Join today and have your say! It’s FREE!

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Please Try Again
{{ error }}
By providing my email, I consent to receiving investment related electronic messages from Stockhouse.

or

Sign In

Please Try Again
{{ error }}
Password Hint : {{passwordHint}}
Forgot Password?

or

Please Try Again {{ error }}

Send my password

SUCCESS
An email was sent with password retrieval instructions. Please go to the link in the email message to retrieve your password.

Become a member today, It's free!

We will not release or resell your information to third parties without your permission.
Quote  |  Bullboard  |  News  |  Opinion  |  Profile  |  Peers  |  Filings  |  Financials  |  Options  |  Price History  |  Ratios  |  Ownership  |  Insiders  |  Valuation

Core Gold DMMIF

Core Gold Inc is a gold mining company based in Canada with all operations in Southern Ecuador. The company primarily explores for gold and silver. Some of its projects includes Zaruma Mine & Portovelo Mill, Dynasty Goldfield and Copper Duke Project.


OTCQX:DMMIF - Post by User

Bullboard Posts
Comment by edxon Apr 27, 2016 4:21pm
128 Views
Post# 24817014

RE:RE:RE:RE:RE:RE:NEWS- Dynasty Goldfield Project Development Agreement

RE:RE:RE:RE:RE:RE:NEWS- Dynasty Goldfield Project Development Agreement
Tad wrote:
edx .... Just some quick very rough calculations ....

At $1200 gold price and average grade of 5 gpt :

$1200 / 31.1 gr/oz = $38.58 per gram

$38.58 x 5 gram = $192.92 per tonne ore value 

$192.92
- $80.00 Mining cost per tonne
$112.92
  $30.00 Processing cost per tonne
  $82.92
  $10.00 Waste rock haulage per tonne
  $72.92
    $5.00 Administration cost per tonne
 $67.92
 $18.75 Haulage from DGF to Mill per tonne ($0.07 / t / Km, or ~$450 per 24 tonne truck)
 $45.17 per tonne net of costs

$45.17 X 400 tpd =  $18,068  net revenue before tax and royalty per day for first two months
$45.17 X 750 tpd =  $33,877 net revenue before tax and royalty per day after two months

$18.068 X 90 days =  $1,626,120 per qtr  before taxes and royalties
$33,877 X 90 days =  $3,048,975 per qtr before taxes and royalties


65% share of sales revenue for DMM and 35% share for Green Oil with equal share of costs as well, according to the agreement.

------------------------------

From this morning's announcement ....


Within two months of commencement of mining activities, Green Oil must excavate a minimum of 400 tonnes per day and 750 tonnes per day by the beginning of the third month. Green Oil has the right to mine open pitable surface material only and Dynasty retains the right to explore and develop any and all underground mineralization on these three concessions. Dynasty retains all rights to mineralized material developed underground within or beyond the three year term of this agreement.

Once government approval has been granted, Green Oil will begin construction of two roads,, under the direction of Dynasty, connecting the project area to a main transportation route. Construction will begin no later than 15 days following Dynasty's making the requisite reclamation bond payment to the Ecuador government. Green Oil will bear the cost for the road construction as well as for all development, mining and transportation of mineralized material.

The terms of the arrangement specify that Green Oil will begin exploitation (open pit excavation under the direction of Dynasty) within 60 days of commencing road construction. Green Oil will be responsible for transportation of mineralized material from the point of excavation to the Zaruma processing plant, approximately 180 km away. Green Oil is also responsible for securing the mineralized material during transport and tracking truck loads via satellite from the point of excavation to the Zaruma mill.

Green Oil's compensation will be based on the cash equivalent of 35% of refined gold sales and 10% of refined silver sales from the concessions defined under this agreement only using international pricing of both commodities for payment calculation. Green Oil will cover the proportional cost of transportation and refining costs as per the above percentages.
 



Well I guess you ran the math for everyone. Thanks. Assuming it works out that way, Dynasty Gold Fields can yield enough profits (without considering tax and royalties) to pay for:
1) All loan repayments
2) Full-scale Zaruma operations (~about $2 million a month) before the work shutdown. 
That would mean anything produced at Zaruma would be profit (less taxes/royalties).

So they still need to deal with the approximately $13-14 million in backed up AP/payroll they owe. Here's where it gets interesting. Any Ozs produced by Zaruma under this scenario, less small scale miner royalties, could go directly towards paying down the backlog. 

Theoretically, the company could go into whatever equivalent to chapter 11 ecuador has (if it has something like that) to structure an over-time AP/payroll repayment without any need to raise money or sell additional assets. I think it would be stupid to go about it that way (fraught with risk and we just saw that risk manifest itself in trying to get Zaruma operational on a shoe string budget), but I wouldn't be surprised if Washer considered it since he is very much against dilution. Even in Q1, when they obviously knew about liquidity issues, they still said "Jersusalem is not for sale".

Well, personally, I hope they sell Jerusalem to fix the balance sheet, then go forth with earning cash flow from DGF to fund Zaruma development to its potential. In this scenario, the long term potential here is mostly still in tact.



Bullboard Posts