GREY:VITFF - Post by User
Comment by
MVargason Sep 07, 2023 8:49pm
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Post# 35625320
RE:Market Cap So Low Now Majors Must Be Looking????
RE:Market Cap So Low Now Majors Must Be Looking????Yes, crazytimes, that is the one thing that has kept me from bailing
Current market cap is US$ 302 million. On the surface that is insanely cheap for a 180k ounce producer in a Tier 1 jurisdiction but it is currently a marginal operation with gold just over $1900. Failure to produce anywhere close to 200k ounces the past 2 years has cost us dearly in terms of confidence in the competence of management and paying down debt. Now debt repayment has become a burden with escalating interest rates.
AISC costs per ounce have been and continue to be much too high. The cure for high AISC costs is higher production ounces, absence higher gold prices, because it is hard to reduce labour and energy costs.
When the company was talking Project 250 (250k oz/yr) it was based on year-round operations and modifications to the crushing system to screen out fines. But the latter seems to have fallen by the wayside - probably because they would have to incur more debt to pay for the additional infrastructure and they would lose 6-8 weeks of production - something they can't afford.
A major/intermediate could takeover the company for US$400 million, pay off the debt for another $180 million, spend $50 million on the required modifications and add to the mining fleet to easily get to 250k oz/yr. Not having to pay the salaries and bonuses of the CEO, CFO, CTO and SIX Vice-presidents would result in considerable savings. As I've said before this is a Management Enrichment Enterprise.
Let the bidding begin!