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Gold/Mining/Energy : Pangea Goldfields T.PGD
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To: russwinter who wrote (951)5/10/2000 11:51:00 AM
From: timbouctou  Read Replies (3) of 1178
 
Have you seen the last CIBC report (April 20) on PGD? They claim that the cost of trucking the ore from Tulawaka to Geita or Bulyanhulu would range between US $10 to $20 per ton. I suppose that given the proximity of Geita, it would cost $10 to truck to Geita (Anglo and Ashanti) and $20 to truck to Bulyanhulu (Barrick). An other source on a different thread mention that the processing cost (should PGD negotiate with a mill operator and not build its own mill) would be in the range of CAN $20 per ton. The 1.1 million oz of open pit reserve, given its grade and metallurgical characteristics is indeed a very low cost operation that could generate in the short term high profit/cash flow, almost irrespective of the gold price.

I agree that Anglo should be interested given the proximity of the two sites, but it has signed an agreement with Ashanti whereby the two companies would jointly develop new properties in Africa in the future. I think that Ashanti is not in a financial position to make significant new investment in the short term. On the other hand, if they want Tulawaka bad enough, Anglo can help Ashanti find a solution to this problem.

Back to my point in a previous message, in terms of strategy, should Homestake want to improve its negotiating position to obtain Barrick 's 40% ownership of their South America mine, they could jump in and buy a position in PGD/MDN that would force Barrick to sit down and negotiate, in the eventuality that Barrick wants to buy PGD/MDN. I do not know if having Barrick as a partner in South America is a problem or not for Homesatke... If not then there would be no reason for Homestake to invest in PGD/MDN unless they wanted to jump in the bandwagon and become an other player in Tanzania.
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