Marmato Best CaseThe best case scenario for Marmato is that they mine all the high grade first, and they drill plenty of it (they are presenting Marmato high grade at the conference which implies there is more than a small amount). After they mined the high grade, they then use that accumulated free cash (plus straight debt if nessary) to expand the processing plant at Marmato for underground bulk mining, increasing the scale so that mining low grade is profitable. The 2012 Marmato PEA gave a low $500/oz cash cost for both underground and open pit when the processing plant is scaled up.
By processing the high grade first, they can avoid dilution or the need for a JV partner, maximizing profit for shareholders.This is helped by the corporate income tax dropping by 7% in 2 years, wealth tax eliminated, higher gold prices, and lower interest cost as Segovia pays down the debt.
Sound too good to be true?
Jeff Christian was predicting average annual gold price of $1700 by 2020-2022. His conservative predictiions in the past hasn't been far off the mark. Maybe this case for Marmato is possible.
The market has valued Marmato at zero for the last few years. With this upcoming gold conference highlighting Marmato, and high grade which mine investors love, maybe the market will start giving a more fair value to Marmato. The company that held Marmato was valued at $500m when GCM merged with it. If only half of that value is recovered, that would be several times the current market cap of GCM.