How events are likely to Proceed1.. announcemt that the Pine Cove mill will resume production of Stoger Tight gold resources
2. forced exercise of 90 m 7 cent warrants to raise over $6 m
3...Modest Financing probably by NFG or the TRIO of Dundee/Sprott/NFG
4...additional exploration of HD mine 3 new discoveries , initiation of grade control drilling at HD , needed for mining bench configuration and mine start up
5..HD mining Begins
On the lalter point, Pine Cove has a milling capacity of 450,000 tons per year.
ROM ore grade of 4.5 grms per ton will be upgraxded to 6.8 grms per ton using x Ray Sorting as per the 2022 FS . ROM ore .
So, we have 450000 tons times 6.8 grams times 95 % recovery divided by 31 grms per ounce = 90,000 ounce per year.
In 3 years, at current reserves HD open pit will be mined out and UG mining of Orion will begin.
Unless, 2022 drilling and planned drilling find more open pit resources at Golden Anchor , area 22 and the third new discovery within the HD mine site or nearby
Assuming $1850 POG =$2500 CAD per ounce, the first three years of the current defined HD open pit will generate $675 million CAD in revenues and about $275 million in Free Cash flows less $75 m to refrubish the Nugget Pond mill which is about $200 m in remaining free cash to the cash position which can fund exploration and development of the other 5 advanced discoveries such as Deer Cove etc.
Clearly, New Found Gold have done these calculations in a manner more techincal that I have .
Their due diligence of the Pine Cove mill and potential rich cash flows from the HD open pit mine are now possibly complete.
They intend to mine their own developing open pit discoveries but it will take several years for these to get permitted etc.
Management have made obvious that early cash flows to fund current exploration is needed to take the share price to the next level.
The solution is obviously acquiring MAE and spinning out its advanced exploration projects along with the Nugget Pond mill as a separate publicly listed NewCo .
Every body wins under this scenario , including Dundee and Sprott , MAE shareholders and NFG shareholders.
MAE NewCo alone will have substantial value with a fully refurbished Nugget Pond mill , capable of 350,000 TPA and able to toll mill Ming Copper/gold as well as new discoveries like the high grade Deer Cove discovery.
Other possibilities exist like Auteco ......