Veringianest777, I want you to know this is all because of you! :)
So now that the spinout is old news, times to dust this bad boy and do some brainstorming.
But could something that's right in front of us be much more than we could think of?
Seabridge. Hum.... .
So what's the objective? Takeover silly. But could Seabridge be a candidate to buy AMK?
Let's see.
Here's a few thoughts.
For starters would you say Seabridge knows about TC? Duh right? Being right next to them how could they not.
So first let's take a look at their 43-101 for KSM
First we know they need to drill a tunnel. This is my starting point. Why, lets see.
1.1 INTRODUCTION
Seabridge Gold Inc.’s (Seabridge) Kerr-Sulphurets-Mitchell (KSM) Project (the Project) involves the development of major gold-copper (Au-Cu) deposits located in northwest British Columbia (BC) off Highway 37, approximately 65 km by air north-northwest of the ice free Port of Stewart, BC. The Project is situated within the coastal mountains of BC, approximately 30 km topographically upgradient of the Alaska-BC border. The Project is one of the few undeveloped projects within the world that has received its environmental approvals, these having been granted by both the Government of Canada and the Government of BC. The Project includes four major mineralized zones, identified as the Mitchell, Kerr, Sulphurets, and Iron Cap deposits. The deposits contain significant gold, copper, silver (Ag), and molybdenum (Mo) mineralization. Figure 1.1 is a panoramic view looking east towards the aforementioned deposits
Sounds promising. Now here's their BIG problem.
***rights-of-way for the proposed Mitchell-Treaty Twinned Tunnel (MTT) alignment connecting Project facilities
Imagine sitting a ton of GOLD and you're at the mercy of your neighbor. Now that must seriously $uck and
1.2 Continues with
The 2016 PFS envisages a combined open pit/underground block caving mining operation that is scheduled to operate for 53 years. During the initial 33 years of mine life, the majority of ore would be derived from open pit mines, with the tail end of this period supplemented by the initial development of underground block cave mines. Ore delivery to the mill during Year 2 to Year 35 is designed to be maintained at an average of 130,000 t/d. After depletion of the open pits, the mill processing rate would be reduced to just over 95,000 t/d for 10 additional years before ramping down to just over 60,000 t/d for the remaining few years of stockpile reclaim at the end of the mine life. Over the entire 53-year mine life, ore would be fed to a flotation and gold extraction mill. The flotation plant would produce a gold/copper/silver concentrate for transport by truck to the nearby sea port for shipment to Pacific Rim smelters. Extensive metallurgical testing confirms that the Project can produce a clean concentrate with an average copper grade of 25% with a high gold and silver content, making it readily saleable. A separate molybdenum concentrate and gold-silver dor would also be produced at the KSM processing facility. The capital and operating costs for the 2016 PFS have been estimated to a +25%/-10% level of accuracy. All dollar figures presented in this report are stated in US dollars, unless otherwise specified. This 2016 PFS concludes:
Sounds Promising. Continues
the base case estimated total cost, at US$673/oz of gold produced, remains well below the industry average for operating mines
the base case after-tax payback period is approximately 6.8 years, which is a remarkably low 13% of the 53-year mine life and a key benefit to large producers. Overall, the 2016 PFS update confirms that KSM is an economic project with an unusually long life in a low-risk jurisdiction.
Now here's the HUGE problem, the project sounds promising but how much could this tunel cost them including startup costs?
lucky for us it can be found here
Table 1.1 Projected Economic Results
Table 1.1 Projected Economic Results Unit Base Case Recent Spot Case Alternate Case 2016 PEA* 2016 PFS 2016 PEA* 2016 PFS 2016 PEA* 2016 PFS Metal Prices Gold US$/oz 1,230 1,350 1,500 Copper US$/lb 2.75 2.20 3.00 Silver US$/oz 17.75 20.00 25.00 Exchange Rate US$/Cdn$ 0.80 0.77 0.80 Cost Summary Operating Costs (life-of-mine [LOM]) US$/oz Au -179 277 32 404 -319 183 Total Cost (Produced) US$/oz Au 358 673 553 787 218 580 Copper Credits (included in costs) US$/oz Au -1,328 -795 -1,104 -636 -1,449 -868 Silver Credits (included in costs) US$/oz Au -83 -71 -97 -80 -117 -100 Initial Capital (includes preproduction mining) US$ billion 5.5 5.0 5.3 4.8 5.5 5.0 Sustaining Capital US$ billion 10.0 5.5 9.7 5.3 10.0 5.5 Unit Operating Cost Onsite US$/t 11.61 12.36 11.17 12.09 11.61 12.36 Pre-tax Results Net Cash Flow US$ billion 26.3 15.9 24.1 16.1 38.7 26.3 Net Present Value (NPV) @ 5% Discount Rate US$ billion 6.1 3.3 5.7 3.5 10.2 6.5 Internal Rate of Return (IRR) % 12.7 10.4 12.9 11.1 16.9 14.6 Payback Period Years 5.6 6.0 5.3 5.6 3.9 4.1 Post-tax Results Net Cash Flow US$ billion 16.7 10.0 15.3 10.1 24.7 16.7 NPV @ 5% Discount Rate US$ billion 3.4 1.5 3.2 1.7 6.0 3.7 IRR % 10.0 8.0 10.1 8.5 13.4 11.4 Payback Period Years 6.4 6.8 6.1 6.4 4.7 4.9
GGRRR, terrible paste job but it mentions.
Picture in this PR
Initial Capital (includes preproduction mining)
5.5 Billion Base Case
5.3 Billion Spot case (2016)
5.5 Billion Alternate Case
Now that's a lot of Waffles!
So question, How much will that Tunel they need to build threw a mountain they don't own going to cost them?
and
Does this challenge help them unlock shareholder value or restrict shareholder value?
Start with Tunel cost.
I heard 1.5B, correct me if I'm wrong and even better post a link to accurate information if you know of it.
So the question is, if not for the tunel how much LESS would they have to spend? Hum right?
How much is AMK's MCAP? 121M? heck that tunnel cost could be 12.4 Times AMK's MCAP. I feel the wheels turning here.
Next let's tackle the Shareholder value question.
How many OZ do they have in Reserves?
Quick way to get some rough numbers.
MCAP 1.6B divided by 46Moz GOLD is $35 per OZ
And that doesn't include Copper (which gets talked about alot) plus would need to see how Silver plays into here but this is a start.
So how's this for an idea.
Seabridge knows about TC
They have to deal with the tunel situation
Do they even have to build a tunnel?
What if they take a swing at AMK?
They just did with Pretivm land....
What would this change for them?
First, might give them wiggle room regarding the tunnel
A seat with the BIG boys? Don't they want to sell?
If they were to buy AMK could this open up a potential deal that is even larger than we could ever imagine?
Would this solve a problem and create shareholder value?
How much per OZ are they trading for? $35.....
What if we get cash and shares?
Am I crazy here?