RE:RE:RE:q3All great points MVargas and thanks for the clarification on the Recovery rates!
Your following points in particular have to make one wonder what's truly going on with VG:
"Last year the low flow drip lines was a convenient reason (excuse) for missing guidance. This year it is the conveyor belt breakage. Why not take a week to repair the belt and replace it during the 1-month scheduled maintenance period next quarter?"
"The real issue is not being addressed and that is the declining tonnage of ore mined and stacked. Year-to-date the quantity of ore mined and stacked is 20% less than last year. How is that ramping up to a production rate of 200,000 oz/yr? If you are going to mine and stack 20% less ore, then over the long run, you are going to produce 20% less gold."
Stacking of low grade ore on the HLP, drip line valve issues, broken conveyor belts that apparently need replacement versus repair during the worst time of year, etc.... VG management has to know that if they are going to mine and stack 20% less ore that this will have a negative impact on production results and that should be a key focus, yet it seems that nothing is being done in this regard to address this issue. So this begs the question WHY?
At the risk of being labeled a conspiracy theorist, is it just possible that VG management is perhaps intentionally not proactively addressing these issues because they want to keep the share price down while they proved up more ounces at Eagle and Raven? I think McConnell is convinced they have a district scale resource and not just a single mine and he is hell bent to prove it and has no interest in selling VG until the Raven deposit in particular is better understood. From the Raven drill results so far, they are definately onto something there and the upcoming Raven drill results, which we should start seeing over these next few weeks / months will tell the tale.
McConnell has about 750,000 shares at an average share price of about $8.00 bucks and he hasn't sold a single share and recently bought a few more (albeit a small amount). I've spoken with McConnell more than once in recent weeks and it's pretty clear that he is looking at the big picture (i.e. District Scale). I mentioned the market's concerns with his perceived conflict of interest in Banyan and his reply was that he is concerned that if VG doesn't secure an interest in Banyan that another player will move in and take them out cheap. With his wife at the helm at Banyan, he has to know more about its prospects than we retail investors will ever know I'm OK with that move.
Banyan apparently has about 4 million (probable) ounces and VG about 3.2 million (proven and probable) ounces (as per 2019 Technical Report), but that's not including the ~ 2 million ounces that I expect will be added when the 2019 Technical Report is updated later this year. So VG and BYN should be sitting on somewhere around 9 million ounces combined. Apparently the big dogs (the Barricks, Agnicos, etc) begin to get interested in a takeover when there is a district scale resource of around 10 million plus ounces. So is this perhaps why some of the earlier financers of VG abandoned ship when they realized John's vision and that a takeover wasn't going to happen ...YET.....they didn't want to wait around while John works toward a district scale resource?
So from this perspective, are this year's mine operations issues as serious as they seem? Are these issues being seen by VG management as an advanatge in helping to keep the share price down and a takeover at bay until the time is right? Frankly, I don't know but VG has a very experienced upper management team and I find it difficult to believe they can't get the mine operations issues addressed and production up to 200K per year if they really want to.
In my opinion, today's 15% drop in share price is a great buying opportunity for those with a longer term view. In the meantime, the day traders and short sellers are enjoying these little blips so have fun for now. Some shareholders are forgetting that VG has incurred a lot of expenses in 2022 (truck shop, water treatment plant, drilling, etc) that are lowering EPS, but these major expenses will be behind us in 2023 and unless the gold price tanks considerably over the next 12 months, I expect VG is going to do very well in 2023.
I'm looking forward to the upcoming Raven drill results and the updated Technical report at year end. If VG book value is about $8.35 a share now, it's going to be higher once the Eagle and Raven results get factored in. I've got about 33,000 shares and every dollar drop in share price is a $33,000 hit on paper and so to maintain my sanity when I see days like today, I just think how McConnell feels watching his shares drop $750,000 in a single day! Until I see him selling I'm not too worried. My guess is he's looking for a lot higher share price than in the $7 or $8 range and so am I.
For what it's worth, I see BMO analyst Andrew Mikitchook has just lowered his price target to $15.00 but is still maintaing a BUY rating.