sorry, but I disagree with you about Wayne and what he has done to resurrect WGX (to be clear, he has been pretty candid about how many issues the company faced when he took the helm....). Why do you say that WGX operations are low grade? Average grade is around 2.5g/t. Which I think compares pretty favorably to other like operations? As for the 2 new mills that are being acquired, one of them was literally bought to increase throughput instead of upgrading the Higgin plant (was able to bring forward throughput by almost 2 years versus the expansion), the grades... coming out of Beta Hunt are not low and Beta is basically going to fill 70-80% of the two mills in the near term (could eventually be 100%).
Funnily enough, the grades at Beta match WGX current production grades, as this asset is basically a bigger versus of Big Bell. Sure, the current reserves are small, but.... Bluebird U/G is even smaller, but the main feed for the Bluebird plant.
What is interesting is how low cost Beta is already, before further expansion of tonnage (and potentially higher grades).
Regarding synergies, I think you need to take a step back, WGX doing their U/G mining in-house. This will create cost savings. Also, plain as day, total removal of overseas admin etc. Plus, WGX has unused equipment which can be sent down to Beta.
I think the break fee is to try and stave off RMS. Simple as that. Not often Mark Z at RMS does not get what he wants....
As for the fourth Q of FY24 for WGX, it is likely to be at best, be around 50k, but... that will dramatically change just after the merger completes, with Big Bell and Great Fingall kicking in. Which should complement Beta Hunt further ramping up. Not that everything can go to plan.
Sure, a higher POG is saving WGX, but... it's making almost all the producers look good, perhaps even 'sagely'. Hopefully in 12+ months time, you might view what has been announced today in a different light. I was initially hesitant, but as discussed, perhaps because of my focus on solving WGX short term comings. WGX cash pile is getting a major work out, but... at least it's being used to build a 500k p.a producer wholly focused in W.A, 100% unhedged.
As for who is coming out better... hmm.. I do agree somewhat, Karora shareholders are getting a good result, albeit their internal growth is slightly better than what WGX has on hand currently. I think together the assets make sense, corporate wise, the company will be clean... no debt. Able to fund all their internal growth plans and not needing to look for any large deals, 5 plants and 6-7 U/G operations is a very clean understandable set of assets.
I mean... the E/V will sit around $2 billion AUD. Compare that with GMD.... CMM... EMR... RMS.... all will have far less ounces and I believe, far less reserves.
Interested to hear yours and others views on potential comparisons once the company starts producing 100k per quarter.
Finally.. Loki, why was RMS trying so hard to secure Karora?
I do think that WGX smaller neighbors will be seen as slightly less exciting in the near term. Hopefully they can raise a good amount of cash whilst sentiment is high and really undertake the sort of drill programs that will get the market interested.
WGX Price at posting:
$2.27 Sentiment: Hold Disclosure: Held
(20min delay)
