PINL:VLTAF - Post by User
Comment by
HonestAbeon Apr 30, 2012 4:47pm
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Post# 19853508
RE: VTR mentioned
RE: VTR mentioned Finally a mining analyst that actually makes some sense. Especially the part about synergies between Orezone and Volta's gold deposits that are basically across from each other. It would make a lot of sense for a merger between these two companies because what they can accomplish by doing so is to fastrack and initiate production on Orezone's oxide portion (i.e. Phase 1) which would take maybe two years at a Capex hit of maybe $300M for 150K ounces annually. And this would buy some time for them to fully define the limits of the high grade Kiaka South deposit and to use oxide cash flow to fund the development of this high grade starter pit (i.e Phase 2) without any further dilution or debt. Which in turn buys them even more time to properly plan out the combined mega operation of Orezone's sulphide portion and Volta's Kiaka Central deposit (i.e. Phase 3) which can then be funded partially from Orezone oxide/K.South cash flow forming the equity component when they negotiate for debt financing. Or alternatively at this stage they can decide to sell the turnkey operation to a senior who has the funds to buy a 300-400K ounce existing producer with immediate expansion for another 600K of long life production (total 1B ounces annually) that requires maybe an extra $850M to $1B Capex.
And the beauty of this is that the combined market cap for both companies at current prices amount to under $300M! Nobody wants any African gold stocks right now! It is buying time for the enlightened.