Another way of looking at this debate is to ask what NXM might...

Another way of looking at this debate is to ask what NXM might be worth if RELENTLESS Tim’s prediction is right that the deposit currently is no more than 500,000 ounces. This is at Crusader-Templar, I’m assuming.

Hopefully that’s on the (very) low side. But if I’m NST, and I have a production plant within a few kilometres, and I know the ore is pretty much the same to what is already going though the plant, and I already have haulage roads running within a few hundred metres of the ground, what is that mineralisation worth to me?

There’s a lot of capex already expended to set up their pre-existing operation, so costs are going to be the ones related to mining and haulage, mostly. A lot of general and admin costs can be spread over the newly purchased feed to the plant, as well.

If gold is at A$2500 plus what am I going to be prepared to pay for those ounces, when much of my fixed investment has already been made?

Other posters can give their view, but I’d hope for $150-200 an ounce, at least. At the top end of the range, even 500k ounces then comes in reasonably close to the current valuation.

Even if that range is too high, how do you price in the chances of the discovery being bigger, or if Paint comes back with good results, or if NXM really have got a handle on the alteration zones that helps to find more mineralisation in discovery efforts elsewhere.

All of this is speculative and there’s a fair chance that the share price drops away from current levels. But on NXM’s current funding and recent discovery success, I think the bet is weighted more than reasonably towards the return than the risk.