Bruce Jack ComparisonWe are early in on the game of getting this gold deposit into a game but clearly we are on to something very profitable by discovering so much high grade so close to surface with so little drilling. Kudos to Peter and the crew. They work for low wages and shares a lot of the time and even on small salaries they are buying their own shares.
If we did a quick view of a small mill that hit the high grade first it might look like this:
2000tpt mill @ 4gpt aueq where gold is 34 dollars a gram or our rock being worth 136 dollars a tonne for the first few years. If we look at mining and milling costs in the 30 dollar per tonne range with another 7 to 10 dollars in offsite costs and smelter costs we would be netting 90 to 100 dollars per tonne or close to 200,000 dollars per day. If we operated 300 days that would 60 million a year with start up costs in the 25-30 million dollar range in this extremely depressed mining environment actually helping us. So 6 month payback, especially if we started in Bayan Khundi where the gold is not in sulfide form. If we valued ourselves 2 times cash flow in that scenario we would be 100 million dollars or about a dollar per share at todays price less dilution/ revenue stream/ project financing. At 2000 tonnes per day we would be eating up about 600,000 tonnes per year, or producing 2.4 million grams or 75,000 ounces a year. There is well more than a million ounces in the ground here so a 15 year mine life is no question. The question is how long does the 4gpt gold ore hold up for.
In a world full of pain and misery in the mining sector the good management will guide the way forward to the next bull market, be it next month, next year or next decade. Cheers!