In August 2010 DAU purchased the Plutonic Dome tenements from Barrick Gold Corporation. Consideration was $550,000 cash, 3,400,000 ordinary shares and options since expired. It was paid out of an initial float at the same time that raised 22 million most long since depleted. It now has a current market capitalisation of 1.67 million. One has to ask why is DAU giving away 75% of an asset it has spent many millions on and if Plutonic Dome’s so good why has DAU’s market capitalisation been so low?
DAU state the ORD deal will significantly reduce Dampier’s project holding costs and closure liabilities, which is considerable. For instance, the bond for mining rehabilitation alone cost DAU $2 million in 2011 and over $3 million in 2112. Could this be one reason, its high cost to develop and mine (underground) another?
One final thought Barrick is one of the world’s major gold producers and would not have sold for a pittance without careful consideration. Particularly, as it had an underutilised gold processing plant nearby and the then gold price was about what it is now and rising.
VAN Price at posting:
0.5¢ Sentiment: LT Sell Disclosure: Not Held
