Post by
nozzpack on Jun 23, 2024 4:29am
Todays costs to build a gold mine
Let's take Marathons V Lake as an example.
Its share price was in the $5 range before mine construction was announced .
The full cost of that mine has yet to be tallied but will easily exceed $1 billion.
This was funded largely by Marathon equity .
At the time Calibre made its offer of $0.80 per share, its share price was in the $0.50 range .
A reduction by an order of magnitude .
Lets examine SGD.
Absolutey great intercepts in the few holes todate .
But the low grade will require , as stated in the NR, a mill capable of 25,000 tpd processing capacity.
Marathons mill is 7000 tpd.
Plus, all of that material and construction crews must be transported to site by a long road that will cost
a fortune, require extensive environmental permitting process even before the mine and mill permitting begins and then face heavy snows during the winter.
Put all of this together and including the cost and time to incresse drilling to the level of Reserves ,
it is not an unreasonable expectation that SGD would be diluted to the extent that Marathon shareholders were or even worse....order of magnitude decline.
As I said, I love the deposit as it is currently depicted by drilling results todate.
But, I would never invest in it until mine construction is completed .
Likewise, that's why Maritine Pine Cove mill and its mining facilities are existential for NFG shareholders .
Uncle Eric was traffic director on that deal...