re: weighing up ags maldon/andrewe Hi Andrewe, Many have...

re: weighing up ags maldon/andrewe Hi Andrewe, Many have questioned AGS and the Maldon gold project.
I have studied it in depth, and it is a worthwhile project.
The things to consider here is that Ian Gandel bought it for the gold assets. He has since used his men to look at the project. Steve Johnston and Ian Parmensky.
And an external consultant Tony Lethlean.
From what I can gather they are on the ball.
They have replaced the original Alliance team and are control.
So judging the old alliance with the new alliance would be wrong.

I have seen a presentation by the company and they are under no illusions that many predecessors have sunk millions in Maldon (and other Victorian Goldfields) and received little.

Management of AGS see this as a distinctive advantage as all geological models basically show previous operators essentially "stuffed up" at Maldon.

It is actually on this basis that makes Alliance look good.
The gold plant is there. Tunnels and ventilation shafts have already bean dug.

This really is just the reopenning of an existing mine .

The Mine, the lease, and the plant, are probably worth about $10M in a firesale or around 4c/share.
Plus they have around 2c per share cash

So Absolutely Rock Bottom Bring in the Liquidator sale.
AGS is worth about 6c without the Uranium.

If the Maldon Assets are valued at fair value then they are probably valued at $25-30M
or 10-12c per share, pre mining.

By spending approximately $5m to dig the decline they will open up a large area of Gold Reef that has never been dug. It has a potential of 1-2Moz

At this point in time a JORC Report will not be produced for the Maldon field.

The reason for this is the gold is very nuggety and occurs on either side of a 1m wide quartz vein.
It is estimated that it would cost $5M to drill the deposit to JORC Standard and still may not be that accurate.

So as the cost of digging the Decline costs are the same as drilling to JORC Standard, AGS have decided they want to dig the decline.

They know the reef is there from drill results and they know the reef contains gold. They know once they get down to the lower level it will provide access to numerous neighbouring reefs. So why waste $5M drilling and then still have to dig the decline for another $5M

If Maldon was part of a large gold operation, $5M would be spent without the blink of an eye and would easily be justified as the chances of success are very good

Maldon is not without its risks.
Is it worth spending $5M to find out if you can make $10M Profit per year for 20+ Years?
I would think so.

Just remember that this is more about reopenning an existing gold mine and utilising the 30-40 odd Million in infrastructure already spent at Maldon.

With the backdrop of rising gold prices this could be very profitable.