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Continental Gold Limited New CGOOF



GREY:CGOOF - Post by User

Post by carbideon Jan 16, 2019 5:45am
103 Views
Post# 29238011

In mining, success is relative

In mining, success is relativeShame about the slain employees (on three separate occasions).  Truly sad.  First, a dreadful security situation.  Now, huge cost overruns, 100 million at last count.  Plus working capital and exploration, and before you know it, USD $200 million more in financing will be required to finish this mine, which is 130-140 million shares, if all equity, or a combination of shares and very dear debt and/or stream.  Expect to pay more than 12% this time.  Massive dilution.  560m in PPE plus 230m deficit (expensed sunk capital), plus 300m for the remaining 60% of 500m pre-production capital, and you're at 1.1b to build this thing.  800m NPV5 plus 400m capital in the FS, plus accretion, and you're probably at say 1.4b in value once built.  From 1.1 to 1.4 in 11 years, about a 3-4% time-weighted CAGR.  And that is success in mining!  Again, these studies are overly optimistic and use low discount rates, so the mine plan of the FS may be worth less still.  At least drilling and test mining has been turning up better grades and expanding the resource.  It's still among the best undeveloped gold ore bodies in the world, so at these ever more discounted prices, it eventually gets interesting to a senior, in spite of all the carnage.
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