Quite the value proposition

Most companies with 1.5moz in the ground seem to be going at $80-$100m MC. Here is GBM at $40m MC with positive CASHFLOW coming in and being ramped up. Now add….

-Malmsbury JV with NOVO (positive early signs and Fosterville similarities, fully funded by Novo and $2m to be spent this year)

-Further exploration in the basin to add to current tonnage – bring on 2moz and above

-Assets now acquired through Yandan pickup (mining leases, utilities etc)

-Cloncurry JV with Nippon (fully funded by Nippon)

-1.5m shares in Novo worth approx $5m

-Mount Morgan partnership soon to be formed, on its own could give a junior $20m or so market cap so definite value here.

I’ve been doing some reading on White Dams history and it used to be an absolute cash printing machine. In 2011 for example at a gold price of $1600, Exco and Polymetals produced 65,000t for about $80m in FCF. Very rough and conservative numbers but here goes…

Current leachableoxide material – 59,000ounces, 2 years or so at recent throughput.

Revenue – $133m (based on $2260/oz AUD)

Opex – 2011 annual production by Exco and Polymetals of 65,000 ounces came at a cost of $400-$600. Recent announcements by GBZ state costs of $1600/t AUD in 2016/2017 which was higher due to copper impurities which are now being recovered, probably lower grade and poorer strip ratio in there too. Also significant savings on cyanide as they have recently mentioned. For the sake of this exercise use a hefty $1500/t but with Rohrer overseeing it you would be quietly confident of lower.

That leaves FCFof about $45m or $2m a month cash in hand.

Will be interesting to see what drilling brings up at White Dam to potentially add tonnage to inventory. White dam resource aside, this sentence got me pretty excited though…

“A gold recovery plant with the ability to be relocated to GBM’s 100% owned Mt Coolon Project to support its possible development (should GBM exercise its option to acquire 100% of the White Dam JV)."

Bring on 2021 forthis way undervalued gem with management who have skin in the game and a clear strategy for success.