I just want my pie in the skysome more rambling from me.....
In Jay’s latest interview, he highlights the fact that GoldCorp got rich off the back of the Red Lake mine. With the recent news of additional finds in the D2 axis fold region, which HingeLimb/Arrow are part of, this bodes well for what they could all be worth.
We should keep in mind that they are not yet part of the maiden resource which is the LP fault zone. However saying that, the latest news indicates that these will be part of the maiden resource. I personally hope that it is kept as a separate total, so that we can see the difference in each areas total ounces.
I say this because they are two different styles. Also, because I imagine that it will be easier to extrapolate the number of ounces in the LP section maiden resource to the second layer of 500 metres, and then the third layer.
I’m not suggesting they be mined separately, or sold separately, since they are so close together, and I suspect they actually all join up at some point, just that it may be easier for calculation work.
In Jay’s interview, CT again highlights the fact that the LP fault is akin to Malartic and Detour. Which brings me back to the reason why the resource total for it, and Hinge/Limb/Arrow etc should be a separate total. We can use the buyouts of Malartic and Detour to come up with a price for the LP maiden resource but not both. I did this in a previous post but here it is again.
Malartic sold for $3.5B
10Moz x $350 = $3.5B. That is, they got $350/oz.
Detour sold for $4.9B
14.5Moz x $337.93 = $4.9B. That is they got $337.93/oz.
Average price per oz
$350 + $337.93 = $687.92=3 / 2 = $343.96/oz. This included the mine start up cost.
As of 15th March gold was at $1,730 per oz USD…$2,158 CAN (rounded down), and GBR shares fully diluted 62M (rounded up)
Example using 1B mine start up cost:
10Moz $3,439,600,000 - $1,000,000,000 = $2,439,600,000/62,000,000 = $39.35
LP Fault initial estimate shown as GBR share price using Malartic and Detour buyouts.
| Number of Oz | Value at $343.96/oz | Value after 1B mine cost | Share price |
| 10Moz | $3,439.600,000 | $2,439,600,000 | $39.35 |
| 15Moz | $5,159,400,000 | $4,159,400,000 | $67.09 |
| 20Moz | $6,879,200,000 | $5,879,200,000 | $94.82 |
| 25M0z | $8,599,000,000 | $7,599,000,000 | $122.56 |
| 30Moz | $10,318,800,000 | $9,318,800,000 | $150.30 |
| | | | |
So the above share price/s are based only on the LP fault maiden estimate. It seems to me that we must then add what the Hinge/LimbArrow etc of the D2 Fold Axis could be worth. The recent news shows they are finding more zones, and keeping in mind that these are like the Red Lake style where Goldcorp became a very wealthy company, we can only guess as to what those zones will work out at.
Looking at Pure Gold Mining, just up the road from us and in the Red Lake style geology, the same as Hinge/LimbArrow etc is, their fully diluted market cap is $978M on 1M ounces (plus 2.1M indicated and 0.5M inferred). If GBR owned that, it would be $15.77 per share. Using this, I believe that Hinge/LimbArrow etc, could be worth $35-$40 per GBR share, given that is what Gold Eagle got when they had no resource calculation.
I think the most important thing is to try and get a sense of what is deeper than 500 metres, so that we can get more than 15% upside on what might be there.
If so, I see no reason why we cannot get to over $100 per share.