Maritime Resources Corp V.MAE

The Real AISC is at Breakeven Price

[nozzpack]

While AISC is stated as all in costs per ounce produced including taxes , the real all in cost is the breakeven price per ounce .

Breakeven includes all costs such as sustaining capital , and is after taxes .

The breakeven Price in the 2022 FS study was $1115 US per ounce .

This is the actual value which should be used and was used to estimate Free Cash FLOW ( FCF ) in the 2022 FS .

That FCF was estimated to be $41.4 million cad per year at the reference gold price of $1750 US per ounce and 50,000 ounces annual production.
( $1750 less $1115 US X 1.32  times 50,000 = $41.8 m cad )

The AISC was $917 US per ounce and the Cash cost was $847 US per ounce .

We  know from reliable calculations carried out on this Board that over $90 million CAD will be saved in operating costs and capex by using the Pine Cove mill.

And another 21,000 ounces will be recovered due to the greater capacity and higher recovery rates of the Pine Cove mill.

So, with strong conviction, the current breakeven price per ounce produced 
will be significantly lower than $1115 US per ounce.

But, to be conservative , I will assume $1115 US as breakeven.

For simplicity in computation, I will assume  a reference  POG of $2515 US which results in a FCF margin of $1400 US per ounce times current  1.39  which is $1950 CAD in FCF per ounce produced .

At 2022 reference 50,000 ounces per year, the FCF per year would be $97 million CAD per year or more than twice the $41.4 million cad  .

But, thats not all.
We gain 21,000 ounces of additional production due to higher gold recoveres ...in a recent post of mine .

That adds another $8 million CAD of FCF pder year to bring total FCF of $105 million CAD per share for 5 years at 2022 refrence  50,000 ounces per year.

Basically $500 million in free unencumbered cash which we can do with as we like ...drill more, acquire , pay dividend , expand mill , monetize Deer Cove Talc  ,build up cash etc.

And , this is conservative, as there is no adjustment for the over $90 million
in operating savings by switching to the Pine cove Mill.

Almost  certainly, the mine life will be much longer than 5 years in the updated FS and average production can be sustained at 60,000 ounces or more .

All of this points towards  a valuation derivative of the updated FS being equal to or above that of Firefly ( $650 million ) at its current milling capacity ( 500,000 tons per year at 2 % copper = 10,000 tons of concentrate per year @ $12500  CAD per ton =  $125 million cad in annual Revenues  versus 60,000 ounces at $3500 CAD per ounce = $210 million per year.

These are documented statistics as they now are quoted.

Its why Firefly or its sugar daddy Bellevue Gold will have to seek a merger with Maritime , if Firefly is to meet its stated goals of becoming  a mid tier mining company focussed on copper but derisked by gold 

[NineLives]

Strong numbers Nozzpack, also interesting that just the annual free cash flow on those calculations is almost equal to MAE's market capitalization. Another way of looking at it is the market capitalization is only pricing in the Pine Cove Mill infrastructure and totally ignoring the gold at Green Bay (Hammerdown, Orion, Muddy Shag, RumBullion) and Stog'er tight and all other

[nozzpack]

It won't take much in the form of a material development NR to move us to that Spot ligh. Over 60% is held by Corporate/ Insiders and they ain't selling. In fact, no one is selling as our daily volumes rarely exceed $30,000 ..