EAS.v - Production for $1,000,000/month gross profits Looking forward to the permit being granted, how will the construction financing of $1,500,000 be financed/paid in order to get $1,000,000 per month gross profit cash flow? Payback based on gross profits is less than 2 months once everything is at production capacity.
What is the likelihood of permit granted? Couple points. True that itching is 100% until it is actually decided:
- the IFS (Indonesia Feasibility Study) showed support for the Sangehi project
- the IFS is equivalent to the federal body approving and the current AMDAL to be held is the provincial body equivalent
- the likelihood of federal approving while provincial not approving is likely low
- with covid and amongst the government to relax red tape to increase economic activity (potential to even remove need for AMDAL) increases the odds this will be passed
For getting Sangehi to 1000oz per month production yielding $1,000,000 gross profits per month (or $700,000 US per month with 70% split with other stakeholders), this would be a high dilution factor if shares were the means of financing. Other none dilution means such as debt and royalty is possible. Royalty with a Japanese company was mentioned in latest CRUX interview (https://youtu.be/3AGJAsuTIfQ).
If/when AMDAL is complete and permit is granted pending payment of dead rent tax, all the approval bodies have given the nod and the risk is off. The rest is all money based. When the only thing to realize $1,000,000 CDN in gross profits per month is an upfront $1,500,000 CDN, it seems like a no brainer for anyone who has $1,500,000 to spare.
The royalty of gold produced seems like a win win situation in a royalty deal for the royalty financier, and as mentioned, an increase in valuation of $0.11/share based on 1000 oz production per month. As more leach pads are constructed, multiplier effect of $0.11 occurs along with addition value created based on drilling and getting Miwah online. Miwah is $0.86/share alone.
Based on numerous scenarios once permit is granted, the return on current $0.05/share is:
- at least 200% based on production of 1k oz per month, or equivalent of $0.11/share
- to potential 1900% return when $0.11/share from production plus $0.86/share in Miwah value is added to EAS books, totalling $0.97/share.