FG First pour 2022! -If we are lucky? Guyana gold, a political test for Macron
https://www.lemonde.fr/economie/article/2017/06/30/l-or-de-guyane-un-test-politique-pour-macron_5153594_3234.html This article is well worth the read. Now, the Russians according to the article are talking about a first pour in 2022! However, I don’t think this date takes into account any intense legal confrontation in the French courts. If this does occur add at least another year to the whole process. I think this article suggests that such environmental opposition is coming and that while Macron may support the project, others (e.g., Hulot) in the government may not. Interestingly, the article does suggest that NG does seem intent on building this mine and that the Russians have French Banks that are ready to lend them the money.
I believe that this mine will eventually be built by NG or another(s) but again I don’t think any company is going to be in a rush to start buying out CBGDF (and/or NG), or breaking ground for the project as we still await the ESIA (latest date Dec 2017) . We may well be into 2018 before we even begin the public debate, which I feel will be longer rather than shorter with this being the first major gold mine in France/FG. There may well be French demands for more detail/
documented information on the mine’s impact/structural development based on the ESIA findings, and then comes the possible organized legal opposition. I do not think that NG with all their other mines functioning/coming on line will be that unhappy with any slowdown in this process. However, the problem is much more CBGDF as a small low capitalized explorer re., any loans or streaming arrangements they may make and have to extend out.
If we really are looking at a 5 -6 year timeline for this FG mine production then CBGDF’s Guistra is, I hope, doing some very creative thinking. Let us speculate that we are in the beginnings of another gold bull market which may last 2 – 4 years. Guistra wants his stock to be able to take full advantage of any significant rise in gold pricing. Being hamstrung by a ‘feuding’ process in FG (even if the prediction is there will eventually be a successful conclusion) will see CBGDF SP gain minimally, while other explorers will draw investors through having unencumbered on-going gold oz discoveries, compounded by an advancing gold market. For NG FG will have minimal impact (when they return public) on their SP with their approaching 1 mill oz., annual production, however, for CBGDF the situation will be seriously negative.
As I have suggested splitting the Nevada and FG projects into two companies would unleash the value of the American deposit which already is over 1.5 mill oz inferred and would grow in project ozs, while also being compounded by an increasing gold price. Cordex and Andy Wallace would lead this company project with all the kudos those names bring to any Nevada gold explorer. In fact, it is the initial exploration period in which the project ozs are expanding under a well led team with a positive gold market that can really multiply a SP (but again, not when the stock is seriously slowed and entangled in another country project). Presently, as others have also suggested, I fear that Nevada is priced in at almost zero to the CBGDF SP as FG has taken all the limelight and will continue to do so –negatively - if things really become controversial.
As was stated by Alta we might have a Nevada buyout or mine before a first pour in FG. However, If Nevada CBGDF can go to 2.5 – 3.5 mill ozs indicated/inferred then a JV is very likely and in a bull market equally so a buyout with all that means for a ‘focused’ SP. Who knows Bolo might by then be another Nevada spinoff after Eastside goes.
The FG CBGDF stock would be a much longer term hold gradually benefiting holders re., SP as production closes in. At 3 mill P&P ozs., to dilute CBGDF down to 15% NG has to spend I believe in the region of US$8/900 mill on the mine buildout; worst case scenario for CGBDF (without loans/streaming) would be a 15% holding, though it is unlikely that NG would come close to the diluting $$ amount spent based on the costs of their other successfully built mines.
So, overall, as a CBGDF stockholder I am looking now based on my reading of FG to see Guistra separate these projects. If FG is unlikely to see a buyout in the next couple of years for CGBDF and if 2022 is even a realistic first pour for NG, then regardless for me Eastside is now the potential explosive SP growth project. However, failure to split the company will see real SP value lost, especially if we have any extended bull gold market. As usual, JMHO.