Gold road owns 20% of DEG funded by its cash flow from the...

Gold road owns 20% of DEG funded by its cash flow from the Gruyère mine 50% owned by gold road ,50% by goldfields .I thought it might be interesting to look into the Gruyère mines history and see if there are any lessons to be learnt ,obviously each gold mine is different and the Gruyère mine is somewhat more inaccessible than Malina.
Discovered 2013.
Feasibility study Nov 2016.50% sold to Goldfields in Nov 2016 for 350million AU and 1.5% nsr in return for Goldfields funding the construction of the mine.Construction started 2017,first gold pour June 2019 .has 6.6 million ounces at 1.3 grams per ton.Rated production at 350 thousand ounces per year ,though due to labor shortages ,production currently around 320,000 ounces .AISC sept quarter 1682$, AISC Dec quarter 1973$ .Costs increased due to labor shortages and issues with the open pit accessing the higher grade ore(very common problem with mining).Free cash flow Sept quarter 51.7 million Au ,Dec quarter 13.8 million.
All gold mines are different ,but there are quite a few similarities between the proposed DEG mine and Gruyère .Problems with Cash flow impacts Gold roads ability to fund further share sales of DEG .There cash in the bank dropped by 50 million in the last quarter related partially to this issue.
Costs of building a mine now are way higher than in 2017.Labor shortages are an issue throughout Western Australia increasing costs and delaying construction.It seems to me that the projections in the DEG feasibility study both in terms of timelines for opening the mine and achieving profitability and the projected free cash flow to pay off the debt will ultimately prove to be optimistic.Any problems that develop during this construction page when it begins will be severely punished by the market.I think that the projections that the Malina mine will pay off its 1 billion plus in debt in 18months following production will ultimately prove to be very optimistic given the current environment .Time will tell.
Gold road sold half the Gruyère mine to Goldfields to de risk the project and to bring in a highly experienced goldfield team to build the mine.Interesting comment I think.
In my opinion as a private investor ,there will be no takeover of DEG (gold road can’t afford it)but I wouldn’t be at all surprised if half the project doesn't get sold to a bigger company just like Gold Road did to fund the building of the Gruyère plant .Given the larger size of Malina I would think that perhaps 50% would sell for 500 million Au .Another company I track is reputedly selling its mine ready project in Australia for 20$ an ounce for in ground reserves .
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