Hi trax,whilst I strongly disagree with you about GCYs recent...

Hi trax,
whilst I strongly disagree with you about GCYs recent performance (lower AISC than every single one of its peers last year/early this year), I did spend a little time trying to ascertain just whether WGX has been explaining to the market why they want more processing capacity.

It would seem they have been....
(I find it hard to fathom why Great Fingall has not seen a much greater focus on U/G operations though..?? The MRE seems particularly impressive).



Not sure if you have really dug deep into GCYs financials. But... they are basically the lowest cost processing plant in Western Australia....
$12-14 per tonne. Many newer plants are double that, or even higher. Dalgaranga is a big, hungry plant. WGX can see lots of benefits to grabbing it. Firstly, they have multiple deposits waiting to be opened, plus U/G, plus... other tasty options for future consolidation like MGV.

The plant is running now. With just 20% of its feed at higher grades, it will be producing 100k p.a. That suddenly brings WGX production profile from 270k+ p.a, to a lot closer to 400k. All with an E/V of under $800m (assuming some sort of deal gets done).

WGX plants are basically now full with ore.... so... they need more processing capacity. They could indeed go the route of expanding current plants, but... they still won't be as cheap to run as GCYs. Plus all the capex, time etc required.

I have to wonder when WGX will increase the offer and make it unconditional, as otherwise, there is still a risk that GCY/FFR deal goes ahead. GCY holders will need/want to know that WGX is not going to pull the offer later etc.