MGO, as predicted, has allotted stock from the most recent, and probably final raising before project development next year.
A few very discerning people have positioned themselves very cleverly. Read on to find out why.
Firstly, Marengo has recently executed contracts for five drill rigs to carry out an expanded deep drilling program into the new year.
I recently incorrectly stated that MGO will be adding to resources from approximately 30,000 metres of drilling since the last published resource (Q4 2008).
I was wrong. The figure will be derived from an additional 45,000 metres of drill results, which includes drilling from the second half of calendar 2008 and throughout 2009. (The 30,000 metres was from calendar 2010 only).
The market may have missed this.
On another matter, in one of his most recent presentations, Les Emery mentioned that MGO would be producing 300,000 tonnes of copper per year. This is about double the amount Equinox is producing annually.
As Marengo only calculates copper and molybdenum in its CuE figure, gold, silver and rhenium credits would be in addition to the number referred to in the presentation.
Anyone care to do the math on 300,000 tonnes of copper per annum? Marengo should be pulling the stuff out of the ground for between $2,000 to $2,700 per tonne before precious metals credits. The DFS due in the next month or so will confirm the extraction costs.
Marengo right now:
Cash heavy, resource upgrade due, DFS due, financing may be announced concurrently with the DFS, agreement with NFC to finance 70% of capital requirement (will be using the same Chinese bank as Ramu Nickel), deep drilling continuing to deliver significant results, copper price rising to new highs, copper market tight, quality long term shareholders continuing to buy, high quality copper and molybenum product with the lowest impurity levels globally.
Derisked - massive.
Now is probably a good time to realise why MGO's major shareholders were very, very insistent on the company undertaking the recent raising at this time, at this price.
I hope I'm not considered to be ramping, but I must say, in all the years I have been involved in the market, I have only seen a handful of examples of the value proposition MGO offers. Every day that goes by is a step closer.
All the best, and a big thumbs up for Christmas.
MGO Price at posting:
32.0¢ Sentiment: LT Buy Disclosure: Held
