Great research!The part I’m still getting my head around as...

Great research!

The part I’m still getting my head around as someone new to mining stock is the discrepancy between all this promise we see from Morilla, the facts to date, and the fact that we acquired the asset at the price we did.

e.g. here’s what I’ve gathered from the announcements:

- The Measured Mineral Resource for tailings is 4.8Mt at 0.5g/t gold for 76,000 ounces of contained gold
- I’m inferring this presumes an 80% recovery rate?
- First month mining yielded 544,714 tonnes of tailings at a grade of 0.46g/t gold and produced 4,130 ounces of gold at a recovery of 51% for USD$1000-1100 per ounce, which I’m taking to be largely consistent with the first point albeit at a lower recovery rate
- Let’s say we can keep grade and cost around that mark, we’re suggesting around 39k to 72k ounces of gold depending on recovery rate, which at current gold prices is between USD$32-65m of value on tailings
- This declining quality and increasing cost of mining at Morilla is consistent with the multi-year experience of Barrick/AngloGold
- This would also explain why they were happy to part with the asset for $70m

- However, FFX have an Inferred Mineral Resource Estimate for the Morila deposit of 32 million tonnes at 1.26g/t gold for 1.3 million ounces of contained gold (refer ASX Release dated 31 August 2020).
- This would presumably be up to USD$1.2b in value that the previous sellers overlooked?
- Since then, FFX have been recalculating the value at a lower grade of 0.4g/t (does this mean the grade is lower than expected or does this mean adding to the existing inferred estimate with additional lower grade gold?)

Then I note a range of estimates on the forum for the value of the gold mine at around $300m, and posts like this suggesting hidden value.

Are we presuming the previous owners were naive, or for some reason lacked the tenacity to extract this value?

How is everyone else reconciling this?