RE:RE:Proactive's interview with Danny Callow I found his interview to be flat. His previous ProActive interview on the revised Reserve announcement was quite the opposite : he was amped up on Mountain Dew.
One thing about Callow is that he appears to wear his emotions on his sleeve and his demeanour a good indicator of what is going on with AGG - in the interview it sounded to me like weak conviction behind his : "fairly good economics" assertion, made a couple of times :
1. AISC has gone from $782 /oz in the 2020 DFS to $972 / oz in the 2021 DFS; and
2. The 2020 DFS gold price sensitivity chart showed that at a total gold production of ~730,000 oz over a ~10 year mine life, a post-tax NPV of USD 329 million was achieved at a $1760 / oz gold price . The 2021 DFS gold price sensitivity chart shows that at a total gold production of 1,200,000 oz over a 16 year mine life, a post-tax NPV of USD 355 million is achieved at a $1750 / oz hold price. That's not a whole lot of increase in NPV for an increase of 470,000 oz in total gold production.
Costs (opex / capex) have obviously gone way up over the year - even Mali is not immune to "transitory" inflation.
What the mining plan really does is allow further ounces (to be proven up in the future) to be processed over the last 6 years of the life of mine and drive NPV up even further (assuming the price of gold co-operates).
And as Callow states, the amount of economic gold in the ground is quite incredible and easily slated to increase : "the gift that keeps on giving".
For Callow (and all of us shareholders) the Financing Committee has been formed (per the August Corporate Presentation), debt discussions held (per the Oct 2020 Coporate Presentation), Special Committee struck (per the April 2021 Corporate Presentation), outside independent advisors retained (per Callow's July 2021 interview), so now what ? What's next ?
Finally, Callow likes to remind us how far AGG has advanced from the 2016 DFS, which really is a more nuanced discussion.
The 2016 plan was an exceptionally simple mining process, low capex cost (less than 1/3 of the current capex) and yes, would have sacrificed ounces, but gotten AGG into mining and all-important cash flows (which would have financed further exploration) very quickly. There is no doubt that Callow has designed a very impressive aircraft carrier, maximizing / squeezing ounces, but it's stating the obvious that its gotta get built; put another way, 100% of zero is still zero.