macmin potential

If you are are Gold & Silver and Macmin bull like me then the next several years should be most rewarding.

One thing that worries me though was Friday`s announcement of funding the Silver mine by equity.
How much will the new mine cost?...I checked out old announcements and found a figure of $8 million quoted...that was several years ago so I am guessing current cost will be in the order of $10-12 million.

MMN already have an equity credit facility with Cannacord for upto $10 million and will have drawn about $4 million of this by end 2004. That leaves $6 million free to use for the mine. So they will need to find another $4-6 million. All up they will probably end up issuing another 50-60 million shares to fund the mine.

I sent the Board an email yesterday suggesting that it makes more sense to try and get the options exercised in 2004 by offering some incentive to exercise early i.e. exercise for 9c instead of 12c, rather than issue more shares. That way you have better value for everyone. MMN needs the option cash in 2004 rather than 2005 and raising $8 million now from early exercise of options will mean 40 million less shares on offer in total for MMN when the options currently are due to expire in Sept05.

Regardless I just want them to get the mine built and start earning money. The Gold/Silver bull is still in it`s infancy. MMN shares will be worth big bucks by the time this baby reaches it`s prime.

By the way, I notice a lot of MMN posters are focussing on MMN as a pure Silver play. MMN owns 40% of NGG with a 1% royalty on NGG`s gold production and with an option to increase it`s stake in NGG if NGG starts producing over 50,000 oz of gold p.a.
NGG is getting ready to produce about 40,000 oz p.a. next year. It is also actively exploring several other exciting prospects in PNG. It has also farmed out 2 of it`s prospects to Vangold and Celtic Minerals, keeping 25% interests. The Feni farmout to Vangold has the potential to really rocket MMN over the NEXT FEW WEEKS as initial drilling results of a previously untested IP anomaly are due to be released by VAN. I have done quite a bit of research on Feni and feel it has an excellent chance of holding more Gold ounces than it`s neighbouring island, LIHIR. And if I am right, we will find out within the next 2 weeks. If Feni turns out to be as big or bigger than Lihir, and MMN effectively owns 10% of Feni, you can see the potential... MMN could be making a lot more from it`s holding`s in other miner`s than from it`s own Silver mine. So don`t give away your MMN.. they surely will help you retire early one day soon.