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1.3¢ octagonal resources limited

In your scenario I agree. However there are a few moving parts,...

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AverageJoe

41,945 Posts.

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11/08/14

21:27

Post #: 13801828
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Originally posted by JID ↑

yeeew87,

The issue is what the grade of the reefs are. If they can show the grades are higher than what the initial ore reported (3g/t) then they will be able to raise money - admittedly at a very dilutive price. If the grade turns out to be 3g/t ORS is toast as the mine will be unprofitable and there will be no scope for a capital raising. That's the risk here ...

It's a binary outcome in my view. If the reefs grade at 6-8g/t headgrade to the mill then the company is worth more than the current EV of $4.3m. If it turns out to be 3-4 g/t then ORS will not be worth anything - a stranded old mill and two uneconomic, small gold deposits. Maybe worth a little as an option on a much higher gold price in the future ...

Cheers
John

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In your scenario I agree. However there are a few moving parts, the last dice is the 1080 sample ores have to be economical based on the POG at the time which is 3-6mths away. I am not even gonna predict where POG will end up by tonight let alone 6 months away but I reckon a lot of things will happen in the interim.

ORS Price at posting: 3.0¢ Sentiment: Buy Disclosure: Held
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0 Great analysis

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