"When you do not have proven reserves, the only thing you have is what comes out of your operations month after month. In other words you have to build your credibility. This is feasible, no doubt. But it takes time and is progressive. But when you prove up 2 millions ounces that is economic at $300 gold, the reward is immediate as you can sell the deposit for $100 millions or more."
So what has happened in this scenario is that by proving up your deposit you have created additional value to the Company in the form of a buyout, cash infusion and as you have said is "immediate". Isn't it this point that we were debating earlier when you said that valuation would only come from production?
The plan is very simple, produce, prove, finance, full scale plant, produce, prove, finance and multiple full scale plants and then start all over again.
<Why do Mining Companies prove Reserves at all?>
"Because it is less risky and not that expensive compared to bring up full scale production. Once you have proven reserves, you can also get financing which will be pay back from cash flows instead of diluting your shareholders by issuing more shares."
That was exactly my point as to why you will see at the very least "probable" calculations sometime after commencement of our 3500 TPD plant. For funding and share valuation.
Since our 11,000 full scale plant costs in the range of 6 million and you have told us that proving Reserves is less expensive than producing full scale, I would be inclined to believe a minimum 3-4 million has been spent on sampling, YET you continue to say that not enough money has been spent on sampling.
I would also say that you may not have enough information as to the number of drawpoints, depths and spacing of the current block caving program.
If you ask the correct questions to the correct people you get what you search for.
Since you are the Editor of a newsletter it would be very easy for you to get the information you lead us to believe you are looking for.
Call the Company and enquire.
Doug |
