NXM the next multi bagger, page-1185

I'd recommend shareholders contact NXM directly with any concerns - I've always had prompt engagement and willingness to answer reasonable questions.

Disappointing that the SP is down but appears due to lack of announcements since the beginning of the year + putting Pinnacles on the backburner for now (this is not necessarily a bad thing - refer below). SP is the most accessible measure of a company but is often inaccurate due to the influence of investor sentiment - people get bored with periods of no-news but fluff announcements will only lead to a pump and dump. IMO the company's underlying value has increased between 9 November (SP top at 21.5c but lower share float) to now.

Given 14,200m of drilling (RC and DD) was commenced in early March and only the first 1,200m of DD assays received, I'd expect consistent news flow for a number of months. As plenty here have touched on, previous results from Crusader / Templar are highly encouraging and this drilling will help sure up what is between 150m - 300m over a large portion of the 1.4kms of strike.

NXM has also discovered genuine ounces at a low cost - to achieve this, the team must be getting their geological thesis correct and this bodes well for the current campaign. Andy mentioned in his recent Proactive interview that the 500m deep hit was close to their model and gives greater confidence of their 150 - 300m deep targets.

I agree with @goldfinger$$ (https://hotcopper.com.au/posts/53657447/single) that the resource will end up as a few 100k oz at a minimum. NST / SAR has never used any other companies' ore through Carosue Dam (which may be why Pinnacles was dusted for now) and I understand it is currently using feed which won't maximise free cash flow. At the moment, Pinnacles is probably too small for use at Carosue Dam (given the throughput) but this may eventually change - Andy and NST board members were at the Sydney RIU conference recently, I have no doubt they would have discussed the region's potential .

Alternatively, NXM may consider using Pinnacles ore for its own processing if Wallbrook is proved economic.

Back of envelope calculations:

Cash of $10.23m at 31 March
Drilling costs for entire 14,200m program = $1,200,000 for RC and $840,000 for DD (estimate on industry standard rates - call a drilling company or extrapolate previous campaigns)
Lab cost and administration expenses = $500,000 (very rough estimate)
Current cash = $7,690,000

Given exploration / PFS undertaken to date, Pinnacles could be sold for somewhere between $4,000,000 and $5,000,000 (shallower resources valued between $75 and $125 per oz and deeper resource at $50 per oz given good grades).

Wallbrook would attract a similar value although, current resource (85,000 oz) doesn't account for any June to December 2020 drilling results.

MCap = ~$19.5m at 8 cents
EV = ~$11.9m - $4.5m for Pinnacles - $350k from GIB shares (arguably Bethanga has nominal value too) = $7.05m for Wallbrook (IMO cheap given its size, results and the ~$4m pumped into the project by the end of this campaign).

All of the above suggests:

• Strong balance sheet;
• Tight capital structure - no 'hidden' unlisted securities;
• Majority of expenditure is focused on exploration which has achieved results at low cost;
• Credentialed management with a historic understanding of the area;
• Assets in a tier 1 jurisdiction known for gold mineralisation, close to infrastructure and strong relationship with NST;
• 3 months news flow coming with further drilling to then be planned + MRE update likely Q1 2022 - last time news flow like this happened, we hit 21.5c.

Obvious dumper can stay while I look to get some profits from elsewhere into NXM. Not advice and my opinion only - do the work to get the reward.