RE:RE:Word to the wiseGoldenera,
The objective of the 7,000 metre drilling program is to outline additional mineral resources to the current 2.5 million ounces on Loncor’s 84.68%-owned Imbo Project which contains the Adumbi, Kitenge and Manzako deposits
Technically it is the 'Imbo' project the JV is drilling, of which Adumbi is a part. See this link, there is a map in it which shows where everything is. From what I understand, they are trying to prove up additional resources in the area. There are three deposits. Adumbi is the largest and lowest grade. In total there are 2.5 million proven ounces at 2.54 gpt betweent the three of them.
https://www.loncor.com/projects/mineral-resources/
I'm not interested in purchasing more at this time, but as I have said previously I would consider purchasing more in the 0.40 range.
Resolute Mining Limited (ASX/LSE: "RSG") owns 26% of the outstanding shares of Loncor and holds a pre-emptive right to maintain its pro rata equity ownership interest in Loncor following the completion by Loncor of any proposed equity offering.
Another interesting point is that Resolute Mining, while holding 26% of Loncor is not subject to dilution in the proposed agreement with Barrick, while the rest of us are. This means that we will all be subject to an increased 26% dilution on top of any dilution to fund our part of the deal, does it not?
OldGold,
Great post. Loncor simple doesn't have the resources to prove up what is probably there. They've sat on all this land for years, drilling a few holes now and then but not doing much else. That's why they gave up 65%, for a chance at some profits in the not too distant future.
Call me cynical, but I half expect as a common shareholder for the big players to try to find a way to screw us out of our piece of the pie, whatever that is after all the dilution. I could be wrong. What do you make of Resolute?
How could we be screwed?
Why would Barrick prove up all there actually is, rather than do the 7000m drill program, do the PEA based on that then demand Loncor cough up the money to fund a mine for their 35% portion. They know there is plenty of gold in the ground, but they can always do exploratory drilling after. It seems to me there is an incentive for Barrick to leave the resource uncovered until well after the PEA and upgrade the mine later. If the resource isn't proven, why would anyone swoop in and offer $400 million?
Does Loncor management have boots on the ground chaperoning the drill program?
I don't mean to imply anything, these are all legitamite questions. Barrick is a big big fish. And very often in the mining business common shareholders are told one thing and kept in the dark.
I know there is gold in the greenstone. Barrick knows. Loncor knows. One more question for. If it is so undervalued, why are board members not buying it up hand over fist? So far only one insider has bought about $30k worth of stock. No one else seems interested. If they who are informed better then us think this is going to be an 8 bagger (400 million?) surely they would purchase on the open markets.
mferguson,
Glad you enjoyed it.
As I said above, it seems almost as if there is incentive for Barrick to not prove up too many resources before the PEA. Or they have to pay more for the remaining 35%. It's great that Barrick is involved in exploration. They have the ability to find the gold. It's not so great that such shrewd businessmen are interested in capitalizing on Loncor. I don't know what the chance of common shareholders coming out on top is.
I saw the potential in Loncor several years ago. I saw the potential in Core Gold, which got sold from underneath the common shareholders. The devil is in the details. If you look closely at the small details you'll see that there are some funny things going on.
As for names, I believe the best time to get into Gold was before the recent bull run. Money has flooded the markets. Inflation has caused the markets to blow up. What we see in the current gold price is partly uncertainty wrt covid but also a projection of what inflation is going to be. What do I mean? $1900 or $1800 in 2021 is closer to real value $1500 gold a couple years ago before governments printed gobs of covid money. Food is getting more expensive. Fuel is getting more expensive. At the end of the day, all in cost of mining is going to be a lot higher. So the margins will be practically the same as they were a few years ago with lower POG.
If the 1920's after spanish flu are something to go by, I think there will be plenty of economic expansion. I don't know if we'll be making big returns in gold.