RE:$RNX: Best Q & A IMHO of the Conference, my transcriptpierreg,
Nice transcript. Agreed with your assesment. It looks like MS's goal is to have a good and economical milling solution for BH. So the mill is the crown jewel. Not a bad deal to get a modern mill for A$50M (or Cad$47.6M). We can look at other details of the deal later, but from the macro economic perspective, let's consider a few large chunk of money that would offset the price tag, so a general conclusion could be drawn: Is it a good deal?
- saving of $100/oz (assuming this is Cad $) @100,000oz/yr: C$10M/yr (yes, for every year)
- profit from 45,000 oz from Mt Henry open pit for the balance of 2019: 1315-1050 = US $265/oz, conservatively rounded off to 200/oz x 1.25 = Cad $250/oz x 45,000oz = Cad $11.25M = C $10M (rounded off).
- tolling contracts: a few $M? MS did not know the number (Reason: Westgold did not tell him, but I think he knew, if not he would get it during the second phase DD). Anyone would know how much it toll milling price $/oz for the area? How much RNX pays for the ores to be milled at HGO and at the other mill near the Super Pit?
Just those 3 item alone would off set the price tag of C$47.6M quite a bit. May be after 2 years ANX would save and rake in enough money to pay off this mill. Sounds like a good deal, since it would take more than C$100M to build a comparable mill and supporting facilities such as tailings ponds, etc. And it would take more than a couple of years to build and get all permits in place.
Some other people brought up the question of ownership, ES versus Peter Cook. Depending on the final conversion Cook would have less than 10% (he will be just a major shareholder, no BoD seat). But for Eric Sprott, his stake would drop below 10% as well, after an aditional ~70M shares, unless he scooped up a large chunk from the latest financing.May be he even wanted to sit on this BoD as well.
GH11
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pierreg wrote: Best Q & A IMHO of the Higginsville Purchase Option Agreement Conference was between Matthew O’Keefe of Cantor Fitzgerald & Mark Selby, that I transcribed today:
Matthew O’Keefe «Congratulations Mark sounds like a good deal ahead of you. Just a couple of questions on where you go from here or just on the mill? So, you mention it’s a new mill or relatively new which is good assuming there is not a lot of capital or further capital required there. But how are we going to fill this? I think with Beta Hunt we were looking at moving towards 2000 tons a day and then, there will be the ore available from Higginsville. How do you see the split of material coming thru that mill and where would it come from? »
Mark Selby: «As there is there today, right now Higginsville is filling their mill with a combination of open-pit ore from their existing properties plus third party tolling. What we will be able to do is take the bulk of that capacity and utilize it, we expect for Beta Hunt which will push out the lower grade, higher cost open pit mining into the future and we will just use their open pit resource to basically top up what comes from Beta Hunt and if their market conditions permit, we would continue to look at tolling arrangements, if that is more profitable than processing the other open pit ore on the property. »
Matthew O’Keefe: «So your plan though would be run it at highest capacity you can? »
Mark Selby: «Yeah exactly »
Matthew O’Keefe: «Are there tolling contracts in place that you plan to keep? »
Mark Selby: «Yeah, there are tolling agreements that we’re inheriting as part of the transaction, so yeah. »
Matthew O’Keefe: «Maybe one more quick one, on the exploration you’ve got a big property that you’re getting with this acquisition, how will you allocate your exploration focus? »
Mark Selby: «We will continue to focus our exploration dollars on Beta Hunt, we think that is the highest potential at this point in time. »
Matthew O’Keefe: «OK, great that is it for me, it looks like a good acquisition. »