hello 2mar$, today's report: following up to Message 28411321
we the cabal, including a trustworthy and knowledgeable leader and another steady and experienced digger, have taken down from the germans what we believe is a good asset in australia, that which the germans had chosen to offer up the gold project in favor of their new tungsten affair.
(1) the germans are counting on continuing commodity boom and the resultant robust demand for very useful tungsten. iow, the germans are counting on fiat money inflation, china, india, etc etc as derivative plays of fiat money inflation; or, the germans have forgotten lessons that their own weimar history holds.
(2) otoh, we the cabal are just reckoning on continuing china-play story as well as the one china-play that hedges against all other china-plays, in alignment w/ simple fiat money inflation and in calibration w/ the direct consequential popularity for savings salvation.
(3) my engagement w/ the project puts me solidly amongst the full-on / all-in of the true believers, and as this is my first, only, and direct foray into hardcore gold p.e. / cheap australian real estate, and roll-up-the-sleaves milling operations, and may well be my last, i shall chronicle the adventure as it progresses, and as my read of the overarching macro, that which asymptotically approaches the darkest interregnum.
(4) brief summary of what we think we have
(4-i) the 100k-150k tons per annum (of dirt) oxide gold ore process mill (carbon-in-pulp "cip" circuit gravity recovery en.wikipedia.org - have to start reading and learning now, and so all the mining truck toys for little jack :0) was commissioned and in operation for 7 months of last year at >97% mechanical availability, and processed 74,000 tons of dirt which had offered up 13,000 oz of gold and 9,000 oz of silver credit
(4-ii)the mill is the only one within a radius of 750 km arena featuring three gold fields, and the economic road train shipping distance for average gold-laden dirt is around 400 km. the feudal gate-keeper position is secure for at least 5 years, assuming gold pricing stays at USD 1,500 level; iow, not too hot, not so cold
(4-iii) all licenses are still good, and operations shall hopefully start w/i 90 days of yesterday, as we had deployed stand-by folks to take charge and secure the facilities
(4-iv) the same capacity again of already partially-built sulfide gold ore processing mill shall, god be kind, be completed w/i 9 months
(4-v) given the dearth of risk-appetite in the mining market place, we are taking down the mill plus all associated licenses, permits, native titles, whatever, and environmental bonds, exploration / evaluation assets, and tax loss carry forward on the cheap.
replacement value of the mill is 56% more than what we are paying the gentle germans for everything including the mill, and
the environmental bond, exploration / evaluation assets, and tax loss carry-forward together come to about 57% of what total we pay to the kind germans
iow all-in we are paying 47% of what all the stuff can be replaced at.
(4-vi) 13 granted mining leases, JORC-defined (surface-16m deep, total 190k tons of dirt @ 106k by 4g/ton, 10k tons @ 7g/ton, and 60k tons @ 10g/ton) oxide gold ore lasting 16 months of processing
(4-vii) 5 granted exploration permits (135 sq km), JORC-defined resources of sulfide gold ore 82,000 oz @ 29g/ton under three pits shallow-drilled to 70m only, 31 pits to be drilled
(4-xi) our professional leader has put down option money on own account to option additional nearby historically producing and therefore sound exploration tenements to drill drill drill and look see before passing the goodies to we the people including himself on as and when we collectively vote basis, and yes, i have enough comradeship so that i have veto
(5) brief summary of plan
The facility was signed for and secured yesterday.
(5-i) re-start oxide mill w/i 90 days and process own dirt
(5-ii) close friendly negotiations w/i 120 days per good-neighbor policy with two supplicants based on them offering up their dirt, pay for processing, and split the resultant gold/silver 50/50
(5-iii) complete sulfide mill in 9 months
(5-iv) drill jorc drill jorc drill jorc over the next 24 months
(5-v) deal w/ supplicants-in-waiting with supplies of dirt but no ways to salvation, on either same feudal gate-keeper basis or harvest by buying outright proven rocks on as tested basis at 20/ton and process for own account.
(5-vi) cash cost of operation is AUD 700-800 for own oxide ore, and AUD 800-900 for own sulfide ore; so figure AUD 800.
assumption on gold pricing is USD 1,500, all resulting in a fairy tale 80+% IRR, and
the like-minded idea is to distribute 50% of profit in gold bars or cash, and use the other 50% to build a gold enterprise, to exit by either trade sale or listing.
the business should be recession-proof, features no marketing/distribution risks, and is devoid of r&d.
i aim to learn the entire value chain. am in process to booked meeting w/ asian refiner to discuss off-take of 98% purity bars for further refining and offloading in asia, that of surplus this and excess that.
all for now.
cheers, tj
p.s guess where i hope jack shall spend some time looking at big trucks before he doubles his age count :0) and how erita shall be learning accounting and financial proforma intricacies before she turns 12, i pray
  
 
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