Hello Dave
Don't be confused. The price suggestion is simply a ball park guesstimate for a small high grade remote NWT cold turkey start up factoring in current industry start up costs (allowing for the fact that some infrastructure is reusable but environmental assessments are going to be required).
I believe that $310 figure is in the area or less than what is estimated for for the Boston and Ullu deposits which are larger and of similar grad. Interestingly, Miramar's post strike ramp up is expected to result in cash costs of $300/oz for 1999.
The cash cost of production for the last three months at the Con Mine according to Miramar's 3/11/99 NR is $269/oz. The acquisition of Giant is suggested to reduce cash operating costs to roughly $260/oz. Now, Con is without doubt, a much higher volume operation than Discovery is suggested to be, albeit with modestly lower average grades.
But really…
Most of Con's infrastructure is already amortized and depreciated, most employees live off site but nearby, the mine is an in-town operation, and Con supplies its own power.
Under those circumstances, $310 seems reasonable. Of course, I could be wrong. In that regard, would you mind indicating which NWT gold mines are producing at "50%" of this figure (or $155/oz)?
Miramar's recently acquired for $6/oz Hope Bay's estimated 4.3 million oz's grading at an avg. of .335 ozs/t . It has 4.3 million ozs pp with an estimated cash operating cost of +/- $200/oz and is expected to operate at 130,000ozs/y.
Announcement of that news hardly made the market draw a breath.
Comaplex's Melliadine/Meadowbank deposit is suggested to produce over 400,000ozs/y @ $167/oz with 24million tonnes & 6.5 million ozs pp.
The market has not exactly lit up their shares on this news either.
Discovery is reported to have what, 402,000 tonnes, 260,000 ozs @ .64 ozs/t and is suggested to operate at what, +/-73,000t/y or 47,200 ozs/y?
Are you really suggesting that this was the news that spiked the trading volume?
Perhaps it was the 6/12/99 announced resignation of Mr. Hess from the Board that sparked all the trading?
Seriously, I trust you will agree, that the Discovery NR contained little to excite the current gold market?
Regardless, GMD's trading activity (volume & price spike) preceded the Discovery NR by more than a month and during year end tax loss selling season!
So, despite your suggestion, how could the Discovery news have possibly excited the market a month before it was made public?
The 21/12/99 Royce NR differed from the 27/10/99 Royce NR in two important respects Dave.
1) It was made within two weeks of year-end, but more importantly,
2) It stated that DB's concentrate processing “Results are expected in January 2000 and will be reported at that time.”
I have hounded you for years about the lack of specific schedules but that news is very important and specifically defines a schedule culminating early in the speculative share season. It is therefore a real reason to generate speculation in GMD shares at their annual low and in advance of the annual junior speculative season.
Now, allowing for the fact that history demonstrates GMD insiders have previously traded on news the market does not have, you will, I hope, understand why I believe that this recent activity would appear to be a continuation of that trend.
GMD's price and volume spiked for no apparent reason roughly around 24/11/99 ($.23/s to $.40/s) and trading activity built right up to the week of the NR's.
In other words, when everyone else was selling for tax losses, quite obviously insiders were buying knowing the Royce schedule news, and probably a lot more not yet announced.
It stinks Dave. Even you can see that.
Regardless, Happy New Year
Regards
|
