what is happening in the gold industry (and mining industry generally), is that a lot of companies are paying the price for some appalling acquisitions (gold, gas, alumina etc etc),, be they big or large. Sure the commodity prices are not good...(but look a 1.7 gpt Au has an inground value of $82 per tonne for gold price of $1500 per ounce, compared to an inground value of a porphyry copper which grades 0.6% Cu at $3500 per tonne and lets not talk about refineries capex etc..so large gold deposits who have scale can work at lower grades)
In fact it has been very clear that with a few exceptions and for a very long time, acquisitions are more likely to be shareholder wealth destructive. BUt the pressure ot grow quickly is immense
Market does not learn
The big smart gold companies do not learn...but they have now...well perhaps?
Look at the Kinross disaster in Mauritania for example to look at wealth destruction for shareholders.
Acq costs $7.1 B Latest estimate of Cap cost $2.7b grade 1.7 gpt au irr 11% npv $1.1b
at a gold price of $1500?, and I suspect they did not put all the acquisition costs into the total mining costs..
will this get financeed....would you finance this yourself?
and so on and on go the financial shenanigans in the gold industry. Growth at all costs..more ounce..etc..forgive and forget acquisition costs...etc
Project financing? So what I am saying is that the fin analysis of a project is coming under some fire from shareholders and stakeholders and all. There will be a lot more rigour imposed, take more time.
In the end its best for acquirers to see a pfs or better still bfs, and especially in a BS market...and then pounce.
so back to what I was saying
1. 300k ozs of oxide (see prev posts by self and gooch on this) 2. pfs 3. bfs 4. pounce or develop
Just a few quick thoughts on the imponderability of what is happening
AMX has scale (which you do not find growing on trees, and the important scale features in gold are large crustal scale faults intesecting with propsective host rocks which have rheology contrasts ..as a starter), and the odds are firmly stacked in favour of what they have as being only a start.
good luck to all
AMX Price at posting:
21.5¢ Sentiment: Buy Disclosure: Held
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