Today's announcement that Metals Exploration (MLX) has acquired 3% of TAM is I believe significant having in mind that their original CTP JV agreement was rolled by NST in 2015. I have a feeling that NST have now realised that they are unable to acquire 100% of the project and that working with the capital restrictions of a small JV partner probably makes the project unsuitable for a large project player like NST.
MLX know the project really well and have have a significant cash holding of $115 million so they are certainly in a position to buy out NST's 50% interest and provide the capital to allow a much faster ramp-up of production (12-18 months?). In its original CTP JV proposal in February 2015 MLX stated:-
The majority of the previously operated 1.2m tpa CIP plant and associated infrastructure remains in place but requires modest refurbishment and additions to bring into working order.
In particular, the Groundrush ore system is large, high-grade with magnificent metrics for underground mining at high production rates and very competitive costs. There remains significant plant and infrastructure in place and a rapid re-start of operations is possible.
If this proves to be the outcome and it retains its 50% interest, TAM would instantly be upgraded to a mid tier producer of 75-80koz pa holding 1 million oz of well drilled and open ended resource plus years of tax free future earnings due to its significant accumulated tax losses. IMV TAM is by far the cheapest and lowest risk gold stock on the ASX!
DYOR
TAM Price at posting:
3.8¢ Sentiment: Buy Disclosure: Held
