RE:More cashflow. . . with large upside. . . chopchopbc,
Since when does merging one marginal low grade gold deposit with another subeconomic low grade deposit result in a successful profitable company? Yes, there is more gold production, but two losses added together make a bigger loss!
After taking a look at the Florida Canyon's historical gold production, average recoveries from 1987 to 1999 were 66.85 percent, but that was with average gold head grades of 0.67 g/t. During a more recent period from 2007 to 2010 when head grades were 0.39 g/t gold recoveries were only 42.5 percent. The average gold grade on the current mining plan is 0.4 g/t, so recoveries are unlikely to be the 73 percent predicted by the PEA consultant.
The current flowsheet is flawed in that there is no recovery of the sulphide ore which grades 5 times higher than the oxide material, plus there is no gravity circuit, so you have to wait a year to recover the gold that is place on the pad today. On the financial side selling 150,000 ounces forward at $1275 USD per ounce does not make the project more profitable, and what Alio shareholder wants to inherit a groundwater contamination plume? What is the liability associated with that?
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