RE: RE: Holding with confidenceYes, it is disappointing that the 43-101 has reported only 44M tonnes of ore. When RGX released the East Hervieux drilling results, I sensed that the 43-101 report will not be comfortable. Michael has reduced the strike length from 1200 meters to 950 meters (any one found this earlier?), and thus, the two good holes are disallowed because the distance between the two holes with the rest of holes are too great. Thus, the 43-101 person may take a very conservative view on the resource estimation. Anyway 44 M tonnes are still great, still good for 14 years of commercial production at 3M tonnes per year. Also, the commercial production may take 5 years to reach, so 44 M tonnes will be enough for the next 20 years.
3 holes were drilled in Lac Schmoo before, and with 2 holes came back with good results, these are historical holes, not 43-101 compliant. Thus, we know Lac Schmoo will have more resources, and it should have more than 79 M tons in total easily if RGX decides to drill.
Even if we take 30M tonnes only (about 33% discount, and take only M& I portion only), each tonnes will have at least $700 metal value, and that is $21B, 1% of $21B is $210M, divided by 130M shares, we should get $1.61 per share. If we take the full 44M tonnes, the share price should be $2 by this time NOW.
Scoping study. We already know it is POSITIVE. It will include the cost of mill construction, road, and processing cost into consideration. I will still use $200 per ton (or tonnes) as the guide because this will bankrupt almost all gold and base metal companies already, and RGX claimed that the processing cost is LOW. A low-cost processing will cost more than $200? I do not think it is reasonable.
So, $700- $200= $500 profit per tonne, with the first module of production, it will be 0.3M tonnes per year, or about $150M per year profit. Assuming it will take $300M to develop the first module, the IRR will be 50%, and then after the first 2 years, RGX will make $150M pure profit.
As discussed earlier, I do not think RGX will build the second module until the first module is proven to be successful. So may be it take 2014 to get the 2nd batch of modules (may be from 2 to 3 modules at the same time-- this is purely speculation only on my part), and then finally the 3rd batch.