RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Extension Permit Granted!For an indication as to the economic metrics of Diakha, the best guide is B2Gold's Feasibility Study for Fekola just a few km's to the north. This is exactly the same trend and characteristics. Cash cost of Fekola is just over $500/ozUS for the first 7 years. So this project will be fine and $800/ozUS for gold and make a good return at $1000/ozUS. $1500CDN is not necessary although we are already higher than that at a current price of well over $1600CDN.
As far as the size of Diakha goes, now that the permit for the extension has been granted, an unconstrained pit in the south of Diakha is about 1.1 million oz so far and the deposit is open in all directions, including at depth. The geochem on the newly granted permit extension indicates that the extension with yield about 1.5X as much as the original deposit. So it's safe to say that this is going to be a 2.5 million ounce open pit, low cost deposit.....up to 3 million oz.
Now here's the bigger picture. MXI's JV partner IAM Gold has a sister deposit on the same trend in an adjacent deposit at Boto that is currently undergoing feasibillity study. There are about 2 million oz in one of Boto's deposits alone. So between Boto and Diakha, this is a huge potential and there will soon be mine plans announced by IMG for Boto.
Furthermore, the new permit in Karita is also adjacent, is 100% owned by MXI and has artisanal workings all over it in the trend area. The artisanal working have always indicated a high grade low cost open pit potiential and that is not likely to change here.
So one of two things are going to happen.
1. 2016 drilling is going to shoot new ounces and potential through the roof.
2. IMG is going to buy out MXI much sooner before that happens so they don't have to pay as much.
That's the thesis for buying into MXI. You're looking at a triple by the end of 2016 or a near term almost-double in a buyout. It's not a long term hold.