The path to 500,000 ounces

Given last weeks announcement where Vau expect to grow KOTH to 235,000 ounces I thought it was worth starting a new thread focused on the upcoming growth prospects for Vault.



This includes:

1) Higher hedging in the next half of $150 per ounce from 2,781 to 2,936 ounces before hedges drop off in 2026 increasing cash flow considerably.
2) Increase in production at KOTH to 235,000 ounces, Mt Monger and Deflector to stay at 100,000 ounces each and the start-up of Sugar Zone adding another 50-55,000 ounces should see VAU come in just under 500,000 ounces by Calendar Year 2027.
3) Strip ratios at Sante Fe (Mt Monger) dropping considerably by 2027 seeing an increase in grade and margins at Mt Monger.
4) Recent underground drilling at KOTH scored 9 out of 9 drill hits across 500 meters, 300 meters of it outside of existing resource. I'm no geologist but this should not be underestimated as to get hits across such a wide area on the first go (has there been previous drilling here?) bodes well for future underground production. Koth is open all along the base of its enormous pit so it an underrated monster in my view.




5) Same for Darlot underground 13 out of 15 drill hit discoveries. This will also add to the life of mine at KOTH.
6) Cheaper processing at KOTH should also drive higher margins.



7) Resource and Reserve upgrades at KOTH underground, Santa Fe and Cock Eyed Bob/Maxwells. Santa Fee has 800,000 ounces in resources, but only 328,000 in reserves but it should be bigger given reserves were estimated with a gold price of only $3,000. Same for CEB/Maxwells which were estimated using reserves of $2,900. There is no way Mt Monger should be sold if these reserves aren't updated. Rumbles should add another couple of year to the open pit reserves after 2030 given there is 200,000 ounces in resources and Lorna Dorne has hardly been drilled. Daisy has 1.2 million ounces in resources so should be good for another 10 years given reserves were estimated at a paltry $2,900. This is an underrated underground mine and I will be very disappointed to see it sold as it has been the mainstay of Silver Lake resources and the reason I bought back in 2015.
8) Sugar Zone South drilling should see an upgrade in reserve and resources in October easily pushing reserves out to a ten year life, if not also lifting grade. Sugar Zone reserves were estimated using C$2,610 way under current prices.

If current margins of $2,500 continue production of just under 500,000 ounces this will see a cashflow rate of over $1 billion per annum in around 18 - 24months. This is literally half the current EV of the company that has 18 years of mine life at KOTH, 10 years at Mt Monger and Sugar Zone with a shorter mine life at Deflection albeit the main lodes showing potential for extensions.

Vault is way undervalued and should start to rerate as hedges roll out.

I certainly hope they don't sell Mt Monger for many reasons - 1) they will sell it too cheaply 2) what will they do with the money and 3) it will breed more distrust with management holding the share price back.

I think we can all agree we would like to see a much higher share price sooner rather than later.

IMHO/GLTA