RE:RE:RE:RE:RE:RE:RE:Failure is not an option -It is not always cheaper to buy vs. build...
If that were the case, mining companies would always be buying, and never building. The rate of return on internal projects can, and often does, exceed those of acquisition targets, which is why larger companies take a mixed bag approach of developing their own projects and acquiring other projects/companies.
It is one thing for us to say Belanger can do this and that, but it is another thing to actually do it. Keep in mind, Belanger is not new to the firm but has been there all along as a director. That's the thing, this isn't "new" management, these are people who have been with the company for a while now and have only recently taken on the management role.
The only thing that will prove a turnaround are production numbers to start, and financials as they come in. Beyond that, it is all speculation and opinionating. And writing a bunch of nonsense on powerpoint presentations to show the investment community instead of focusing on what's important, mining the bloody deposit!
Sure, PGM can produce 6k oz per month... it can, and actually has also produced 1.5 k oz per month, not too long ago. In fact, it was just in October that the mine produced only 1.5 k oz and the pretty much the same executive team and board were okay with covering their missteps by announcing "ounces poured" instead of "ounces produced". Almost all the same people on the board and management when this fiasco of a news release came out.
By the same token, PGM can also produce only 1 koz per month and run out of cash and go the way of Harte Gold. Anything can happen. 6 months ago, no one would've thought that we do a PP at 50 cents/share. It has happened. Maybe Anglo makes an offer at $1/share... maybe Kinross counters at $1.25/share... maybe shares go to zero.
The mill will be useless should the mine prove too difficult to drill & blast, muck and haul at a decent production rate and decent grades.
It is all about mining now. They need to mine the deposit properly or else they will run out of cash again.
That's all that's happened, that's the ONLY thing that's gone wrong... is that they haven't been able to mine properly and as a result have choked the mill of tonnage and grades... leaving the company scrambling for cash. They can list a world of other problems but the root cause of all this is that they haven't been able to mine the bloody deposit properly.
How many times are they going to raise money? At a certain point, market will say no, investors will say no, and debt holder will take the asset from shareholders. They won't be able to raise money again unless they can prove the ship has turned around.
This is our last chance. The team on the ground need to right the ship. Anyone not involved in production directly or indirectly should be laid off to preserve cash. We can hire them back if/when the mine is stabilized.
PGM would be a great fit for Evolution and Evolution would be a great fit for AngloGold. That's the bigger play I can envision. I'm not sure where Kinross sits on that stage. Okay, we have a small mill, some other surface infrastructure/equipment, we have a shaft (that's the main thing), some underground tunnelling, underground mining equipment, contracts with suppliers etc. employees... regulatory approvals, power line, good relations with community... those are all great assets to have... but if those assets cannot be aligned to produce gold, and in turn cash flow, then we have nothing at all from an economic perspective.
We need tons, at grades. Simple as that.