PRX 0.00% 0.2¢ prodigy gold nl

nothing to do but wait, page-7

  1. 14,432 Posts.
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    "I'm not a Fundamentalist but I do find it intriguing that announcements recently have had little or now no impact on the value/price of this company."

    There is a difference with value of this company and sp.
    Sp often does not reflect the value.
    Value can be added while the sp stays flat or even drifts down. We have seen that over the last 9 months.

    I'll stick to my view that the news since last May has had a very significant effect.
    The sp is down only marginally relative to very large falls for most of ABU's peers.
    Without the positive developments at OP starting with the high grade jorc, scoping study and then exploration results, I would bet that the sp would have dropped to well below 2c by now.

    If ABU still only had Buccaneer which at the time was a low grade bulk mine proposition, the market would have asked the same question of ABU as they have of other explorers;
    How will you fund your project?
    In Buccaneers case, a large bulk scale lower grade mine. That has changed only very recently with a higher grade resource now also defined at Buccaneer.

    Some have asked the question of funding but ABU has the answer well covered with OP and especially now with GH.
    Thankfully cash in hand is sufficient to fund the trial mine and the trial mine is of sufficient size and grade to fund low cost expansion, especially now thanks to GH.
    At 15tphr the company expects to process 10kt over 5-8 weeks in trial mining.
    Running at 80% it would be 5 weeks. The cost of the plant will be repaid on sale of gold produced (sale of the gold to occur after the ML is granted).
    Once ABU has a ML, assuming the plant is running without expansion and they process GH ore first during commercial operation;
    GH resource 34kt at 45g/t containing 49koz – I believe that was all to indicated status. At such a shallow depth and at that grade, you would expect close to 100% of that will be mined.
    It will take only around 17 weeks to process at 80% capacity of the trial plant.
    Assuming 90% of the gold is recovered, that’s around 44koz or $70mill revenue.
    At 45g/t from surface to only around 50ms and with good widths, cash costs should be well below the $500 used in the scoping study which assumed 10.5g/t ore to 100ms depth. GH has much higher grade and much lower strip ratio.
    Assuming probably a very conservative $400/oz total costs leaves cash profit of $53mill.
    17 weeks is well below 6 months so there will be less than 6 months worth of admin/exploration costs etc to come out of the cash profit.
    $53 mill would easily fund any gravity plant expansion, cover 4-6 months worth of admin and exploration and still leave the majority to build the bank balance.
    Once the plant is expanded, the bank balance will simply keep growing and quite likely so too will the resource.
 
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