold sharing agreement, so that brings it down to 14,800 oz by $700 leaves $10,360,000, then 30 % of that to our Brazilian partner, leaves $7,252,000... So our market cap at the moment is probably fair, but when we add in a further 50% dilution when the options kick in later this year, then if that formula still holds then we are over priced in my opinion.
Now the good, grade is very likely to be well over the 15 g/t and as production increases, so should the SP. However, the area that I see as being more important that grade, in the longer term at least, is the size of the resource. As they expand the mine to the South and the North as well as down dip, then add in the proven head grades, I think we will see the SP head North correspondingly. The high grade is only part of attraction to Cascavel, the potential large size of the mineralised zone is what will see this mine shine in my opinion... Remember, they are only mining in the upper zone at the moment, there is another parallel zone, some 17 meters under this one. All my own opinion, time will tell...
OGX Price at posting:
16.5¢ Sentiment: Buy Disclosure: Held
