Regular Dividend From Discards All aggregate must be washed clean before it can be sold.
Shoreline has a wash plant for this purpose.
Its discharge includes gold fines and gold particles which in the past ended up in MAE's tailings pond #2.
We now know that Engineering has been initiated for the installation of a gravity recovery circuit to recover gold from the one million tonne per year aggregate wash plant operated by Shoreline Aggregates Inc. at the Pine Cove site.
As gold is 6 times heavier than quartz, gold recovery will be very high.
This is a passive recovery method, cost little other than processing the outfall at the Pine Cove mill.
Based on 95% milling recovery of the gold ore , about 5 % of the ROM feed will be left in the aggregate which Shoreline processes.
That would amount to 0.35 grams per ton of aggregate for HD ore and 0.70 for QW.
I assume an average of 0,5 grams per ton being discharged by the wash plant of Shoreline.
This amounts to about 500,000 grams from 1 m tons of aggregate which computes to about 16,000 ounces per year passing through the gravity facility.
I assume 90% recovery which means about 14,000 ounces recovered which will be cheaply and very quickly milled by the Pine Cove mill.
Based on original source and processing , I assume 60% as MAE share which is about 9000 ounces per year.
At $3000 CAD ( $2150 US ) per ounce gross revenue net to MAE would be about $27 million per year .
As most of the primary costs would be included in the processing of the ROM ore, gross margin would
be very high and probably above 75% .
Lets say $20 million home and free to MAE per year.
Divide by 2 to be conservative and we have about $10 million per year in free recurring cash flows to pay a dividend of about 1,5 cents per year.
Most investors are not aware of just how much a dividend by a gold producer elevates the valuation multiple.
Typical yields are about 2.5% to 3%.
Lets say 3% which means that MAE would trade at 33 times its dividend of 1.5 cents which is $0,45 per share.
Let us not forget that we will be recovering much more than 9000 ounces per year from our tailings project nor that Firefky will most likely make its ore discards available for Shorelines Aggregates business by consolidating its operations at Point Rousse.
Pine cove is also set up to copper gold concentrate .
We have a superb management team here who have patiently acquired both high quality resource projects as well as two gold mills for basically pennies on the dollar.
From just the neglected assets discarded by Signal, we will now be able to pay a nice dividend .
AIMHO