RE: South African mine shutdownsWell the shutdown’s impact on the gold price is quite visible and that of course will help us, but there are other more significant factors influencing the potential gold JV ‘s we are presently working on in Yemen, at least in my opinion. The major factor is the nature of the deposits themselves. Both the Al Hariqah deposit (the one which Chuck and Chad are presently showing) and the Al Fayad deposit have extensive surface expressions. They will be amendable to open pit mining not super deep like many of the South African mines, requiring refrigeration for cooling of workers, equipment and ore. Extracting costs will be smaller, allowing a lower grade of ore to still be economic. More about that later.
The last conceptual valuation I scratched together was extrapolated from published data with a gold price of $700, at that time Al Hariqah looked to cross the $2 Billion mark for in ground value. The conceptual values for Al Hariqah at lower gold prices have been in the public realm for some time now and show that the deposit’s value grows exponentially with the increase in gold price. That can only benefit shareholders as gold prices are set to continue climbing above $1000.
Getting back to the grade and how that may affect the deposit‘s value. Management has indicated that they have provided the potential JV partners that have approached them with all the geological data that Cantex has on its Yemen deposits. Apparently some of these companies have looked at the data and come back to Cantex saying it is looking good but can we have the raw data that has come out of the machines, not just the interpretation by the contracted geophysicists. I understand that when it come to Al Hariqah some of these companies using their highly skilled geophysical teams consisting of the their top geoscientists and state of the art geological computer modelling programs have come back to management saying that we think that your cut off grade is too high and we think that the deposit will be able to continue to be economic with a lower cut off grade. Again, that can only benefit shareholders.
P10