Projects at the PFS stage still carry a lot of risk – both technical and financing. I have witnessed projects fall over on both counts in my time as an engineer in the resources industry. However, the good projects can be extremely profitable for investors - the good ones will get funding, joint venture partners or be bought out by a big player. I believe GGG has a serious chance to be one of those projects for the following reasons:
- The PFS results show a Tier 1 project - great NPV, low operating costs and blue-sky mine life / expansion possibilities. It is a strategic asset and one expects very strong interest from the big players (either in a joint venture or buy-out) once the political risk is removed. - GGG have a solid process design for a project at PFS -few investors can appreciate the improvements made to the process development to date. Their technical team looks strong (from the write up on the website) and have done well thus far. - The management seem keen to avoid large capital raisings moving forward. I was particularly impressed with how they managed the Rimbal buy-out while minimizing shareholder dilution.
Cheers,
Steve
GGG Price at posting:
28.0¢ Sentiment: Buy Disclosure: Held
