RE:RE:RE:RE:RE:Eagle costs and market reaction todayNickelOne wrote: The latest projection for capital expenditure of 530M canadian is actually 43% higher than the one specified in FS (370M canadian dollars).
Remember: the FS cost estimate included two in valley leach pads and two open pits. Olive-Shamrock open pit is not even permitted (there will be costs associated with that process,too) and the second leach pad is also not built. Where is the money for those expenditures coming from? And of course, "unexpected geological conditions" are highly possible when building the second leach pad.
Expect Operating Costs and All In Sustaining Costs to be at least 50% higher than the ones specified in the FS. With AISC of $957/oz the "high margins" are long gone. Net Operating Cashflow for Y1 (2020) will barely reach 55M.
Expect a 4.5 -5 years years payback, debt refinancing and a lot of pain ahead.
GLTA
Still hoping to get shares at 40-41 cents after posting that there was another 150 million shares of dilution coming?
https://stockhouse.com/companies/bullboard/v.vit/victoria-gold-corporation?postid=29453234
Ore to the Olive leach pad happens in Year 9. VIT will be flush will cash long before that happens and the cost to construct the heap leach pad is a part of AISC anyway and would not have been included in the FS cost to construct.
Sure the construction cost overruns were unfortunate, but manageable without incurring additional debt so the debt payback period is not affected. IMO more debt would have been better though than the additional 7 - 8% dilution.
There is absolutely no basis to expect a 50% increase in operating costs and AISC. In John's most recent interview he reiterated that at $1250 gold, VIT will generate US $100 million or C$133 million of cash flow per year. By 2020 the POG is likely to be much higher, but even at the current gold price, the current market cap is just over 3 times next years cash flow.
VIT's total debt once in operation will be less than US$250 million which is consistant with the forecast of a 2.7 year payback at current forecasts for operating costs and AISC and a $1250 POG.
Is there any risk that operating costs could be higher? Sure, maybe as much as 10%, but the POG could very well be 10% higher than $1250 too and the FS was based on a 78-cent dollar.