EGA having trouble obtaining financing suggests that we have the...

First 206 Last

Share
Profile

Follow
Davisite

18,857 Posts.

5547

26/09/19

07:36

Post #: 40577630
Share

Originally posted by mja ↑

I have been watching the thread with interest. In Luke Tonkin's presentation at the Denver Gold Forum, he states that during the next 12 months, Deflector will be mill constrained for the first time. He also refers to an along strike extension to the Deflector resource. So toll milling at Deflector will likely not be an option for EGA.
Regarding EGA, Luke Tonkin refers to EGA having difficulty obtaining finance as the Rothsay resource does not justify a stand alone operation. He also states the processing plant in the mine plan relies on ore sorting technology, which he believes has never been successfully deployed in high grade run of mine gold processing. With planned yields and recoveries never being achieved. He obviously has a dog in the fight, but he genuinely believes the EGA mining plan may not be able to be successfully implemented even if they were able to obtain financing. An additional reason the EGA board may have recommended the offer, is having an external party quantify the risk of execution failure regarding the mining plan.
I have a small holding in SLR, amongst many other miners. So personally have no interest of note in whether the takeover goes ahead. Just providing some info that is already in the public domain.

Expand

EGA having trouble obtaining financing suggests that we have the wrong board in place. If Deflector is constrained why does SLR want EGA? Maybe it might be because for relatively little capex they could upgrade the Deflector plant to handle the Rothsay ore.

Rothsay can be mined with or without ore sorting. The original PFS was based on not ore sorting, while the DFS was based on ore sorting. The economics between the two were not enormously different, but ore sorting if it works would reduce some of the difficulties with mining. It would certainly help the economics with trucking long distances.

What sane board would rely on the bidder to quantify the risk of execution failure regarding the mining plan?

EGA Price at posting: 30.0¢ Sentiment: Hold Disclosure: Held
6 Upvote

1 Great analysis

Reply