Post by
Marcsr on Dec 19, 2020 10:06pm
3-7 yrs before they own the production rights and land
They have 120K+ total shares right now with 30M in cash,
they have to spend 23M + 20M option for production over the next 3-7 years.
Looks like the shares will be diluted at least 100% until production starts....
outrageous grades, but will have to wait on the reserve estimates.
share price seems well ahead of reserve estimates, long time to wait for production too.
Marc
Comment by
cressco on Dec 20, 2020 9:59am
The structure of options to acquire 100% interest on both is very favorable to VZLA, especially the renegotiated Panuco one in May of this year. By far most exciting point in this MD&A is 8 rigs by mid 2021. #BeastMode.
Comment by
cressco on Dec 20, 2020 11:06am
Your concerns are valid imo, but in a stagnant mkt. If these bonanza grades keep coming as ag moves above 30$, plenty of money on the sidelines will be waiting to pour into this play. Next dilution happens in a >5$ share range. Hence the aggressive approach to drilling. Time will tell, however my perspective comes from an extremely bullish outlook on the PMs mkt.
Comment by
cressco on Dec 20, 2020 11:10am
I forgot to re-emphasize as well that the mill option value far exceeds the obligatory acquisition payments. S.
Comment by
Marcsr on Dec 20, 2020 12:44pm
Cessco, Based on a grade rate of 500g/ton, 16 oz/ton: That means if mgmt estimates 12M ounces/yr div 16oz/ton results in 750,000 tons/yr the mill is only rated at 500 tons/day or about 150,000/yr mill is not adequate for the proposed plan. Marc
Comment by
cressco on Dec 20, 2020 8:22pm
I dont think Mike based his 12 mil oz ageq yearly production on a 500tpd mill capacity. Mill expansion most def in play. I also think we get a slightly better grade of ore than 500g ageq per tonne.
Comment by
Marcsr on Dec 21, 2020 9:48pm
Cressco, You are correct, if the share price goes up substantially, that would potentially moderate the number of shares issued for the additional financing. In that instance, my estimate of massive dillution may well not occur. Thanks for your comments, Marc