GOR vs CMM comparison.

FYI... (posted this on the CMM threads and thought some might find it interesting). It was a reply to a fellow CMM holder, who views CMM as having greater upside etc.



That is actually a great question regarding DEG and their Hemi project, versus Mt Gibson.
Well.... on paper it should be DEG pouring gold first (though clearly you disagree, which is totally fine!). They have already completed a PFS, with the DFS due mid 2023 (my guess is June/July). CMM have.... no reserves booked for Mt Gibson yet and no DFS etc. They are coming I know, but... if I look at what has been completed to date... Hemi comes first? Mt Gibson is on a mining lease, so they have that advantage.

From a very simplistic viewpoint, DEG look to be able to secure approx 70-80% of the funding they require via debt. CMM has the advantage of likely only requiring a small debt facility (in terms of funding anyway), if any, though they are quite prudent so IMHO, will have one no matter what.





Then, we have a clear timeline from DEG. Interestingly, there are ZERO gold projects being built in Western Australia right now. Higher rates, market gyrations, inflation have all caused almost all developers to simply go back to the drawing board and drill. Just look at what happened to BDC, or even AUC recently. This bodes well for both DEG/CMM in terms of costs... which I believe are stabalizing/reducing.




Probably 3-4 months away from DEG turning first dirt.

Interestingly, after spending an hour or so reading through announcements, I think.... it's officially a race! (though, as mentioned, after spending a bit too much time on this post, I think CMM could be more nimble, even they start from behind, plus their project is smaller than DEGs plant, which simply means a lot more earthworks, construction etc). Both companies will spend big, though... probably not to the same bells and whistles that BGL has done (gold plated anyone?).

CMM had planned to release their maiden reserve for Mt Gibson in the December Quarter 2022, as per the 11th Nov release.


This then evolved to a release as per the Jan 30 Quarterly, into the March Q.


But... that deadline has been missed (though potentially could come out tomorrow I suppose!). All I am really saying on this point, is it pushes out the study timelines, which logically, would push back construction etc.

In any case, this is the timeline CMM initially provided the market back in March 2018. However... there was a lot of ruckus after that due to board changes etc, which as far as I can remember (and from the reports), it caused a full year to be wasted. With development not really starting until Dec/Mar of 2019/2020. Suffice to say, I view DEGs timeline as basically being a mirror for Mt Gibson, with some variations of course (which hopefully if CMM actually provide a clear timeline for Mt Gibson, will enable us to compare). It basically took 15-18 months to get from first dirt to gold pour. Which seems to match DEGs pretty closely.

Interestingly, as far as I can tell, this timeline was the only one ever provided by CMM. After 2018, they never gave one.



I think in some ways CMM starts from behind, but... because they prefer to do more inhouse, they will find ways to remove/shorten some stages.

Not really going to argue your point about the boards and their respective holdings/sizes. It is what it is. How much % do the boards of BHP hold compared to total? BHP shareholders have done incredibly well over the decades.

I think CMM board are better, but... GOR in their own way, have been very savvy.
I think you are painting a very broad brush on GORs board/management though, some may not have the financial muscle/success that the CMM came with when they came to Capricorn.
Having gold fields run the project has basically meant they have dodged the huge issues many developers faced. Then.. they moved on DEG. CMM and GOR are basically going separate ways in terms of project size.

CMM are happy with 100-130k projects.
GOR is going for 300-600k projects.
In the end, quality of project trumps most factors, and... GOR interests are in what I believe are on balance, better than CMM due their larger production profiles, longer mine lives and economies of scale, plus... being more easily invested in by the big end of town, which happily pay a premium for (and yes.. CMM is already receiving a premium for its running of their mine).

Yet ironically, on a paper, both companies are very very similar when you look at what they currently have.
CMM have 12-135k p.a.
GOR have 160-175k p.a

CMM have Mt Gibson with at a guess, 1.5m ounces of reserves and a production profile of 120k p.a
GOR have 20% of DEG, with... 5.1m ounces in Reserves, of about 1m ounces of reserves, with a production profile of 105k p.a.
Also, both basically have around 5m ounces (either directly, or though DEGs %).

CMM have to fund 100% of Mt Gibson.
GOR technically, don't have to fund anything (though I imagine they will have to invest more capital), but... proportionally less than CMM is my guess per ounce of production.

You seem negative on dividends, yet.... pretty sure CMM management are holding their shares because they want to receive them in the future, versus shorter term capital sales (otherwise they would have been selling, though of course they are wanting both really). GOR rightly paid a dividend, they are debt free, have very low capex requirements for a few years to come all the while building a position in DEG.

Not sure how I am flapping.. AIC and AISC are the most used and accepted metrics for costs used within the sector.

Regarding the hedging, I am not alarmed, just being factual. It is important. As whilst GOR did have hedging, it now is hedge free and will see a very nice jump in the average price being received for 100% of its sales. CMM has hedging out to Sept Q 2025 and the simple reality is, that its missing a large amount of upside on the price of their gold being sold (approx 44% per quarter).


In the end, both companies have a great future.
I only have a small holding in CMM, as I have slowly moved my capital to stocks I view having more capital gains upside, though... with that comes execution risk which CMM does not have.

As for BGL, I have been very wary of them. They are happy to gold plate everything in their project. They are smart though.
Having done 10km of development already U/G! Huge huge amount of pre-production, but.. it will likely mean they have a smooth commissioning and hopefully for its shareholders, a nice re-rate if their grade & production numbers are hit. As they are basically trying to be CMM, but pure U/G.

So... you final question was who has greater upside.
If I base the question of what is known (no more exploration upside etc etc).
GOR by a nose. Its current mine is similar to CMMs, just bigger... currently more mine life, plus extensions likes (yes, both projects have it), but.. GOR gets 175k p.a from it, CMM only get 125k.
Then you have the two assets they own. CMM - Mt Gibson, looks great, albeit slightly lower grades than the current deposit. Similar production profile.
GOR (DEG holding), offers slightly less ounces 105k But... Tier 1 project.

CMM - 250k by 2025
GOR - 280k by 2025