Hello 2mar$, a report from the aussie outback goldfield, and we are engaging w/ the new sovereign on our terms given our monopoly position in gold milling w/i the 750km radius circle of our feudal domain. I just got back to hkg from Jakarta.
On Oct 17, 2012
Gents,
A short update
Since signing the deal, we have now secured around 30,000 extra ounces Au (Oxide ore) for the project via purchase of mining licenses and deals on ore stockpiles.
Pxxxxxxxx 160,000t or ore at 3.9g/t Au drilled out. Untested sulfide ore bodies below this - needs drilling.
Cxxxxxxx 60,000t at around 6g/t Au (RR) - needs beneficiating prior to crushing and trucking to GT Mill..
Small ML with 7000t @ 7g/t Au. Oxide deposit also on site, not yet drilled/mined, surface samples of ore 40g/t Au
Pxxxxxxxx Leases - 15000-20000oz Au along big reef, also additional reserves at the Uxxxx Mine/Leases (high grade) not quantified, needs drilling.
Xxxxxxx Gold Mines - offering us their Cxxxxxxx ML (10g/t Au cut off) no cost, we drill it mine it and split the Au produced and they use to proceeds to clean up an environmental problem associated with the ML. We need to know if they will retain the ML as they retain the environmental liabilities (we dont want to take on their problem) . We also need to establish the relationship with xxxxxxx as we want to try to get a deal on their tailings >100Mt @0.6g/t Au. so I recommend that subject to terms conditions we go ahead with xxxxxxx xxxxxx. Dont know how many ounces left in the ground but will assume minimum of 20,000oz Au with significant upside. Will finalise soon.
Today we went to Melbourne and met a company called xxxxxx (china xxxxxxx Gold largest shareholder) and have agreed in principle for xxxxxx to provide us with an initial 8-10000t of oxide ore @6g/t Au for treatment at the plant. We would treat this at our cost ($34/t ore) and split the Au produced 50:50. Their deposit is located behind the locked gate that we encountered near the Chinese camp. We asked them to deliver the ore to the pad by mid December.
There is a further 60,000oz Au at P&W available for purchase but the vendors are asking $2.2M for these ounces. It is an EL not a mining license so may take 2 yrs to convert to ML status. We have to be cost conscious and need to weigh the cost of buying such ounces and adding 60000oz Au to the company's inventory and how it impacts on our overall valuation against the funds set aside for working capital etc. If we take this, we would have around 200,000 oz Au+ as the company's resource base. There would be drilling needed also to add more equity ounces to the inventory, especially of the sulfide ore bodies.
Xxxxx - xxxxxxxx xxxxxxx Possible acquisition ex Receiver
Xxxxxxxx xxxxxx, supposed to a linear gold mineralised zone 14km long and an alluvial deposit with around 900,000oz Au at 1g/t Au. This cannot be verified at present and the person who has put in a bid has no money and is reported to be a renowned scammer. He has asked us to back his bid and pay him $6M for 50%. We will not do this.
Currently waiting for data to arrive to verify if resources are real or not, We are in touch with the receiver as we were too late to put in a bid. The receiver does no believe that either of the two bidders has any money.
The creditors will decide who to go with at a meeting in two weeks. The creditors can turn down both bids and give to us. If there is really a high-grade alluvial deposit (1g/t Au is high) we would take it. We can produce a gold concentrate cheaply and send to Xxxxxxx and feed it into the plant.
Staffing
We have a geologist, high-net worth individual, retired on the money he made, wanting to come and work with us. He spent 20 years in xxxxx and is bored in his penthouse on the Gold Coast and his yacht. He has sold us 7000t @7g/t Au and knows every gold property in the region.
Have shortlist of Mill superintendants, geologists and key staff and interviews will start next week.
China Interest
R had a call from a broker today saying that high-level Chinese representatives were in town wanting to buy gold mines. He told us he thought we could sell out now at $___m. Waiting for verification on his comments. if true, we will try meet with them this Friday in Brisbane.
The rule is never fall in love with the project, such an offer, it real would be tempting, However, it would have to be unanimous decision made by all.
Ixxxxxxxx Au/Sb Mine
Tomorrow, we will spend one day on site after which will make a decision on whether to proceed or not.
Current Reserves - 860,000 Au and 100,000t Sb in situ value of metals minimum $2.5 Billion.
As a comparison, a small Sb prospect in Turkey listed on AIM has a market cap of around GBP59M. Purchase price for Ixxxxxxxxx (100%) expected to be around $25-$30M but would need $50M to complete everything. This is a complete mine with infrastructure, need to produce to concentrates and not Atomony Regulus so will need a few months to make the modifications.
We can but the due diligence package and update with todays numbers.
Will need to put down a signficant deposit to secure this project. However, it wont be long if we secure this and finance it before we have a $500M asset.
Its been a long day and tomorrow we start again at 0500hrs. Will update you on Ixxxxxxxxx later.
rgds
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