<ELD: balance sheet>
Cur. Assets are 12.7 and CL are 14.4, a big improvement from a year ago. The remaining liabilities are long term totaling 22.4 including 3.5 reclamation. Short term funding requirements are not a major problem and SB will be positive cash flowing going forward. I also believe they will be receiving an insurance settlement for San Bento claims.
<ELD: hedging>
Will be hedge free January 1, 2002. Delivered gold into the remaining gold forwards this quarter. Brazil Real was closed out last summer for a gain which was applied to help clean up balance sheet.
<ELD: Kisladag development>
There are various approaches. Option A is 10 MT/year: 266,000 oz, 11 year life, 138 cash cost (almost in the "tooth fairy" category).
goldfields.co.za
The capex would be $104 million, and would necessitate a deal with a partner with a few bucks. Goldfields inherited their 30% stake and has not been very involved. ELD formed a key partnership elsewhere in Turkey, with a large Turk company.
sedar.com
So plan A would be a carry or JV into production with one of them, or even another major (RTZ?). Or a more likely plan B, I think ELD sells all or part of San Bento and does it all alone. SB is in the process of getting cured and fixed up operationally to allow the best price.
Option B, would be to hang on to SB, as it will now be a contributor, and bring Kisladag into production on a smaller scale: 3.4 MT: 103,600 oz at a higher 149 cc. Note the anticipated capex from the ignored 11/15 IR is only 29.6 million. Also there is "blue sky" activity at the nearby satellites, including Saylik. Note discovery hole there from another "ignored" IR.
sedar.com
Option C would be the whole enchilada: keep SB, and develop the larger scale operation alone. I think that's what they want to do, but IMO not realistic in today's climate.
<Turkish bureaucracy>
Criticized for delaying NDY's Ovacik. Now in production, and remember that mining in Turkey has just been opened up, so NDY was the pioneer. There were concerns about "cyanide" so NDY successful operation will be the litmus teat for the Turks. Ovacik was in western Asia Minor so there was concern about tourism impacts, etc. Kisladag is a different setting: a more remote rural area suffering economically. |
