Post by
nozzpack on Feb 21, 2024 7:51pm
Dundee outbid for OSI Twin Hills
A Chinese company outbid Dundee's $1.50 per share in cash by offering $1,90 per share, which including debt amounts to about $410 million offer.
Capital costs mainly for 5 million TPA mill is estimated to be $378 million US which is about $520 million in cad.
Total cost is about $930 million cad.
Twin Hills has 2.15 m ounces in reserves at 1.05 grams per ton .
Country is Nambidia so there is a country risk.
So, it will cost about $450 cad per ounce to get this deposit into production assuming no inflation over the 4 year build out ....hardly likely ...and the IRR is rather modest right now.
HD had 272,000 high grade ounces in its reserves in the 2022 FS.
As we already have our own mill, Those ounces are worth about $115 million based on OSI .
Almost certainly , we will get to at least 400,000 ounces in reserves when the FS is updated which would value HD at about $200 million .
Actually much more than that given there is no country risk or inflation costs for a mill.
There arnt many atttactive deposits out there to buy which is why OSI got a higher bidder ......Dundee's share price jumped $2 when their offer was outbid.
Which shows that shareholders felt the project was only marginally atttactive and good riddance ..