RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:RE:Narrow widthsI'd rather have more gold in the ground than cash in the bank. Cash in the bank becomes worth less due to inflation. Cynthia is using LME's cash to both explore/drill, ultimately increasing the intrinsic value of LME (good for shareholders), AND earning interest on the amount she doesn't immediately need to put to work. This is why have earned interest income of $191,110 for the first 6 months of the year.
Looking at the gold just sitting on the property (as it had not 1, but 2 past producing mines...which were only shut down due to a re-allocation of resources during WW2) the intrinsic value of that gold has increased and will continue to increase as we progress in the current gold supercycle (we are in the very early stages of this).
In fall 2018, gold was $1,525 CAD / oz.
The 90,327 oz of gold remaining in old mine shaft and in waste rock pile had an intrinsic value of $137.7 million CAD.
Today (Sept 5, 2024) gold is $3,405 CAD / oz
The 90,327 oz of gold remaining in the old mine shaft and in waste rock pile has an intrinsic value of $307.5 million CAD.
My next question is what will the price of gold be in the future? How high will it go during this supercycle? $5k USD ($6,757 CAD) ? $8K USD ($10,811 CAD)? $15k USD ($20,271 CAD)?
With these prices the intrinsic value of our 90,327 oz of gold just sitting on the property is:
-$610.3 million
-$976.5 million
-$1.831 billion
That's a lot of intrinsic value just sitting on the property and does not include any of the 10 million GEOs that she set out to prove.
Now of course, you have to factor in the cost of extraction. This is where you have to look at the key contractors she has retained over the years. A couple days ago we went over permiting, and how they have quietly been working in the backgound. Monitoring and compiling data. We also have DRA Global that has been retained to consult on engineering, project delievery and operations management. Cynthia even appointed Vikram Jayaraman, Senior Vice President at DRA) to the LME technical advisory board. LME has the team in place to get a rough estimate of mine operation costs, and that data is being shared with everyone that has access to the data room.
The Ishkoday will most likely be an openpit mine. The minaralization is all fairly shallow. This is wonderful news as it means the cost of extraction is expected to be low, which means it will be a very profitable mine (attractive in the eyes of a potential aquiror). But you don't have to take my word for it. The Greenstone mine (owned by equinox gold) is 45km down the highway from the Ishkoday. The All-in sustaining cost to mine an oz of gold there is $840 - $940 / oz. It too is a shallow, open-pit mine.
I feel very comfortable knowing LME has money in the bank, gold in the ground, key partnerships formed and specialized contractors engaged. Cynthia is in the drivers seat as we enjoy the ride through the current gold super cycle.
PtPdAu wrote: The cash can be accounted as 100% cash value but, and it's a big but, the suposed gold in the ground can't be assigned at 100 %. You forgot to take in to count the cost of mine construction, mining, milling, smelting, refining... the gold. All gold properties have some gold in the ground, few can be extracted at a profit.