Mount Celia ~$287M EV for $7M MC - based on $2,171 AUD/oz price and .005 SP

Hi All

Just throwing around some numbers and info related to the Mt Celia project, which both long term and new holders regards as the central project. The below excludes all other projects, including the Northern WA gold projects and the Iron Ore reserves we have. I have been quite conservative on the numbers, and will unpack the OPEX over the coming days in a more detailed post.^#

Summary: $278M EV for $7M (SP:.005) is amazing in anyone's book, and spells great news for long-term holders, and new investors.

Base case for Mount Celia 184,100 oz Gold Mine (at current gold prices).

Pit modelling for he major Mt Celia ore bodies was completed in October 2018. On that model, just the Kangaroo Bore and Blue Peter reserves sit at 133,000 (1.48g/t) ozand 51,100 (2.62g/t) oz respectively, for a total of 184,100 oz.

The Mount Celia project is a few kilometres below the current Anglogold Ashanti exploration activity (ASX:AGG), some 40km south of Sunrise Dam 8Moz resource, and I noticed that OreCorp (ASX:ORR) have just applied for a large exploration area 7km South West of us just last week.

Gold is currently $2,171 AUD/oz. I will use that, although we all likely have a similar view on the price trajectory into 2020.

On an estimated process rate of 1,135,733 tonnes per year, Mt Celia (KB and BP) will return 61,366 oz/annum. If we assume that OPEX/transport costs will be approximately$1000 AUD per oz (given the resource and area, it’s likely to be much lower) that gives us revenue of $399,676,758 ($133,225,586/annum) minus OPEX/transport^# of $184,098,000 ($61,366,000/annum) for an EBITDA of $215,578,758 ($71,859,586/annum).

Even at a conservative x4 EBITDA valuation, that gives an approximate EV of $287,438,344.

A ~$287M EV for a $7M market cap, excluding all other projects, isn't bad at all.

And, every $100 increase in the AUD gold price obtained increases the EBITDA by $5,216,110 and the EV by $20,864,440.

While this doesn’t account for funding/possible JV costs, it also doesn’t account for further finds (RC drilling is currently continuing around the area by LCY, or an expansion of the pit post-commencement).

Next steps at Mt CeliaI poured over the last few years of reports to help any newbies.

The Annual Report and Quarterly Activities outline that a further upgrade to the existing resource at Mt Celia is the company’s primary aim. Legacy is focused on updating the geology, pit optimisation and resource models at Kangaroo Bore, Blue Peter and Mount Celia in 2019 as it is the flagship project.

New results that came in as part of the October 2018 drilling(approximately 2,200m of RC drilling [21 holes]) were still being analysed at end of Q2 (470 samples including 43 QAQC samples), with “numerous samples” returned with “significant mineralisation” which “at many places increases the overall length of the mineralised intervals.”

In addition to this, on last sole Mount Celia update (Feb 2019),further RC infill and diamond drilling were being progressed in 2019 around Mount Celia, and were imminent at Sunrise Bore. Importantly, all remaining resource upgrades at the larger South Laverton Project (which includes Kangaroo Bore and Sunrise Bore) are also yet to be completed (ie. Blue Peter, Yilangi, Yerilla,Patrica North etc see Annual Report) - and the proximity and accessibility of additional assets/ore bodies should not be underestimated. Further Q3 2019 Yilgangi drill results should also be announced in the coming weeks.

Importantly, the next announcements for Mount Celia will relate to the updating of the “overall” resource size and the “confidence to a higher JORC code category” for several of the ore bodies (Annual Report), noting that the Company reiterated in that Report that “there remains significant potential to define additional mineralisation at Kangaroo Bore, particularly at depth, as the testing of the northwest section was not (at that time) complete. Further “numerous early stage targets had also been identified with potential for subparallel mineralisation within 100m of the Kangaroo Bore.

So, I hope that helps the new players, and thanks to the long term holders for some posts that helped me with the progress of Mt Celia. Good luck to all, and I will provide more extensive OPEX calculations/assumptions later this week.

: )