tell 'im 'e's dreamin'

The new Bullabulling mine plan is released.

All in cash costs $930.

Pit optimisation was done at a USA Gold price of $1,371 (current price approximately US$1,250).

Average grade 0.84 g/t.

IRR of 15% Before Tax.

Proposing to relocate the Great Eastern Highway, mid project (yeah, that's right, move the highway). How much will this cost? This costing, or any approximate estimate, was conveniently left out of this announcement.

But the kicker is (yeah, get this), PFS capital cost estimate for fixed plant and infrastructure is AUD$326 million.

This is for a gold company that is almost broke, has watched a stock price slide from 40 cents to 2 cents, and has a current market cap of $6 million.

So they need to raise an amount equal to approximately 55 times their current market cap, just for the infrastructure (Tell 'im 'e's dreamin').

These guys have to be working in another universe, or they are the "supreme" definition of eternal optimisim, or they all have Alien DNA or something.

If it wasn't so painful, it would be hillarious, like something out of Fawlty Towers. Is this group of directors and management in denial, or what?

You have to give these guys some credit though, they have balls for releasing this, in the current Gold economic cycle.

It kind of reminds me of a scene we came across, the last time we drove across the Nullabor Plain, there was all these emu's, standing there in the desert with their heads in the sand.

So how has our mining and investment industry come to this, because this is either the stuff of legend, or pure absurdity.

And they are promising in the next review of the DFS to lower this capital cost from AUD$326. To what we ask? Let us hazard a guess then, and say, down to only 50 times their market cap? They still remind me of the Nullabor Emu's.

It is sad really, and I know we shouldn't make light of it, but it is one way of staying sane.

Look at Newmont at Boddington, with the same grades and same deposits, and same losses. My brother works for them, and Newmont management wish a thousand times over that they had never built that plant.

Still, the shareholders of BABs keep these directors and managers and workers in jobs, and that is something to be commended.

And those waiting for RSG to rescue them should read RSG's latest announcement, not to mention the fact they have recently been burnt to the tune of $85 million on Noble.

As for the Bullabulling DFS and the hope of building a mine within the next decade (or ever), well, Newmont and RSG won't come within a thousand miles of it, nor will anyone else unless Gold goes to $2,500 an ounce and higher, until them... Tell 'im 'e's dreamin'.

Tell 'im e's' dreamin'

The Castle (movie) - Tell him he's dreaming.
http://www.youtube.com/watch?v=dik_wnOE4dk

Gw

Don't take life too seriously; No one gets out alive.