Hi
@randosmit
I think it is prudent for you to bring back into focus the value drivers behind why we have all invested in Bassari
It is particularly relevant with the Rights issue with the free attaching option as some newer investors may not be sure what it means and whether they should participate or not.
GIANT DISCLAIMER _ EVERYONE SHOULD CONSULT THEIR OWN FINANCIAL ADVISORS AND DO THEIR OWN RESEARCH BEFORE INVESTING
So I'm recycling some previously posted info and updating here for any that are new in the hope that it does provide as honest an update as I can provide.
Why invest in BSR and what is not factored in to the company’s current share price?
In discussions with the executive after the AGM had finished the following were the most important points.
- The existing project, Makabingui, is stated as being a 1Million Oz resource, however, Alex advised that Makabingui is actually what their geologists believe is their 7th best gold target.
- The only reason they drilled at Makabingui first was that there was an outcrop at surface where they could see visible gold so they drilled there first – and they stopped drilling when they had achieved a JORC compliant resource – they believe there is much more gold at Makabingui itself but they did not want to expend shareholder funds and dilute the shareholding any more than necessary and prefer to wait until the plant comes into production and then use free cash flow to conduct additional infill drilling.
- Alex advised that their UK geological team really believe they have some “Monster” gold deposits which are yet to be proved (Konkouto and Makabingui South in particular).
- Konkouto is the No 1 prospect. Limited drilling has been conducted so far but already has outstanding results which have confirmed the geologists modelling and identification of a series of stacked gold structures. The Konkouto project could host several million ozs of gold. The geologists have taken soil samples over an 8Km x 8Km area (64sq km) which has contained gold throughout the whole area. Only a few thousand metres of drilling has been done so far – the geological team suggest that it is so rich that 100,000 metres of drilling would be required to do it justice. The company has completed “Resource Definition” drilling at Konkouto Hill with the aim of proving a JORC 2012 compliant resource and making application for an exploitation permit for the Moura tenement that hosts Konkuoto.
- In order to make an application for the Exploration permit to be changed to an Exploitation permit (which gives the company 9 years to drill it and convert to a production permit) a minimum 100,000 ozs of JORC compliant resource is required – Post AGM note: The company has made this application for the conversion to exploitation permit as this minimum amount has already been achieved with the limited drilling conducted to date.
- Makabingui South is rated as the No 2 prospect. Drilling has only been conducted every 400 metres and the gold strike zone extends for about 12 kilometres. The company believes that Makabingui South may also be a Monster gold deposit hosting several million ozs of gold.
- There are then several other prospects, all with very rich soil sampling and artisanal workings throughout the rest of the tenements
- All of the new prospects are within trucking distance of the existing plant.
- The revised Makabingui feasibility study has been done after extensive additional infill drilling and has not only verified the original estimates that the economics are based on it has increased them (the infill drilling has identified the structures and veins that will be mined first for the best cashflow – and it has shown that there are even higher grades than the original feasibility study showed and that they are open in multiple directions.
- The economics of many projects are considered exceptional if they have an IRR of greater than 20% - the revised feasibility study (after far more accurate data has been generated than the original study) provides for an IRR of 188.5% - this is an incredible IRR
- It is also significant that Bassari Resources has been further de-risked by having metallurgical testing completed proving the Konkouto ore is of the high recovery at low cost type. The metallurgical tests conducted confirm that the Konkouto ore is also “Free milling” like Makabingui (high recovery just with crushing and gravity circuit). There are several other gold developers who have discovered Multi Million Oz deposits but the metallurgical results confirm gold recoveries are very poor in comparison to Bassari’s deposits.
- IMHO All of the information detailed above, and from analysis of the share price over the past several years when related to what events have occurred, it is clearly evident that Bassari Resources is now at the point where there is very limited downside risk but very significant upside potential.
I know that many investors are dissatisfied with the time it is taking for progress to be achieved. I also know that the company has done, and will always continue to do, everything in its control to progress as quickly as possible - the stark reality is that this is in an African country where things just do take longer so the choice is to either accept it or move on.
I am particularly pleased that a significant amount of these funds will go towards the drilling at Konkouto and Makabingui South as IMHO the proving of additional high grade, high recovery, low cost resources will have a very significant effect on the share price in the coming years.
Randosmit - in answer to your query re what else should be added to the project timeline my summary is as follows;
1. For Bringing Makabingui into production;
- Contract for debt funding – this will be only for the Makabingui development and bringing Makabingui into production.
- Requests for quotation of major items of equipment for crushing circuit and tailings dam (I expect this has already been completed)
- Placement of orders and subsequent delivery of these items
- Construction of required plant (Peter Spivey already has his team ready)
- Removal of overburden and subsequent Mining would begin 3 months before processing
- Commissioning of processing plant (this is substantially de-risked as it has been operating before and has been on care and maintenance)
- First gold pour
- First sale and shipment
- Drink champagne (management and all loyal shareholders)
Notes: IMHO
The Makabingui initial mine life is 3 ½ years however, as cash is generated and further infill and extensional drilling is conducted I expect the resources and reserves to continue to grow – though there are 4 pits, 90% of the high grade gold is in pits 1 and 2.
The Makabingui infill drilling has identified the veins and structures which will be mined first – these structures have very high grade gold (5.6 to over 7 g/t) starting at shallow depths which will generate excellent cashflow
The Makabingui South prospect is already included in the Exploitation permit – any high grade veins and structures could also provide high grade feed to the process plant.
2. Realising the value of the other main prospects on the Bassari tenements
IMHO The other Bassari value drivers are self evident as they are all prospects with a high degree of confidence that significant gold deposits are hosted. They are difficult to quantify as only limited drilling has been conducted so far, and we must wait for drilling to verify expectations.
Makabingui is classed as the geologists 7
th best target
Target 1 is Konkouto (I am combining Konkouto Hill and Konkouto North as 1 deposit)
Target 2 is Makabingui South (12km of strike and already permitted)
Targets 3, 4, 5, 6 and 8 (not in ranked order) I expect are: Missira, Kawsara, Lafia and Sekhoto
If you want a guide for forecasting future share price I particularly liked the Post 17351767 by Wil on 24 March 2016
I have every confidence in the management and in my investment and have been actively accumulating as much as I can (and have been extremely grateful for the pullback while we wait patiently) in order to maximise my allocation for the Rights issue with free attaching option so I can take up take up the second option in the prospectus;
> all of your Rights Issue entitlement (by accepting the offer in full) and apply for additional shortfall shares (if any)
ANOTHER GIANT DISCLAIMER _THIS INFORMATION IS SOLELY MY INTERPRETATION OF THE BASSARI VALUE PROPOSITION BASED ON THE EXTENSIVE RESEARCH I HAVE DONE
(INCLUDING CONSULTING INDEPENDENT GEOLOGISTS WITH IN DEPTH KNOWLEDGE OF THE BIRIMIAN GOLD BELT), ATTENDANCE AT AGM's AND CONSTANT ONGOING COMMUNICATION WITH BASSARI MANAGEMENT. MOST RECENT DISCUSSION - THIS MORNING.
GLTAH
IO
