I have been thinking about this for a while and trying to work out the best growth strategy for us (weather organic or inorganic) and the role of other companies in the Murchison region.
For start, WGX said in the financial statement for FY26 that they are targeting 15koz-30koz production from 3rd party processing. So far, they only got ore from NMG. I believe they get 15% payment of the gold. NMG says they are looking at 30-50kt per month or 360-600 kt/a ore shipments to WGX (note, they have not started yet!). Even if they meet the annual rate, they will generate 45.150koz-75.250koz which would result 6770-11.300oz for WGX. Way below their guideline!!!! (I simplified the numbers slightly but should be within the ballpark)
This led me to the basic thought of weather WGX is lying to their shareholder or they plan to get ore from elsewhere....
As far as I am aware, GBR is not ready to get into production this FY or at least won't be able to contribute much to WGX.
Leaves only us.
Why do I believe management is working on a deal? Several reasons
1. I think Meeka might struggle to meet guideline. Tunburry South only has a head grade of 1.4g/t compared to the 3.1g/t avg. While St.Anne seem to meet the head grade, Tunburry South was the first pit to be mined and would have a significant impact on the first and second quarterlies. Those will be crucial for SP performance. 2. Additional OP mining fleet have been mobilized and Andy Well Underground mining bought forward. I have not read the mine plan in a too detailed way but surely, they must produce more ore than they can process at the moment. Are they just stockpiling the lower grade ore?
IMO, Meeka should/will sell high grade ore from Andy Well to WGX. That would help us to exceed production guidance by miles and create extra cash that we could use for a mill expansion or further M/A.
Talking about M/A, as much as I love Meeka, I am a bit worried about their land holding. We don't have that much ground and if you check on WAMEX, a lot of it has been tested with very limited success. The generated cash from selling extra ore to WGX could put us in a great position to acquire GBR with their deposits and land holdings.
Love to hear feedback and what you guys/girls think.
MEK Price at posting:
15.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)