Im surprised you even have to ask as a holder of the last few years but anyway, heres my take. Very far from accurate because i cant be buggered looking up mere technicalities like exact numbers etc but they are roughly right where it matters in spirit and tone I think.
Basically there is so much stacked in DEG's favour if you merely have the attention span and patience to hold it for longer than a tick toc video.
To use the technical term, we have a shitload of gold, as im sure you are aware. A resource of nearly 12 million ounces. and its only going up all the time. Its not like we cant find anymore, it's pretty much like everywhere this experienced team poke a drill rod they find some gold if not a shitload, its a motherlode. Either way its a load of gold. We have not focused so much in recent times on exploring for any more because we dont need to, its more like management said hey, there's too much for now.. we better start infill drilling so we can more accurately define this mother for financing and cash producing reasons. That point has now been reached (the DFS infill drilling) and with the soon to be released DFS that will form the basis for the FID and in all likeliness open the gate for lot more institutional interest, we could very well be on at the point of another leg up past the all time high. This point is borne out and supported by the CURRENT broker estimates which i think range from about $1.80 to about $2.30 or so. Thats as things are at the moment, with what is known today. Ounces will be added for many years yet to propel DEG past the 5th? largest gold deposit in australia, to possibly the largest given a little bit of time. If thats not worth investing in well not sure what goldie is.
In the meantime the clock is ticking, pressure is mounting.. All sorts of macro and political mayhem appears to be building if you hadn't noticed. Many ratios show the "unloved" precious metals/commodities/gold sectors could be ripe for the picking, at historic lows in comparison to the various other growth or techy interest rate sensitive kinda sectors that could very sharply and abruptly feel the pain of some financial Armageddon, like we all will to a degree, I suppose, but here is De grey, about to embark on the journey of digging a huge amount of a tier one class asset out of the ground.
Shunned and probably at the nadir of downtrodden dystopian levels of interest is Gold. But behind the scenes things are brewing slowly (or maybe not so slow), and turning in gold's favour.. Maybe there will be a BRICS currency /safe haven inspired rush for gold or whatever.., certainly the central banks have not been shy buying it as well as many other institutions. There appears to be a hell of a lot of peaking in other investment sectors', that if popped, could quite possibly lead to a rush for the relative safety of gold, and naturally the geared bet that the gold miners provide to physical gold. Not to mention many ratios that show miners are due for a bounce. It probably doesn't matter really because the economics for DEG still stack up pretty well in some comparatively challenging scenarios anyway.
Ok, well lets just say Im pretty comfortable that despite a few hiccups and false starts, that in the medium to long term of my investment horizon the macro environment odds are reasonably well stacked in golds favour. With that as a base assumption why choose DEG over any other gold miner? well each to their own. Im sure there is not just one good choice with great potential but if comparing by metrics such as the ounces per vertical meter, the ASIC, which i think is about $1200 bucks or so- There is plenty of fat there to absorb some pain, provide some safety and cope with hard times.. if they should come. The other angle is that should gold actually fly, which is quite possible, our margins and profit will explode and all sorts of financial measures will turn in our favour and leave DEG holders with a big smile and an even bigger yacht in some cases.
So many of our drill holes over have ended in mineralisation that its very realistically is a no brainer that we will end up going underground by the sound of it. For those of us who are still around at that point, The mill will be well paid off and the company will be a true cash cow .
You only have to take a quick scan of DEG's announcements to see how much untapped potential lies below what we have already defined, let alone the recently resumed regional exploration program that has already showing huge promise now the infill drilling is done, and is still at a very early stage with a ton of upside. Check out our resident satellite sleuth, Gmeister's excellent posts for the inside edge on what may be brewing on that front.
Ok, sofar, IMHO of course.. We have a nice amount of doom and gloom providing a great low entry point for shrewd contrarians and lots of mooning potential for the sector in general..
Within that sector we have this company with a very rare combination of a humungous tier one deposit, with huge untapped growth potential in one of the safest mining jurisdictions on the planet very rapidly approaching the point of a DFS and FID where it has a fair chance of some good price appreciation on that factor alone, but wait, theres more!.. Lets throw in the fact that DEG is being mentioned in takeover rumours and being quoted by various industry pundits as being high on the list if not the highest for a takeover target by the Gold majors who have been lazy in recent times, and now feeling the pressure to make up for lost time within the backdrop of a waning number of major discoveries and growing M&A activity. , There are not manyTier one gold mines being discovered now, and the existing beasts in this sector are running out of food, getting very hungry. At some point this will happen, at least a few attempts are likely, and if they dont succeed its likely cause management have created such an attractive case for current shareholders to hold that none of these behemoths can afford to prize it from our sweaty little paws.
Last time they assessed it, the admittedly huge cost of the mill.. near enough to 1 billion aussie peso's, will be paid back in 18 months or so.. Hello.. ding ding ding.. somehow this little puppy can pay off the best part of a 1 billion loan in 18 months? A two billion dollar company can do that?.. What the hell will happen after that with all that cash? The company will be providing the workers with trump style bidets of gold as a way of storing the gold and not flooding the market.
But fear not.. We have white rocks too.. Well before all that gold money starts rolling in I am sure that if its not already begun, we'll be probing a few holes in some rather prospective lithium ground we have.. Not to mention what other goodies will be appear from the depths as a wild card. We have a huge land package, and recently enlarged by way of the J.V with Novo so we really do have a crack at finding some other minerals on our land i believe..
You won't see any mention of de grey mining on the ice road truckers program either.. no sir.. We have the main highway nearby, the gas pipe and electricity lines seemingly set up just for our mine and a port nearby to bring in the gear and send out the lithium if they start getting some of that.
We are on good terms with the Local Traditional owners and have already signed a few bits of paper..
My god man.. how many reasons does one need to have great hope for this company.. I have not exhausted them by any means, but dont want to sound like any more of a nutcase than I already am by going on about it any more.
With this one you dont need to ask.. We have a ton of gold.. and no matter what happens in the meantime, when you start selling a ton of gold, you have even more tons of money, even at prices much lower than now..
Nothing is ever guaranteed, everything has risk but weighing it all up given the risk v reward, and in comparison to a lot of our peers and the market in general I think you could a lot lot worse than put at least a part of dough, or keep your dough in De grey.
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