VGCX Shock Therapy Is Now Complete!OK, now that the VGCX share price Shock Therapy Treatment is complete, let's look at where we go (or should probably go) from here if VGCX management is following the Technical Report (which they better be).
The .63 gpt mined and stacked in Q1 and potentially again in Q4 means that
the average grades mined and stacked in Q2 and Q3 will need to be much higher at .83 gpt (average during these two quarters)
to meet the Technical Report projection of .73 gpt stacked on the HLP (see page PDF page 287 for 2024 and down to the row titled 'Heap Leach Production Schedule' and 'Ore Grade'). This is what VG management means by the term 'Mine Sequencing'.
vgcx_-_2023_eagle_mine_technical_report_final.pdf In 2023, the average Ore Stacked Grade was .72 gpt (and NOT the .82 gpt average that was projected in the Technical Report), yet VG still manage to produce nearly 170K ounces in 2023 mainly because they stacked 2.3 million more tons on the HLP in 2023 than in 2022.
So getting back to 2024 (based on the Technical Report),
in order for VG to meet or exceed the high end of 2024 production guidance they
will need to stack an average grade of .73 gpt and 10,494,000 tons of ore on the HLP and maintain their current gold recovery rate. And if they do, again according to the Technial Report, they
should produce up to 193,949 ounces of gold in 2024.
Now, management knowing that they need to stack at least 10,494,000 tons of ore on the pad this year and them only stacking 2.1 million in Q1 tells me they plan to stack considerably more tons (~3 million more) in each of Q2, Q3 at grades of around .83 gpt, and ~3 million tons in Q4 which will likey be at an ore grade of .63 (same as Q1).
So when I spoke with JM a few months back he explained that once they start blasting in an are with lower grade ore, they need to finish that area before moving to a new area (with a higher grade ore). Makes sense but does this mean Q2 stacked ore grades will still be lower or have they since moved to blasting in a new area? We won't know when they do, but you can bet GMT Capital, Sprott, etc sure will.
Q2 & Q3 stacked grades and tons will be very important to watch because if they stumble in Q2 and Q3 today's share price drop will look like a light rain on a hot summer day. So considering that I (with literally no practical mining experience) can figure this stuff out using the data from a Technical Report and past results, is it any wonder that the short sellers and any of the major funds holding VG shares know with fairly accurate certainty when to go long and go short VG? And you can bet that our largest shareholders are privy to details that us minion retail shareholders aren't.
I own a fair number of VG shares and even after today's share price beat down, I'm not selling a single share but because I already have more shares than I probably should I'm not buying anymore either, but I sure would be buying at these levels if I was just entering or had a small amount of shares because as painful as this looks today, if they can get anywhere close to the metrics in the Technical Report in 2024 amd 2025 and gold prices stay here or go higher to the $3,500 or $4,000 level some analysts are projecting, there's gonna be a lot of shoulda, coulda, woulda going on by posters on this board by the fall of 2025.
And if you missed it yesterday, go and read the Seeking Alpha report by Taylor Dart I posted yesterday and if that doesn't convince you VG stock is very cheap today then I'm sorry but I can't help you.
My opinion only, please DYODD.
HB77