Many of the reasons are obvious and already espoused.
More defintive reasons are obvious in the table below where I compare New Polaris PEA with Marathons's Valentine Lake FS.
Despite the much larger and higher 43-101 category resource levels for V Lake, its NPV5 is just 25 % greater than N Polaris PEA.
The obvious reason is due to the grade difference...N Polaris grade is over 6 times richer.
Its that simple.
Grade is king for gold mining as for all other mining deposits.
Now, as far as I can determine, New polaris will proceed to a Feasability study once the current drilling results are assayed and received.
Value of Polaris will increase for three reasons....
1....Infill drilling will elevate the gold resource into the higher 43-101 categories.....Indicated to Measured and Inferred to Indicated
2.....the resource size will increase due to extensional drillig success already evident in the assays todate....4 veins now versus 3 before drilling began should add between 300,000 to 400,000 ounces
3....As is the case for almost all gold deposits, gold grades increase with depth of the basement ( source ) lode. Two of my investments are already down to the 1400 m level and this is not unusual for gold deposits in the Canadian gold regions and elsewhere ( see chart in the Corporate Presentation ).
Drilling is now just above the 280 m level. Typically, these gold lodes can be as deep as 4000 m and vary between 7500 ounces per vertical m to 15,000 ounces per vertical metre of lode depth.
So, within this observation and noting that Polaris is already a very high grade gold deposit, its not inconceivable that once drill ing reaches 1000 m , the extra 700 m could add more than 5 million ounces of gold at grades above those at shallow depths ( over 10 gms per ton.
But, that is in the future.
Its my expectation that the updated 43-101 will be close to 1.5 m ounces.
The proposed feasability study will boost the current NPV5 of $469 m due to both higher valued 43-101 and due to more ounces to be recovered.
I would guess, combined, those two factors would boost the NPV5 to the $80 million level.
The aim here is to place the mine into production early in its delineation period.
That should give us at least a 10 bagger from here and much more as the full source lode is drilled below 280 m.
| | | | | |
| | | | | |
| | | Valentine Lake | | New Polaris |
| | Market Cap | $805 m | | $49 m |
| | | | | |
| | POG ( USD ) | $1500.00 | | $1500.00 |
| | LOM ( Yrs) | 13 | | 9 |
| | Grade | 1.68 | | 10.3 |
| | Capex ( M. C$) ) | $305 m | | $140 m |
| | recovery % | 80% | | 90% |
| | average Gold Production | 173,000 | | 80,000 |
| | AISC ( $C ounce ) | $833.00 | | $500.00 |
| | IRR | 31.5% | | 56% |
| | NPV5 | $600 m | | $469 m |
| | Recovered Ounces | 2,250,000 | | 696,000 |
| | Value per ounce | $267.00 | | $675.00 |