the last cashflow report gives an indication of what sort of spending on exploration and development will be next quarter. big plans for this company. every thing the company has done has indicated that this will get into production real quickly.
the bulk sampling of eureka (pending a grade above 4-5 gpt) would move quickly into production. assuming production of 50k oz pa at a cash cost of $300 AUD/oz which is easily achievable by a moderate grade targetted underground opertation, we will see a profit of $26M AUD pa. With a market cap of 70M thats a PE of just under 3. Not bad considering Tubal cain is a monster and the historical grades for both deposits indicate the are likely producers at these gold prices.
Sentiment is bad atm waiting for results. Im happy to wait. held for a bloody long time. a grade ann up around 8gpt would send it through the roof. not because of eureka, but the implication of 2.3M tonnes at 8gpt is close to 600k oz of gold just in the reefs. that excluded the dyke sediments. and the resourse model is also open to much bigger increases.
nearly a million ounces of high grade gold is more than enough to justify production from these two.
im in for the ride. i invite your opinions and critique.
GDR
goldstar resources nl
