RE:RE:RE:RE:RE:Where my heads at The main problem with valuing LME is that there is a large range for a buyout and the number of GEOs is in question. There’s been no public information that would indicate 12M+ GEOs. I do believe LME is an amazing property with incredible potential, so it’s entirely possible there are these significant amounts of GEOs, I just don’t see how that can be deduced from an analysis of the Technical Report.
Lambo, I believe you mentioned you came up with your GEO amount from your analysis of the report. I do remember the calculations you posted back in June. I’m guessing that is the analysis you’re referring to, which was super useful to see the range of gold ounces. I did look back just now and believe the math might be incorrect when converting to GEOs, though.
You had taken the amount of gold ounces and multiplied it by 9 to get the GEOs because of the average 8:1 mining ratio (8oz silver for every 1oz gold). I always felt like that math seemed a bit off, but I hadn’t had time to look into it further until now. After a bit of research, I’ve found the calculation for GEOs isn’t a straight multiplication. It’s (silver ounces*silver price)/gold price = GEOs. For example, taking your highest range of gold ounces, which, funny enough, was about 2.5M gold ounces. If we assume 8oz silver for every 1oz of gold, we’d have about 20M oz of silver. (20M*$34)/$2750 = ~250,000 GEOs.
But if this isn’t how you got to the 12M+ GEOs number, I’d be curious to know what your analysis is. This just makes a lot more sense to me since silver will give us some value but not as much as the original calculation. Even if we had a great amount of silver, like 50:1, that would be more like 1.5M GEOs (which is still fantastic).
USCG has deduced 2.5M GEOs from the NI 43-101, which makes sense in the given range of tonnage and gold grades. I think it’s also the only GEO number we’ve ever been given and it’s come after 14 months worth of research. To me, the proof is in the pudding.
DAM$, you said it yourself, the 2.5M oz is what they could confirm with an MRE right now. I believe Doug also confirmed this when he mentioned all the drill holes were included in the report. So, I believe that’s where we’re at, potentially minus the drill results from the past year (which were incredibly good).
That being said, I wouldn’t be discouraged even though what we guesstimate to be the actual total number of GEOs is just that, a complete guess. I strongly believe significantly drilling the Sturgeon River Mine area would result in an additional indicated 5M GEOs. This would still leave potential of another 5M GEOs in other areas of the Ishkoday (Twin Falls, Brenbar, CRK, etc.). To use round numbers and being optimistic, this would get us to about 7.5M GEOs measured and indicated and 5M GEOs inferred. That is an incredibly valuable open pit mine that I think would warrant $20+ per share.
Currently, the difference with other valuable mines in Canada is that a large part of their GEOs are measured & indicated. Mostly indicated from what I’ve seen, which is moderate confidence. That’s why we need to drill more. To get us to a point where buyers are at least moderately confident in our numbers.
The comparison to Snowline isn’t apples to apples either. Snowline was able to create their MRE with a solid amount of indicated resources because they had done their ~30k metres of drilling with large tonnage in a small area. From what I can tell, they’re drilling for an underground mine and we’re obviously aiming for an open pit so naturally tonnage and drill metres will be different and mean different things. The only comparable area to this on the Ishkoday is what I mentioned in my previous post, the A-Zone, which has lower gold grades. I think the A-Zone would comprise most of the measured and indicated 2.5M GEOs if we did complete an official MRE today. This is actually a great thing for us because with more drilling, the Sturgeon River area could lead us to those 7.5M+ GEOs in measured and indicated resources. This would allow us to sell the gold closer to the $350-$400/oz range (Tier 1 project) instead of the largely inferred oz sell amounts, which I believe would be around $175/oz right now (Tier 2 project).
The only thing that gives me pause are rumours and the fact the AGM hasn’t been announced yet. My sources have shared potential buyout numbers with me similar to some of the more optimistic ones I’ve calculated in the past. They tell me there are ongoing discussions right now. Honestly, it’s hard to tell what’s true anymore, which is how I’ve gotten to my current attitude about the Ishkoday, trying to simply use the public information we’ve been given.
Look, it may not be a popular opinion because I know no one wants to wait for more drilling. Like I’ve mentioned, I’d love to be wrong. I know many complainers on this forum are angry they can’t get off the ride because they're in too deep. But the reality is that LME is an incredible property and from what I’ve seen, the Sturgeon River Mine area has incredible potential for a low-cost, high grade open pit mine. That makes LME a special opportunity. I believe it warrants additional drilling to get full shareholder value. Whether you are LME long or just kind of stuck at this point, I do think the payout will be well worth the wait.
Anyhow, this is all just my opinion and I’m not an expert, so others could very well be right about the buyout timeline. I just think there’s a different way we get to 12M+ GEOs and it will take some additional funds and time. But my fingers are still crossed the after party happens sooner rather than later. I certainly won’t be mad to be wrong on that one.
P.S. Total speculation, but if the SRM area continues to show high grades, it has an outside chance of being in the “bonanza” realm of gold grades. If we drill enough, maybe the area has 7.5M+ GEOs all on its own, mined from just one pit. That’s how we could get to Matlas share price numbers. Plus, if those mineral estimates are even just indicated instead of inferred, the price of LME would skyrocket. I believe we’re extremely undervalued, mostly due to the fact no one is confident enough in LME without more drilling. General investors wouldn’t know about the potential either without an actual MRE (most people don’t spend their time doing in depth stock research). But I don't think Cynthia really cares about pumping the stock price. Maybe because she does have a “fish on the line”. In any case, I think we’re lucky to still be able to buy in at this price.