MAI, KRR, CEE x 2
Mexican gold miner Minera Alamos aka MAI released an update from its operating Santana project in Sinaloa. Until now all production has been from the Nicho Norte deposit, but now mining has begun at the Nicho Main deposit, with production expected to reach planned levels in a few months. As with any new mine, optimization is ongoing but management appears to be very satisfied with how things are going so far, with over 900 oz Au placed on the leach pad since the beginning of June.
Speaking of leach pads, the PR did not mention the delayed permit for leach pad expansion, which has been held up in the bureaucracy. The new mining plan being implemented was developed in reaction to this delay, so if it does eventually come through, expect production to increase even more quickly.
Message 34742376
I have been hoping there would emerge a competing bid for Westgold's takeover of Australian nickel/gold miner Karora Resources aka KRR, primarily because it includes a SpinCo which as far as I have been able to tell will be essentially worthless for most Canadian shareholders. But now it looks like that time has passed, with KRR announcing that more than 93% of KRR shareholders had voted in favour of the transaction.
My opposition is somewhat ameliorated by the way both WGX and KRR have been running. Now we are essentially waiting for the transaction to complete.
Message 34744150
African gold miner Centamin aka CEE released two PRs today.
The first one delivered positive news concerning their flagship asset, the Sukari gold mine in Egypt. When new management took over a few years ago, one of the first things they did was to contract out the majority of their waste stripping, with the contractors recently reaching their 120Mt goal months ahead of schedule. This will allow the use of the fleet for other purposes over the remainder of the contract. Their assignment will include more waste stripping not scheduled till next year, and will free up part of CEE's own fleet to construct a dump leach which is expected to add at least 5k oz Au a year above current production.
Message 34742423
The second PR from CEE concerns the release of a Definitive Feasibility Study for its Doropo gold project in Côte d'Ivoire.
The numbers look good to me, with Doropo hosting a Probable Reserve of 1.88M oz Au, enough to support a 10 year mine, with likely upside from further exploration paid for by cash flow from production. The projected AISC over the LoM is $1047 per oz Au, lower during the first five years when production will be higher. Using a $1900.oz gold price, the IRR is a robust 34% with a 2.1 year payback. Construction capex is estimated at $373M, and given that CEE currently also has almost double that in their cash stash, they should be able to finance the construction themselves.
CEE already has most of permits they need. Next up will be applying for a mining permit, and with that in hand, making a construction decision.
Message 34742461
FWIW, inresponse to these PRs BMO issued a new analyst report. Calling the Doropo numbers 'as expected', and pleased by the Sukari news promising increased FCF, they maintained CEE with an Outperform and a target of $2.84. They expect construction to begin Q3 2027. |
