RE:RE:RE:tke outComments on PRB - Borden Lake Resource Estimate.
Hello FrankyB
Your number of 1.6Moz is on the very low side. It could be an approximate number for PRB high-grade core resource for in-pit constraint scenario up to the so called the "Wedge".
But when G put in the offer of Cdn$526M. PRB has consolidated the portion with a 50-50 JV and bought up the Wedge for a hefty $35M (people estimated this portion would have some 0.2M oz of high grade, but 35M is just a tad rich ($35M/0.2Moz = $175/oz Au in-situ). But in the big scheme of things ($526M), $35M is worth for getting rid of a big headache which may require tonnes of Advil...The idea is to make the package attractive to G. So PRB got G's attention.
Another thing is that this Wedge acquisition would bring the pit closeer to the lake shore with an option to continue the open pit to mine the deposit under the lake bottom (shallow lake) via coffer dam, instead of going underground (more expensive).
Back to the resource estimate. The number often quoted was 4.3MozAu (with the high end of ~6Moz if the IF was generously included). Even with 4.3Moz the cost per ounce in-situ for Borden was something over $100/oz which is quite decent ($526/4.3Moz = $122/oz). But G did not really care, since it paid for Borden deposit with shares. So, 50% or 60% premium means nothing (chump change) for a $20B company. G just wanted to snatch PRB from AEM (revenge for losing Canadian Malartic). Yup, people have big egos.
To sum up, I would speculate that it would not be unreasonable to project something like 4Moz (and a bit more) for Lamaque South, and the PRB example (lower grade around 1gpt compared to ICG) could be followed by a potential suitor (it would not surprise me to see G and AEM in the mix, not just ELD). A similar example to consider would be IMG acquisition of Cote Lake for $603M (6.9Moz @ 0.89gpt/lower grade than Borden)...$87/oz in-situ.
Say, first salvo across the bow: 2 (100% premium) x SP of $0.57/s x ~440Ms (OS after June) =$501M (almost like PRB offer from G).
We can go on from there. Just my speculation.
Note: I left Lamaque North and the Sigma Mill on the side for the "new ICG", just like the new PRB after Borden, using the same G model.
GH