RE:What's the Timing on Barksdale's Agenda? | Project Name | Project Purpose | Planning Status | Decision | Expected Implementation |
Sunnyside Exploration Drilling
EA
*UPDATED* | - Minerals and Geology | In Progress:
Scoping Start 08/16/2019
Est. Comment Period Public Notice 10/2020 | Expected:07/2021
| 08/2021 |
I really like this property, Sunnyside, and very optimistic but also being realistic in terms of buyout and timing.
Drilling plans for Sunnyside:
- Submitted PoO in 2018
- Comment period Oct 2020
- Decision July 2021
- Implementation August 2021
Keep in mind:
- No drilling can take place annually between March and September for ecological reasons. Earliest drilling would be October 2021
- Management is out to lunch if they think they'lll get any type of drilling permit or drilling for San Antonio before late 2021
- San Antonio drilling plans is a waste of money and time and is only being touted because no other significant news will be coming out for another year
- Same reason why they're consolidating small land parcels but Sunnyside is the 'Crown Jewel' as per the CEO/President
- The former operator (Regal Resources) had submitted a PoO in 2016 for up to 6 drill holes for Sunnyside with permit approval set for 2019 and could have started drilling last year but management decided to start all over in 2018. Waste of 2 years. To get a buy out only a couple holes would be needed to confirm (TCH2) historic drilling and take some big swings to show the size. I appreciate the new one is more expansive, drill up to 30 holes, but delayed things by 2 years. Why not submit a new or amended PoO after you can actually get drilling. I don't understand the logic of wasting 2 years, probably why there''s been new directors and management since 2018.
$24 bucks would be nice, but here are a couple factors:
- Barksdale needs to spend a lot of money on the property, issue shares, and cash payments to get to the 67.5% ownership on Sunnyside
- That's about 10Mn in shares to issue and $10Mn in spending/payments
- There is also an acceleration clause payment payable to Regal if there's a property transfer (buyout) and a 1.5-3% NSR on Sunnyside (MD&A)
Where will all this be raised? As it sits just the shares and payments/work commuttments alone are more than the current market cap. Dilution will come, plus money to raise for operational expenses once permits approved will eat more away at the final price.
I think the buy out amount will be a lot less than $24/share and won't be at Arizona Mining buyout levels as they spent hundreds of millions to get the property to a value of $2.1Bn CAD. Also South32 already owned 17-18% so topped up with $1.8Bn CAD to get the whole property and paid pennies on the dollar for proven ore reserves for the in situ value which is normal for mining. So if Barksdale does an Arizona Mining they will need to prove out the resource (tonnage) to a major, but will need to spend 10's of millions of dollars and several drilling seasons (5 months a year) to prove it all out and raise more capital (dilute shares more) each season to end up with a figure ($/share) a bit more than what will likely be offered by a major in a year or two. $2 Bear case $3 Base case $4-6 Bull case.