Watch TAMs Quarterly Reports

Management's ongoing silence has certainly been a major factor in TAM's SP falling from close to 10c down to its current 5.8c over the past year. It has under-performing the ASX XGD Gold Index by 28%. TAM's capitalisation is now just $68M which makes absolutely no sense given TAM holds over $40m cash with potential to be actually mining within 12 - 18 months following the current targeted drilling program and plant refurbishment.

Based on previous NST reports, TAM's 50% share of restart costs may be around $25 - $30M, this would provide a hefty return on investment given TAM's share of future production should be close to 75kozpa. Based on an assumed all in cost of $1,500 - $1,600poz it would provide TAM with a cash flow of $67 - $75M PA (tax free) and an exceptional payback period of less than 6 MONTHS based on a gold price of Aus $2,500+ (currently $2,560).

Without management disclosure, these numbers can only provide a general idea as to mining profitability, when management finally do decide share their strategy and production outlook it is likely that TAM's SP will expand by multiples.

Given the lack of information flow, I think its important to now watch TAM's Quarterly Reports (one due within next week or so) as it will highlight cash transfers to the JV account. They have so far only disclosed a transfer of $5M which is probably for drilling and admin but It can't be that long before they will be required to be release larger JV transfers for plant refurbishment etc...Upcoming Quarterly Reports should telegraph that TAM is about to become a highly profitable gold miner.

DYOR