RE:RE:Airport Property ?? $5 mill ? Coincidence ?WWH,
Alexandra Airport Property is a speculative exploration property. Owens, the CEO, was playing the proximity card and call a portion of it Triangle Too, but so far they have not produced any good hits compared to what ICG Triangle and South Triangle have produced. They have identified several potential new targets for future exploration, but I would agree with you that there has been nothing significant to show. Hence $5M is just too much for that property.
However, moving just a bit east of that loaction is Orenada (not too far from Triangle). This has a proven deposit with a RE of 0.75MozAu (down to 750m, open at depth and other directions). They are thinking about 2 open pits, but with more infill driling they can probably do it in one elongated large pit.
AZX is shopping this property around for a partner for production and further exploration. I would say Orenada is a much attractive target even though the grade is not as high as that for Triangle, but 1.5 gpt is not bad for an OP operation.
Let's assume a couple of scenarios:
1. Using Sigma Mill to process 1.5gpt ore from Orenada
- Truck ore to Sigma Mill, transportation network already available.
- 2400 tpd x 300 d/yr x 1.5/31 = 35,000 ozAu/yr
- x 1000/oz profit = $35M/yr (not bad a profit)
- If the mill capacity is 5000 tpd, profit would be $70M/yr
2. Using Sigma Mill to process the blended ore 1.5gpt from Orenada and say 8.5gpt from ICG
- average grade = 5gpt
- 2400 tpd mill: Production = 35,000oz x 5/1.5 = 116,000oz/yr; Profit = $35M x 5/1.5 = $116M/yr
- 5000 tpd mill: etc...
The idea here is to get the mill going starting with an OP that can be started ASAP, while waiting for Lamaque Project to come online.
$5M would not be enough to get all of AZX (current Mkt Cap is ~$20M). This could get a piece of it, but why not have a run at AZX to get everything. Propose a merger. ICG can afford to pay them with something like 30M ICG shares (30/475 = 6% dilution). AEM, the largest AZX shareholder with 9%, would support this deal.
Save the $5M cash for something else, e.g. preparation of the OP operation to provide the initial/(future blend down feed) for Sigma Mill.
GH