Post by
nozzpack on Dec 11, 2023 7:46am
In the case of…..
..WestGold acquiring ODY, they have 1 m tpy in excess milling capacity just for this reason .
If one assumes 700,000 tpd would be assigned to the new high grade Turnakura open pit containing 376,000 ounces, average annual production of 70,000 ounces per year would fit quite well with 700,000 tpy milling volumes.
Being high grade and open pit, cash costs will be much cheaper than average AISC costs in Australia , perhaps of the order of $800 USDper ounce.
At $1900 POG, free cash flows less tax to net profits would be about $ 50 million US per year or about $65 million cad per year.
We would get 20% of this net profit which would be about $13 million cad per year.
This extra cash can be used in a variety of ways...advancing Murchison to productiin within an expanded mill..or as a dividend in the event that Selinsing cash flows can fully fund our Australian funds .
Dividend yields for gold stocks are rare which is why yields... ( dividend / share price )...are about 2.5% which means that if just 50% of the ODY JV profits were used for a dividend...about 2 cents per share ...our share price would be about $0.80 based on peer valuations.
Its diffucult to believe that somehow, if WestGold acquires ODY, that the current JV would not be expanded to include our Murchison .
This would be very attractive to WestGold and very profitable for us......including only modest capex cost contribution..if, for example, the JV were altered to 60 % to WestGold and 40% for MMY , as annual profits would carry on for many years in the range of about $50 m cad per year .
Lots of positive outcomes ..