RE:RE:RE:RE:RE:RE:Summary NewsTreetop and bobvee
At least we can have some honest discourse based on these posts. Bobvee, you have obviously done some homework. My comments are as follows.
Re: nugget or coarse gold effect and it's relevance Treetop we have different opinions. You say it's promotional BS and that's fine. Based on the bulk sampling results that clearly show an average grade bump of 65% I would say the nugget effect is very material especially when it comes to arranging production financing.
The bottom line is that with this type of highly weathered coarse gold deposit (which bobvee astutely pointed out is very unique), the smaller the sample size the more understated the gold values are. I think you have to understand some of the history here. AGG management didn't understand what they had until Chief Geo, Pierre Lalande (former Iamgold Africa Chief Geo) joined them. They originally were doing DD holes with very small sample size. Lalande explained his theory about the deposit, having seen this geology in other parts of WA, and sure enough when they started RC drilling with the larger sample size they had a big grade bump. They increased the diameter of the RC drill in order to get even larger sample sizes and sure enough the grade bumped again to the point of where AGG is at now. Lalonde always theorized though that only through bulk sampling would you start to get a true picture of actual grade in the ground and the bulk sampling program once again proved him correct (65% grade bump). There are very few geo's out there that would have had enough experience to figure this out.
On to some of Treetops's other points.
Why aren't investors lining up??
- poor market conditions for juniors
- Mali geopolitical risk (which was definitely a factor 12 months ago but not now IMO only)
- skepticism - show me (as bobvee said, where are the comparables for a possible gravity mining operation of this scope??)
- lack of working capital
- poor IR/communications strategy
- all of the above
Take your pick and yes management credibility could be an issue as well. I won't defend management as they have made some significant errors with the benefit of hindsight which is always 20/20. Who amongst us doesn't make mistakes though and mistakes aside they will get this through feasibility which hasn't been an easy thing given the incredibly poor macro environment for juniors in the last 3 years. I've always said never criticise a person unless you've had a chance to take a walk in their shoes.
Re: the violence issue, there is no doubt that is an issue that has been damaging but it will pass more quickly than you think and the Malian authorities have been embarrassed by what has transpired and I don't think it will happen again. Keep in mind the government has a 10% stake in this plus a royalty stream they desparately need.
BTW, why do you think the artisanal miners are flocking to Kobada??? It's the coarse gold that they can easily extract via........gravity separation.
Smallish deposit - Once again that's a matter of opinion. I don't classify a 43-101 qualified 2.7 MM oz deposit thats wide open a smallish deposit. Internally they know they have 5 MM + oz and possibly a lot more. That's enough of a resource to easily support production of 200,000 - 300,000 oz per year which would be very attractive to a mid-tier producer.
As for risk, there will always be risk in West Africa. Anyone of these countries can blow up at any time including Ghana. Ghana was in turmoil as recently as the 1980's. Mali is by no means a safe haven but they have a strong pro-mining code, they have NEVER expropriated a development property or an operating mine and not one operating mine interrupted production during the latest instability. I'd take Mali any day over Argentina, Brazil, Congo, Equador, Mongolia, Russia or Zimbabwe to name just a few.
Anyhow, contrary to what some on this board think, I do fully understand the risks with AGG but I also understand the potential rewards better than many. My educational background is hardrock geology even though I only worked in that area for a couple of years before moving on to business. I do NOT profess to be an expert by any means but I do have a better grasp of the technical side of things then your average layperson may have.
Mr. Market definitely doesn't like AGG at present but for better or worse I've made my bet that Mr. Market will eventually come around to my point of view. At the very least once the FS is released I think other WA miners are going to start to pay more attention. Historically I've made some of my best gains by being contrary to the market.
GLTA