Just back from last day of the AMEC conference. Had a chance to talk to Les and hear his presentation too. Les is off to Nth America, Europe and UK tomorrow to do presentations and have face to face meetings with various fund managers. As usual he is very upbeat about the company. Main points that I picked up today are...
Les reiterated that SLR (the joint entity) will garner $30m in direct savings and $10m in discretionary savings per year over more than ten years from the merger of SLR and IGR.
He pointed out that post merger, "SLR will have 5000kms of the most prospective ground on the planet". That is more than 7 times the size of Singapore.
SLR are currently investigating the rationalisation of the Lakewood (SLR) and Randalls (IGR) mills. A possible scenario will be that the Randalls plant will be upgraded to maximise production throughput and head-grade and utilising a mix of the already available IGR stockpile. Lakewood will then be in a position for dual use for Mount Monger and Phillips River ore when that comes on stream.
Phillips River will not be pushed back further due to the IGR takeover as Les sees IGR as a relatively easy bolt on operation. He still expects Phillips River to start producing in about three years but will not rush it until they have identified a big enough deposit to accommodate production of 100koz.
Les is confident that Haoma will produce some very good surprises down the track and at this time next year Haoma's total resources may be up another 500koz.
He also reiterated that he expects copper credits will reduce the cash costs in the Murchison by $300. Very important for the economics of the project.
One other thing that will interest some on this thread is that Les, for the first time used the "D" word. I asked him what he is going to do with all the cash SLR will be generating in the future and he said "we are looking at generating $200m free cash-flow pa a few years out, we will not accumulate cash for the sake of it. He said he could perhaps see a return to investors of maybe 10cps and then a fixed percentage of free cash each year thereafter. An interesting change of tack as the company matures.
Les said he is very satisfied with where SLR are placed as a $1b company and he is determined to turn it into a $2b company following the Regis Resources pathway.
All in all much to be confident about. The company is well positioned to take advantage of the rising gold price and is in very, very good hands.
Beer o'clock for me now, good luck to all holders. Paddyboy
SLR Price at posting:
$3.28 Sentiment: LT Buy Disclosure: Held
