2018 drilling program and the grades received indicate the significant underground potential for NOA 7/8 of NOA 7/8 at Burnakura .
A follow up program can easily be designed to both extend and define the mineralization at depth.
While a suitably powerful RC rig can perform follow up infill, a DD rig would be needed to discover further extensions at depth.
The deposit is still clearly open at depth, with the potential to extend the resource further with deeper drilling.
Also, NOA has 114,000 ounces of oxides at 4.46 gms per ton which are open pitable.
Typical open pit grades are less than 1.5 gms per ton, so these ounces at 4.46 gms are going to have a very low cash costs.
Step 1...use the $4 m in cash from the Tuckie deal to initiate a substantial underground drilling program at NOA 8.
Step 2....Refurbish the existing 260,000 ton per year million at Burnie....if not already refurbished ( it was supposed to but I will confirm )
3....Reopen the mining camp and hire a mining contractor to resume production ( WGX provides such services)
4...use the cash flow to fully explore and develop all of Burnie.
At 4.46 gms per ton, gold recovery will be above 90%.
I will use 90%.
So, we have 4.46 gms /ton times 0.90 % times 260,000 tons per year
= 1,040,000 gms per year divided by 31 gms per ounce = about 30.000 ounces per year and a mine life of just over 3 years.
Lets assume $1800 POG and a AISC of $ 900 per ounce.
Annual revenues are $54 million US per year and free cash flows of $ 27 million US per year for 3 years.
By then, underground and extensional drilling will have discovered significantly more ounces at least below the pits in addition to the other 400,000 + ounces at Burnie and Gabby.
Use free cash flows to xpand the current mill to 1 million tons per year.
After 3 three, production can then be ramped up to 75,000 ounces a year.
If that mill is already refurbished, mining resumption should not take too long as the mining camp is already in place.
If Mengapher is sold we can buy the needed mining equipment and form our own mining team.
Remember, $1800 POG opens up lots of realistic possibilities than $1250 POG.
And we still are producing gold at Selinsing with strong working capital ( $30 m cad ) and no net debt..
So why would anyone sell ...