Just for PhilI know everyone here knows this already, however a quick re-cap if you will:
In August of 2019, Stan Bharti along with F&M got involved with AGG.
At the time, based on the 2016 DFS, the Resource was 912,000 oz, M&I 622,000 oz, Reserve 511,000oz, and 8-year LOM – I think anyone would agree this wasn’t something you could seriously take to the bank and be considered for financing. Especially with the GP at the time hovering around 1,350oz and just breaking out of its bear market hibernation.
It was stated and has always been conveyed that the drilling and technical info on the Kobada permit wasn’t well organized to convey the potential of this project.
In June 2020, an updated DFS was released to compile the pre-existing data along with minimal additional drilling to fill in the technical gaps. This translated to a 2,330,070 oz reserve, 1,191,260 oz M&I and 754,800 oz Reserve, with a 100,000 oz annual output LOM of 9.4 years.
Although substantially better those numbers are still not considered bankable by lenders as everyone knows a 10year LOM with 1mil Reserve is somewhat of an industry standard box to check off.
An additional drilling campaign and test works to include the sulfides was understood to considerably boost the projects true potential based on all the technical information on hand.
October 2021 an updated DFS was released with a 3,141,000 oz Resource, 1,711,000 oz M&I and a 1,252,500 oz Reserve with a 16-year LOM.
Based on the technical reports in 2.5 years, the overview of this permit, regardless of share dilution, Stan Bharti and F&M etc etc. is as follows:
| | 2016 | 2020 | 2021 | Percentage Increase |
| Resource | 912,000 | 2,330,070 | 3,141,000 | 344.41% |
| M&I | 622,000 | 1,191,260 | 1,711,000 | 275.08% |
| Reserve | 511,000 | 754,800 | 1,252,500 | 245.11% |
| LOM | 8 | 9 | 16 | 200.00% |
Based on the DFS technical reports, this company has substantially better positioned itself for a serious financing. I honestly believe, although it’s been joked about how long Danny’s been waiting by the phone for a finance offer, everyone knew they were not in a serious position (until now) to be considered. I think AGG has only recently put themselves in this place as of the DFS 2021. Meaning, focusing on finance discussions have only been a real thought/possibility as of 3-4 months ago.
Financing 165mil is of course difficult with a Market Cap hovering around 30mil+-
The reason for this of course, which has been brough up many times is SHARE DILUTUON and cheap PP’s with access to even more warrants.
AGG’s has removed all ties with Forbes and Manhattan, and majority of legacy warrants are expiring over the next 6 months.
| Warrant Expiry | Issued | Strike |
| Jan 31, 2022 | 3,932,275 | 0.25 |
| Mar 9, 2022 | 1,710,525 | 0.25 |
| Apr 23,2022 | 7,015,000 | 0.25 |
| July 29, 2022 | 11,765,500 | 0.40 |
| Aug 10, 2022 | 11,914,350 | 0.40 |
| Jun 24, 2023 | 15,333,072 | 0.25 |
| Jun 24, 2023 | 810,165 | 0.15 |
| Nov 8, 2023 | 19,394,142 | 0.25 |
| Total | 71,875,029 | 0.275 |
It would be wonderful if an asset price was simply based on its intrinsic value however the markets are the markets, technical analysis and price action cannot be disregarded. From the peak August 2016 candle to the peak close on the August 2019 signifies the prices long term downtrend for all sorts of reasons. The bottoming price of .115 closes in a descending triangle pattern which is looking to test the inter-trend line resistance by the end of the month. This could break to the upside or get rejected, I guess we’ll find out. The apex of this inter trendline concludes end of May, so we will know by then. The outer trendline resistance apexes April 2023, which can be tested and or broken at any point. If/once that breaks, we are looking to test the previous wave highs at .34, .55, .68 and .865 that’s a market cap of 74mil, 120mil 147mil and 187mil respectively.
You can call that Hopium if you’d like but that would be the case if financing was moving forward. Which brings me to the next chart
This chart is Market Cap weighted so it removes the dilution of shares. It looks VERY different. The 2016 high is roughly 30mil, the 2019 resistance is also 30mil, 2020 it broke above to roughly 40mil and right now it is testing the upper trendline resistance at 33mil, looking to break out. It’s apex is fall of this year (either breaking to the upside or breaking to the downside). Interestingly timed with the expiration of warrants. If it breaks to the upside testing .34 or 74mil MC is highly likely.
This chart shows that although the value of AGG per Market Cap hasn’t significantly gained momentum the MC chart is Bullish, looking to break out. With the SP at the lows and bottoming and the Market Cap at the Highs I see inventors coming on board with AGG’s potential of financing. A bullish break in SP sends the market cap to 60-80mil which makes financing more feasible when negotiating. This compounds as good news comes forward with financing negotiations milestones.
I feel strongly that the Market Cap and SP was capped until all legacy issue were dealt with before allowing this asset to be marketed up.
Now comes the Year End Letter, the most positive information I gleaned from this is that management is NOT giving any more excuses. There’s no additional drilling, test works, management re-structuring etc.
The statement is loud and clear.
“As we move into 2022, the principal focus of our growth strategy next year is to complete the financing of the Project so that we can move into construction phase.”
I think, as an investor in AGG this management team has 1-2 years to put this asset into production. If they really push for more drilling in late 2022/23 theres a different discussion to be had.