I have spent some time pondering the recent quarterly activities and cash flow reports. I make the following points:
(1) "This has been a busy quarter for your company with preparations for the bulk sampling programme ramping up",
This statement seems to reinforce the sense that I got from the AGM that there is a lot of work going on under the surface that is not announced. There is no reason to announce every last detail and indeed it costs money to announce to one, let alone two, markets. Did I hear somewhere that the fee for announcing on the ASX is $1000?
(2) [The Talisman mine access road] preliminary design has been completed and final road design is underway.
Seeing as much of the road is already formed (see pictures of the mine site here) I imagine that the construction process is capable of being expedited or "fast tracked" if you will.
(3) Once complete the company will be in a position to issue tender documents for the full scope of works including earthworks and traffic control requirements.
There's plenty of companies out there who do all of these activities. I am confident that the access road won't be a big deal seeing as the in-principle traffic management plan is approved and now the traffic and civil engineers have developed a plan to build it!
(4) Design of the ventilation airlock to be constructed at the entrance to the No8 Level portal has been completed and costing is underway.
This is one of the more complicated designs because it had to be practically silent from the outside (so as to not cause a disturbance) while doing its important task of ventilating the mine. The completed design and now into costing phase is great – fabrication and installation next.
(5) Preliminary design of [the electrical and compressed air reticulation systems] has been completed and detailed design is now underway.
Great to see them jumping into action now they have funding. I actually had to look up what compressed air reticulation is and my guess is that it is used for pneumatic tools down the mine. Don’t quote me on that but seeing as the shaft will be ventilated I don’t see what they would need compressed air to breathe down there.
(6) This detailed design includes all safety features required under the [Health and Safety at Work Act 2015] and associated legislation and, once complete will generate the equipment list necessary to initiate the procurement process.
Good – compliance with safety requirements is a must and it will be great to hear the next step when they have acquired everything they need.
(7) What else is needed?
I recall in a previous announcement that over and above the steps being taken above, that the wooden supports in the mine shaft will need to be replaced to reinforce the mine. I’m no mining engineer but I imagine that this is relatively straightforward.
So with road access, ventilation, electric and compressed air and reinforcing the shaft being sorted out, what else do they need?
Obviously some form of vehicle to transport ore up to the surface, an explosives bunker, lots of TNT, any other ideas?
(8) Cash flow report
At the end of the quarter, NTL had NZ$6,373,013 cash in hand.
With an MCAP of NZ$12m at 0.6 cents it seems to me that the market is giving a rough enterprise value of $6m for the Talisman bulk sampling project, the Talisman Deeps project and the Rahu JV with Newcrest. Is it undervalued given the very high probability that NTL is about to become a revenue producing company? Well you know my answer is "yes" but I'm keen to see what others think.
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