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specgoldbug

13,113 Posts.

392

19/09/16

21:16

Post #: 19266419

Originally posted by cyberbash ↑

@specgoldbug thanks for your input on this thread...long time reader first time responder. I've already voiced my thoughts on NIU here so I won't rehash it. I just wanted to post my personal research on NIU for anyone thats interested, here it is verbatim:

Column 1 Column 2

1 ASX Share (Industry)
NIU (Gold) (Papua New Guinea)

2 SP
0.007$

3 SOI
1,475,000

4 Cash
$150,000 (pre SPP - see below)

5 Cash burn/quarter
~$430,000 last quarter

6 Debt
$150,000 CN issued 2/2016, 12.5% interest PA. Matures in 2 years

7 Options
Nil

Column 1 Column 2

1 Market Cap
10.3million

2 Fully diluted MC (ideally ~35-150mill)
-

3 EV

4 Misc
Top 20 – 74%. Directors and management 15% (Plimer/Lake/Roberts/Arthur). FREE FLOAT ~360,000 shares

FY2016 Production: 689oz Au and 602oz Ag. Revenue last quarter ~500,000$AUD. Revenue last entire year ~1,086,000 (ie production was poor previous to the last quarter)

Their strategy: Use $$$ from Edie Creek upscale to fund exploration at Edie Creek+Bolobip+May River

Drill rigs (assets total) worth ~$750,000

CONC: Profit each year 1.2million$ once new equipment up and running. Upside from drilling.

SPP (16/9/16) – For ??? amount. Underwritten up to 750,000$ by Pattersons. Dispatch of offer 21/9/16, allotment of shares on 17/10/16. Funds used:

Buy equipment to increase production rates at Edie Creek

Orders currently being placed for larger 5t/h ball mill, roller crusher, vibrating feeders and conveyer belts to increase mining rates and processing throughput (cost ~$40,000 USD)

Fund exploration+drilling at May River and Bolobip

Edie Creek

Owns currently functioning gold and silver mine

FY2016 Production: 689oz Au and 602oz Ag

Recommenced production in 2/2014. Best production in a month was 281 Oz of Au in 6/2016 (via 400tonnes of ore)(new crusher and vibrator screen installed BUT also higher grade ore processed then too [12.9 g/t][?normally 2g/t])

Total gold produced in June quarter ~323 Oz (Revenue $526,000. Cost $400,000.

Break even production at Edie Creek is 76 Oz per month at current prices

Edie Creek has high grade vein gold and low grade bulk gold ore

Aiming gold production to >200 ounces each month and increasing ore thoroughput to 40-50 tonnes per day (single shift, 11hrs) (currently 6 tonnes per day)

Lets say they pump out 600 ounce per quarter (?pessimistic) = Revenue ~1 mill, Cost lets say ~$600,000 = profit per quarter = $400,000 = yearly profit 1.2 million.

NIU is currently also drilling around Edie Creek to further delineate resource extension and establish a JORC resource (around Enterprise and Karuka vein systems)

Enterprise being drilled as per announcement 25/8/16 – HOPED DRILLING COMPLETED LATE SEP-EARLY OCT and results announced to market progressively

Enterprise needs 10 holes and Karuka 20 holes drilled to establish JORC resource

MODERATELY-VERY IMPRESSIVE GOLD RESULTS PREVIOUSLY at these two systems as per quarterly 12/2015

May River

Exploration target for copper/gold porphyry – near 18MoZ Frieda River deposit owned by someone else

6mill already spent exploring May River. Historical intercepts between 0.89-1.83 g/t 54-109m in length.

Company plans to drill 3 holes here 2H 2016

Bolobip

Exploration target for copper/gold porphyry

1million already spent here working it up for exploration

JV with Mincor

3 hole drill program planned

Aberfoyle Project

Comprising the Aberfoyle/Lutwyche/Kookaburra/Storey’s Creek/Royal George and Great Pyramid tin and tungsten deposits

Through its 72% holding in TNT Mines Limited also holds some land prospective for tin and tungsten in Tasmania AU (brownfield project)

Aberfoyle is potential low Capex combined open cut and underground mine

Royal George JORC 2012 Inferred Mineral Resource of 800,000 tonnes at 0.33% tin for 2,640 tonnes of contained tin.

Great Pyramid Tin Project has a JORC 2012 inferred Mineral Resource of 5.2m tonnes @ 0.2% Sn for 10,400 tonnes contained tin.

(Royal George and Great Pyramid look to me like a project that might have NPV of around 5-10mill – guestimating based off ANW.AX)

Misc

Owns its own drill rigs and crew! ?value

Hopefully this helped someone. For others reading our posts the main difference in our income projections for the company was that SGB used 40t/day and the average ore grade of ~11g/t Au whereas I projected the company would produce 200 ounces of gold a month (taken straight from their preso where they said they were aiming for >200 ounces of Au a month) - perhaps I'm being pessimistic but anyway

DYOR etc

Expand

Nothing wrong with pessimism its keeps us alert. I would go straight to the lower grade projection to be conservative- nonetheless its impressive for cap. You also failed to mention an outstanding debt owed to them by TNT mines circa $600k which makes cash position look better but company still falls into the high risk/high reward category until updated numbers.

0 Great analysis

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