RE: HKEX Listing Scenarios, Recalculation Gregetz,
Appreciate your contribution and thoughts about this HK listing and other items related to Majestic. Although it has been common knowledge about the HK listing "want" for some time, I often wondered why it was the route to go vs. just a TSX listing.
My immediate thoughts are that Majestic does not have to raise substantial cash, so I see scenario 1 as being the least needed from the company's perspective - because they are, what, a quarter or two from hitting the high-grade zone? When that happens, they are going to be producing maybe 8k - 10k oz per month, at minimum, and produce 100k oz/year for 22 years, with substantially more production in years 1 & 2.
So, I tend to think your second scenario is more plausable, and I would think there are a few reasons - some well known - for going the HKSE route:
- Location of Song Jiagou and the obvious higher valuations in HK - some 5-10 times what we see today with Majestic
- The desire to decrease mine life - and thus, the requirement for a second new mill - which would reduce mine life to 11 years with 200k oz to 300k oz per year. That could be half a billion dollars in Revenue per year depending on the grade zone they are hitting in a particular fiscal year
- further to the above, the notion that the resource base will increase significantly at strike and at depth - the gold didn't just come from nowhere, and the nugget effect does give arguement for deeper potential. Free gold is key, and the Feb 28th? release alludes to how the free gold content could significantly increase the resource as it stands. Add gold at strike and depth, and you have significantly more gold, and an even greater need for two 6000TpD mills.
I see the above as being the "need" - although it isn't a necessary need. However, you build that mill in 1 year, as they did for the first 6000 tpd mill, and you double your throughput, revenue, profit etc. That, my friends, is the key.
Now, if management can get off their aaarsss and update shareholders on their plans and priorities, aside from hitting the high-grade zone and ramping up production.
Just my thoughts... looking forward to hitting the high-grade zone, to a HK listing, to expanding the resource and to hopefully expanding the processing rate - because the cashflow from that would be incredible.
B
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